As I See It: I own 10 restaurants; temporary fixes won’t do
Mezcal Tequila Cantina – Worcester, MA
By Mike Covino – Originally published June 16th, 2020 in the Telegram & Gazette
Everyone who has worked in a restaurant knows the rush of tickets printing furiously during the dinner rush and the anxiety of running behind on orders, or what we call being in the weeds. Now everyone in the industry is familiar with a far scarier challenge – silence.
When the state began imposing restaurant restrictions a few months ago, my vendors were very understanding. “We are on your side,” they told me. “We don’t expect you to pay in full.” They meant what they said. But there is no way of knowing how long they can wait. Their compassion can’t last forever.
The Restaurant Relief Act will almost certainly move forward on Beacon Hill later this month. Once passed, the bill will expedite licensing for extended and alternative outdoor patios, cap fees for third party delivery apps and allow for cocktails to go. As the owner of 10 restaurants in the state, you would think I find this progress encouraging — and I do. But I also know better than to trust a temporary fix.
I need to buy serrano ham. I need to prep octopus. I need to pay an outstanding invoice for the slow-roasted rabbit that went to waste back in March. My costs are astronomical. My revenues are nil. Re-opening all 10 restaurants would be impossible right now.
The Restaurant Relief Act will help, but it’s no silver bullet. I’ve done the math. I understand what the law will mean for the future of my business.
I could possibly spend more than $20,000 on tent structures, additional tables and chairs, umbrellas, wraparound flower boxes and jersey barriers in the parking area to maintain my customer base through outdoor dining. But will I see a return on investment? Not likely unless the provisions of the act become permanent.
As it stands, the current bill (H4774) will apply through the end of the state of emergency or until Feb. 28, 2021, whichever is later.
That timeline doesn’t work. If I offer outdoor seating, I need tents, for example. An employee recently asked me how I planned to handle outdoor dining when it rains without cover. “Apologize,” I told him. But we’ll likely have to set up and breakdown these areas every day, a task that requires additional staff.
Wellesley, Worcester and Leominster won’t become Las Vegas or New Orleans if I spend $100,000 on outside seating at a few restaurants. I’ll only manage to seat a small portion of the guests – maybe 30 percent – I am able to serve inside. Since restaurant margins are tough, by my calculation I will have to do $500,000 or more in sales from that outdoor dining to break even.
I can spend a fortune in the summer of 2020 buying tents, but I’ll never see that money again if the rules change back to business as usual in less than a year. If I never get an opportunity to open that outdoor space again, then the expense is not worthwhile. With a 70% shrinkage in sales, I can’t survive in the new normal.
Finances aside, my customers fortunately are more than willing to eat outdoors. I know their opinions because we recently sent a questionnaire out to our mailing list. Of the 631 respondents, 67% said they planned on dining out by the end of July. They are searching for a sense of normalcy. More than 70% are actually opposed to disposable cups and cutlery. They want to feel like they are at a restaurant.
Less than 10 percent of our surveyed guests are still waiting for a vaccine before they engage in any semblance of dining out. I understand their fears. But I think government regulations are undermining consumer confidence. They’re asking, “What is it about the hospitality industry that makes it a special case? Why can other customer-facing businesses open but not restaurants?” It makes people nervous.
In the restaurant industry, our guests are the judge, jury and executioner. We want them to feel safe and we don’t need government regulations weakening customer confidence in our ability to provide a safe environment.
Unfortunately, the closing of many restaurants is inevitable. Some owners would say, “Good. There’ll be less competition.” I disagree. I want to be in communities where more restaurants are opening because more people are coming to dine. Closings do not equal more traffic to a destination. No Broadway theater owner wants the other theaters to close on Broadway.
No matter what happens, those of us who make it though in the coming months will be forced to charge more to account for the steep drop-off in revenue during the pandemic. Is that possible? You might be willing to pay $15 for a burger now, but will you pay $20 to account for additional staffing and outdoor landscaping? I don’t think so. I’ve done a lot to cultivate an ambience — a perception of value, in my restaurants. At those rates, value perception goes away.
I get it. Parking lots are the dining rooms of tomorrow. But if the Restaurant Relief Act is going to make any sort of lasting impression in Massachusetts, the governor and legislators need to remove the sunset clause and make the changes permanent.
Mike Covino is president of Niche Hospitality Group, which includes Bocado, Mezcal, The Fix, and other restaurants in Wellesley and Worcester County.