Diners have resumed dining at the restaurant at pre-pandemic levels. But many restaurant owners themselves — still feeling the lingering effects of the pandemic and government-ordered closures — are demanding a new round of federal support for their industry.
Last week, the Democratic-controlled House passed the Restaurant Revitalization Fund Replenishment Act on a majority partisan vote 223-203. The bill would spend an additional $42 billion in subsidies to cover losses to restaurants, bars and other hospitality businesses in the pandemic era.
The restaurant industry
The federal government's Restaurant Revitalization Fund was created by US bailout legislation passed in March 2021. Three months later, it had already spent $28 billion in subsidies for restaurants and bars to offset the loss of income during the pandemic. As of June 2021, some 100,000 applicants had been approved for grants averaging $283,000, according to data from the Small Business Administration (SBA), which administers the program.
The SBA had received a total of 278,304 grant applications from restaurants and bars requesting a total of $72 billion in COVID relief grants. Members of the
restaurant industry argue that another round of funding is needed to get money for those who missed the first installment.
Reviews: - original sites for browse restaurant industry need another bailout around this website.
A survey by the Independent Restaurant Coalition (IRC) found that half of restaurants that had not received SBA subsidies predicted they would close within the next six months. About 20% of restaurateurs who received an SBA relief grant said they would close in six months.
“After two years of missed rents, vendors and utility payments, navigating astronomical food costs and multiple COVID-19 surges that have brought businesses to a standstill, independent restaurants and bars are running out of time, options and money," said Erika Polmar, Executive Director of the Independent Restaurant Coalition (IRC). “There is only one solution to this crisis: to provide these companies with the financial support they need before it is too late.”
The apocalyptic tone contrasts with other data points showing a restaurant industry that has been steadily bouncing back from the dark days of COVID-19.
The latest figures from the state-of-the-industry reservation app Openable show that nearly 95% of restaurants that opened in 2019 are accepting reservations again. The number of people making reservations has also returned to 2019 levels.
Employment in the restaurant industry has been slower to rebound, but the trend is still up.
Preliminary data from the Bureau of Labor Statistics (BLS) shows that about 11 million people worked in bars and restaurants nationwide in March 2022, about 5% less than the number of people working in the industry in March 2019. BLS data also shows that as of the third quarter of 2021, the total number of restaurants had exceeded pre-pandemic levels.
This follows the surprise finding that in general there are more small businesses open today than there were before the pandemic.
Restaurants, bars and other entertainment and hospitality businesses have felt the brunt of government mandates and restrictions throughout the pandemic. In many states, they have been ordered to close their dining halls for months at a time.
Federal Court rules against CDC transport mask warrant
When they were allowed to reopen it was often at significantly reduced capacity – a real imposition for a business with tight margins. Mandates for vaccines and masks have kept some customers away long after the last vestiges of lockdown have disappeared.
It could be argued that these government charges entitle the affected companies to compensation.
“If the government only closes certain businesses on the grounds that they are areas where the pandemic can spread more quickly, that is action the bar owner is then taking on behalf of the public,” said Oliver Dunford , an attorney for the Pacific Legal Foundation to Reason in July 2020. "You could argue that the public should have to pay for this."
The problem with the restaurant relief bill passing through Congress is that it would compensate businesses for lost revenue, whether that loss is the result of government mandates or willful unwillingness by customers.