How Coronavirus Is Affecting the Hospitality Industry in America

The COVID-19 coronavirus is a legitimate health concern for every American right now. But for those working in the hospitality industry, the unfolding pandemic not only threatens their physical well-being; their livelihoods are also at risk.

Restaurants and bars, in particular, are suffering. Even in good times, the margins for operating these businesses are razor-thin, and many employed in the industry do not enjoy the safety net of sick pay and health insurance. Many restaurant and bar workers also are not able to work from home to “socially distance” or self-quarantine.

As the situation unfolds, VinePair will be sharing the latest news and updates on a continually updated live blog. But to paint a more detailed picture of how this pandemic is impacting our colleagues in the industry, we reached out to hospitality professionals around the country.

No region in America has yet felt the impact of the coronavirus as significantly as Washington State. At the time of publishing, three-quarters of the reported U.S. deaths attributed to the illness (31) have occurred within the state. Bars and restaurants in its most populous city, Seattle, are scrambling to react to the unfolding crisis.

On Wednesday evening, the Tom Douglas Company, which runs 13 restaurants across the city, announced it was shutting all but one of its locations for eight weeks, following a 90 percent drop in business since the start of the outbreak.

Zach Geballe, the group’s wine educator (and VinePair podcast co-host), was among the staff members who will soon find themselves in temporary unemployment. (The two-month closure will officially start following dinner service on Sunday, March 15.)

“Everyone is just waiting to see what happens,” Geballe says. “It’s impossible to know when, if at all, things will return to normal.”

Though the official word is that the Tom Douglas restaurant group will begin reopening locations in two months’ time, there’s a lot of uncertainty surrounding the situation. Geballe, and many of his colleagues, are left considering the very real possibility that they may be forced to change industries.

“The restaurant industry is inherently an unstable place. Prior to now, that instability has not been too big of an impediment to me building a life,” Geballe says. “While [coronavirus] is admittedly unprecedented, these kind of instances do make you question whether it’s time to find something less fragile.”

The reverberations of any large-scale labor shift would surely impact Seattle’s hospitality sector for months, if not years, to come.

Speak to anyone who manages a bar or restaurant and they’ll confirm just how hard it is to find reliable, skilled workers — even at the best of times. If many within that industry now seek other, more stable employment because of the impact of this pandemic, there may not be enough labor to operate those bars and restaurants when the crisis eventually passes.

Meanwhile, other Seattle restaurants have pivoted their concepts in an effort to keep their workers employed, and to recognize some income.

On Monday, fine-dining institution Canlis announced it would temporarily alter its normal operations, and instead offer Seattle diners three options: a takeout breakfast spot called “The Bagel Shed,” a pickup option serving burgers called “Drive On Thru,” and a delivery service called “Family Meal.”

This option, of course, may not be a reality for all restaurants. And it remains to be seen just how much demand there will be for such an offering on a medium- to long-term time frame. Additionally, this type of solution at other restaurants may only cover the kitchen staff, not the majority of those who work in customer-facing roles, relying on tip-based income.

As someone based in the epicenter of the crisis in the Pacific Northwest, Geballe says he feels a sense of foreboding that slowdowns and closures on the scale of Seattle may soon happen in other cities, such as New York and Chicago.

According to data shared with VinePair from restaurant reservation platform OpenTable, while reservations stayed stable in February and even experienced a big increase on Valentine’s Day, there have been sharp declines in online reservations, phone reservations, and walk-ins at restaurants across the country over the last week.

On Thursday, New York Governor Andrew Cuomo issued a mandate obliging all venues in the state with a capacity of 500 or less (including bars and restaurants) to reduce their capacity by 50 percent. Events and spaces with capacities of over 500 people have been canceled or shuttered.

On Thursday night in Jersey City, just across the Hudson River from Manhattan, bars, restaurants, and other venues were taking attendance at the door, in case of the future need to track exposure.

“At a bar in Jersey City last night, I was required to give my full name, and other places were additionally collecting phone numbers and emails,” says Erica Duecy, VinePair’s editor in chief and chief content officer. “Right now the effort is voluntary. What’s not voluntary is the 10 p.m. curfew on liquor licenses, which adds further hardship on an already struggling industry.”

With margins in hospitality already incredibly fine, operating at 50 percent capacity or working within curfews is not likely to be a tenable solution.

By early Friday afternoon, Manhattan restaurateur Danny Meyer’s Union Square Hospitality Group (USHG) announced all of its 19 restaurants would shut until further notice.

“With all that we now know about federal, state and citywide mandates, as well as the science that has provided evidence urging everyone to reduce nonessential social contact, we have made the difficult, but for us, obvious decision to temporarily close our restaurants in New York City,” Meyer said in a statement.

“Every day is a loss of income and this weekend will be a very strong telling point,” Steven Hall, the owner of a New York-based restaurant PR firm, tells VinePair. While Mondays and Tuesdays are typically slow days for most restaurants — even in New York — strong weekends are crucial for survival, he says.

If that doesn’t turn out to be the case over the next few days, many restaurants will be forced to consider closing throughout the week, to consolidate payroll, or even to follow USHG’s lead in shutting their doors completely until the pandemic subsides.

Not all parts of the hospitality industry have yet reported feeling the implications of the unfolding crisis, however. In California wine country, where many wineries offer hospitality and tasting experiences, some wineries are reporting business as usual.

“Winter tends to be the slowest time of year in general,” Matthew Crafton, winemaker at Napa Valley’s Chateau Montelena, tells VinePair. “Because of that, if there was any drop in visitors, it’s hard to know whether it is due to this.”

A 10 to 15 percent fall in visitors in August, on the other hand, would be “significant,” Crafton says. But with international travel fears, there’s also the possibility that this summer could see a spike in domestic tourism. “We certainly saw that during the recession,” he says.

One thing that unites everyone in the industry right now is uncertainty. And yet, in these uncertain times, some professionals are still managing to offer the trademark hospitality that defines their industry — albeit in novel ways.

On Thursday evening, Washington D.C., bar veteran Derek Brown tweeted: “If anyone is stuck at home tonight and needs a cocktail recipe, tweet me your ingredients. I’ll tell you what to make.”

If anyone is stuck at home tonight and needs a cocktail recipe, tweet me your ingredients. I’ll tell you what to make.

— Derek Brown (@ideasimprove) March 12, 2020

At the time of publishing, more than 1,000 Twitter users have responded to Brown’s offer for help. His suggestions have ranged from classic cocktails, such as the Old Fashioned and Gin Fizz, to innovative uses for hard seltzers.

The risks and realities of a global pandemic are no doubt serious. But a momentary pause for a stiff drink might not be such a bad idea right now.

This story is a part of VP Pro, our free content platform and newsletter for the drinks industry, covering wine, beer, and liquor — and beyond. Sign up for VP Pro now!