OpenTable CEO says 25% of America's restaurants will close for good due to coronavirus

[Yo_Mama_Been_Loggin]

As the world’s largest restaurant reservations platform, OpenTable has unique insight into the recovery restaurants are making as economies start to open back up from coronavirus lockdowns.

Unfortunately, OpenTable data shows the tough road ahead is pointing to the grim reality that up to 25% of restaurants in the U.S. might permanently close due to the pandemic, according to OpenTable and Kayak CEO Steve Hafner.

“Twenty-five percent [of restaurants closing] is still what we’re projecting,” he told Yahoo Finance’s YFi PM, reaffirming his company’s dire projection from back in May despite a recent uptick in restaurant reservations. “Even in the best of times, restaurants operate on really thin margins. So if you add on capacity restrictions, new safety and service protocols, it's really tough for a restaurant to make it.”

OpenTable data, which comes from a fraction of the nearly 60,000 restaurants around the globe, shows a modest recovery for establishments in some U.S. cities as states have allowed restaurants to open dining options. Unsurprisingly, when most of the country initiated lockdowns back in March and April diners plummeted 100% year-over-year, but have since nationally recovered to about only a 65% drop relative to last year.

https://finance.yahoo.com/news/open-table-ceo-says-25-of-americas-restaurants-will-close-for-good-due-to-coronavirus-102751653.html

[sir pball]

1. IMO that's optimistic

Here in NYC my personal bet is somewhere between 1/3 and 50% - I personally know a couple of places that are staying open to burn off their PPP loans, but beyond that it's simply not sustainable unless and until 100% capacity indoor dining returns, and the crowds are there to fill that capacity. By November I expect it's going to be a bloodbath.

[Sherman A1]

2. +1

This is what I believe as well.

[Johnny2X2X]

3. Agree

Restaurants rely on those packed houses on Friday and Saturday nights to keep the lights on. They're really just barely breaking even other than those few big nights.

[sir pball]

4. Been in the business 25 years

If you can't cram them in on the weekends, you aren't going to make it, especially in NYC what with the insane rent and facilities costs. My biggest concern is a second lockdown, which I kind of feel is inevitable - any restaurant that's still operating is saddled with debt that could easily be into the 6 figures; if we all get shut down for a second round, that's an absolutely catastrophic burden. Several notable places have already shuttered for that exact reason; they'll start fresh, with no debt, when it's finally over.

[Wellstone ruled]

8. You are right on.

Do believe this Pandemic will cause about half to never make it. This Virus is just now being recognized for its real effects in the Nations largest States. Once the Rental and Mortgage Moratoriums lapse,it is going to get very ugly fast.

At this point,it will be hard for Restaurant Suppliers to extent Credit for B and C rated Accounts. And the Nationals will see their Accounts payable dates shrunk to 30 days max.

[customerserviceguy]

9. Agreed

Even in good times, it's tough to make it in the restaurant business. The pandemic has been like a nuclear event for the whole hospitality industry, and I don't see people being all that terribly eager to go back to dining out or travelling, even after there is a vaccine. Many households simply will not have the money to re-engage in those pursuits, they'll be too busy trying to pay back bills, etc.

[Initech]

5. This fucking virus took a dump on our whole society.

It needs to go.

[bdamomma]

6. this regime

has to go.

[Initech]

7. Yes, that too!

[ProfessorGAC]

10. Been Hearing 20-50% For A While

So, as someone above said, 25% is fairly optimistic.
The first person I heard say it was the president of the National Restaurant Association. (Yep, NRA! Go figure)
He said back in early April from 1 in 6 at least, across the board. And, as high as 50% for independent restaurants.
It's in the same range as this estimate.

[Jirel]

11. Frankly, it was inevitable.

Many of those restaurants were incorporated, so bankruptcy wipes out the business but not the owners. The owners will certainly take a hit, but have insulation from the worst of it.

Weeks of being closed, then only open for takeout or 25-50% capacity, depending where they are, is not enough. Most restaurants need big weekend crowds to prosper, even survive.

While mainly workers will be hurt by this in the short term, tre industry and restaurant jobs will rebound n the longer term.

You can’t try to have business or an economy as normal during a pandemic.The best bet is to take a lesson about what breaks, how, and who needs help, and make radical economic and educational changes based on that. Many of us have long said that you can’t have a strong economy or economic justice in a system where a ridiculous number of fast food workers are selling each other burgers and not making it paycheck to paycheck as they balance multiple jobs and gigs. Bar and sit-down restaurant workers have a step up, but not by much.

Unless everyone completely misses the opportunity, we are going to see wages for essential workers rise, and education refocus on at least getting students into those kinds of jobs, and preferably for better paying vocations. We saw what jobs go away en masse in an emergency. We need to take hard lessons from that.