Struggling hospitality industry faces new challenge as winter looms

 The state’s hospitality industry adjusted to COVID-19 with mixed results but now there’s a new challenge: winter.

Patio season is coming to a close and restaurants are only half full, as a result of a recent Michigan Department of Health and Human Services order calling for restaurant capacity to remain at 50%. 

“If people can’t be outdoors, we think we’ll lose 5,000 restaurants, which is roughly a third of the restaurants in the state,” said John McNamara, the vice president of government affairs for the Michigan Restaurant and Lodging Association.

The association is working with the Legislature and the governor’s office to allowrestaurants to enclose and heat their patios for the winter. It’s also hoping that banquet centers will be treated like restaurants to allow more servers than allowed under coronavirus restrictions.

“There’s lots of work to be done,” McNamara said. “Restaurants were a vanguard of public safety before this. A lot of people have changed their business models overnight in order to allow guests to still come in and enjoy a meal safely.”

Still, he said, more than a thousand restaurants “have closed their doors for good.”

“My focus the past six months has really been on giving our members tools to survive and thrive during this pandemic,” he said. 

Gov. Gretchen Whitmer established executive orders to protect residents and slow the spread, but those orders have since been rescinded under a court order. The Department of Health and Human Services order continued her restrictions on restaurant capacity.

The pandemic hit the hospitality industry hard. In July 2019, Michigan had nearly 435,000 hospitality workers. Last July, that number hardly passed 270,000, according to the U.S. Census Bureau.

It was even worse in April when it reported only 179,700 workers– the lowest monthly number in 10 years.

Typically, the monthly number of Michigan employees in the sector that provides food, beverage, travel and tourism hovers around 400,000, according to the U.S. Bureau of Labor Statistics. 

The highest within the past 10 years was 436,700 in March of 2019, less than a year before the virus struck.

“We called it our carryout season,” said Marty Hutnick, the owner of the Four Corners Diner in the small southeast Michigan village of Romeo. “There were only three to four of us working, so it was hard. But that’s what helped keep our doors open.”

Hutnick credits the “phenomenal community” for helping keep the establishment afloat. When they weren’t buying carryout, many customers purchased gift certificates. A few customers even went as far as helping the restaurant pay the bills for rent and electricity. 

“The stress that it caused on me personally was very hard,” Hutnick said. “I don’t think people realize what goes on behind the scenes. I wanted to give up and turn the lock.” Compared to other business owners, Hutnick considers herself lucky to have survived carryout season.

“Some industries have not been hit as hard as others,” said Otie McKinley, the media and communications manager of the Michigan Economic Development Corp. and Pure Michigan. “When you look at the tourism industry and small businesses, they have been catastrophically impacted.”

The agency launched 19 coronavirus response programs to assist businesses during the pandemic. Working closely with local partners and agencies, the corporation used funding provided by the federal Coronavirus Aid, Relief and Economic Security Act that was implemented at the end of March. About $100 million went toward supporting communities across the state through the Michigan Small Business Restart Grant program, McKinley said.

“As we work to rebuild our economy, we want to do so in a way that creates a more equitable and resilient economy than what we had going into COVID-19,” he said. 

The Michigan Restaurant and Lodging Association worked with lawmakers to ease the virus’ impact on the hospitality industry. It supported a bill passed in July that let restaurants sell liquor to-go with limited customer contact.

The legislation also permits cities to establish social districts for people to dine and drink from open containers outside. East Lansing blocked off a portion of Albert Street, home to many restaurants, and set up picnic tables for sitting and dining or drinking.

“Closing Albert and having the social zone so close to us was an additional revenue stream that we’ve never had before,” said Bryan Ponke, the general manager at HopCat’s East Lansing location. “Even though our restaurant occupancy was limited and our sales were negatively impacted by COVID-19, we saw an outstanding spike in takeout sales.” 

HopCat used the garage doors on the side of its building as its takeout window. Guests could order and pick up their drinks and food from the safety of the sidewalk. According to Ponke, the social district definitely helped business.