Long recovery predicted for Houston restaurants
This weekend saw restaurants take another step toward restoring business: Gov. Greg Abbott’s Phase 3 reopening of the Texas economy allowed restaurants to expand to 75 percent occupancy on June 12.
Though the Texas restaurant industry inches toward full operations, the beating it has taken since the beginning of the coronavirus pandemic has been nothing short of brutal. The Texas Restaurant Association estimates that 700,000 jobs and $4.2 billion in revenue have been lost so far. It’s a dire situation that continues to haunt one of the state’s largest industries that before the pandemic accounted for 1.3 million jobs and $70 billion in annual sales.
In Houston, there was optimism when Abbott allowed restaurants to resume dine-in operations at 25 percent of capacity on May 1. A giddy restaurant-going public, homebound since Abbott ordered an end to non-essential business statewide in March, eagerly returned to favorite steakhouses, barbecue and burger joints, crawfish and po’boy shops and Tex-Mex restaurants.
Diners have encountered a very different experience: servers in masks and gloves, tables spaced out at mandated distances, hand-sanitizing stations, disposable menus and serviceware and, in some cases, plastic dividers. Even as the occupancy limitations were eased, the dining experience has been colored by procedures that have changed the tenor of eating out.
For many restaurant owners, the marginal increase in business was not enough or came too late. Even as restaurants bumped up to 50 percent occupancy on May 22, the casualties were mounting.
Houston restaurants including Ragin’ Cajun in Westchase, Dak & Bop in the Museum District, The
Tasting Room in Uptown Park, Barry’s Pizza on Richmond, Treebeards’ original location on Market Square, Americas in River Oaks and all four Bernie’s Burger Bus locations announced closings as the pandemic wreaked havoc on traditional business models. Even the venerable Luby’s cafeteria chain announced earlier this month it was putting its restaurant business and assets up for sale, another victim of slow business and changing dining habits brought on by the pandemic.
The Texas Restaurant Association doesn’t have hard data on the number of restaurants closed in Greater Houston. But the forecast is bleak — a long recovery that could take a year or longer and will undoubtedly claim more establishments.
“I’m predicting that things won’t get back to 90 percent of normal until the end of 2021,” said Tracy Vaught of H-Town Restaurant Group, which includes Hugo’s, Backstreet Café, Caracol and Xochi.
Like other major business sector players, the restaurant industry is adjusting to the “new normal” with operations that bear no resemblance to the pre COVID-19 landscape.
During the restaurant shutdown, operators were forced to get creative to stay in business by switching to curbside pickup and meal delivery; developing family meal and cocktail kits; creating pop-ups and marketplace stores; and adopting new strategies such as partnering with local supermarkets for to-go meal sales. These directives took place while restaurants were struggling with furloughing employees, dealing with rent issues and navigating the labyrinthine processes for securing funds from the Paycheck Protection Program established by the CARES Act.
“All of a sudden you had to be an expert in reading legislation — sitting down and trying to interpret legislation on a federal level,” said Melissa Stewart, executive director of the Greater Houston Restaurant Association. “They were written with good intention but written quickly. Meanwhile, you have folks who minute to minute were wondering how to survive.”
Stewart predicts it could be more than a year before business returns to pre-pandemic levels. “A year is optimistic,” she said, noting that there were Houston restaurants that took 12 to 18 months to get back on their feet after Hurricane Harvey.
“At this moment, it’s still very much touch-and-go for a lot of places,” said Jonathan Horowitz, founder of Convive Hospitality Consulting, a Houston restaurant-consulting company. “Overall,
we’ll continue to see closures because of the challenges they continue to face.”
Expecting Houston restaurants to return to life before the pandemic is not an option, said Horowitz, the former president of the Greater Houston Restaurant Association. Too much has changed, and many of those changes — in the way restaurants feel, look and do business — will remain part of permanent practice, he added.
“To me, this is more of a lifestyle change. This is a societal change that nobody predicted and very few people could plan for,” he said. “It’s a disaster but not a disaster in the traditional sense. There’s too much uncertainty and no end in sight. That’s very different from what we consider a typical disaster.”
Many of the changes the restaurant industry has adapted to will be permanent, he said.
That goes for the dining public, too. Contactless curbside, takeout and delivery, ordering online, paperless menus and alcohol to-go are now so routine they may continue to be part of restaurant practices for a long time to come.
So, too, will the need for additional federal help to get restaurants back on their feet, Stewart said. The Texas Restaurant Association continues to press for state and federal measures, including additional funding. As many as 10 percent of Texas restaurants have closed permanently, and that will grow to more than 30 percent if Texas does not implement a comprehensive restaurant-survival plan, the TRA stated.
“All those margarita kits and GoFundMe projects, I’m proud of them. But that’s not going to get us out of a crisis,” Stewart said. “While we have been resilient and have done great things, we’re not going to make it without some big help.”