If we want to save our restaurants, Virginia must put long-term relief on the menu

January 12, 2021 12:10 am

A food delivery worker picks up an order from Galaxy Diner in Richmond, Va., May 16, 2020. (Parker Michels-Boyce/ For the Virginia Mercury)

By Eric Terry

Last year at this time, bars and restaurants across Virginia were celebrating their bottom lines after the bustling and lucrative holiday season.

Many of those places, once bright with lights, music and lively conversation, are now dark. They struggle to hang on, or in too many cases, have closed for good. The National Restaurant Association estimates 100,000 restaurants closed either temporarily or permanently in 2020. More than 8 million restaurant employees were laid off or furloughed at some point because of the pandemic.

Here in Virginia, we had a workforce of 378,600 restaurant and foodservice employees before the pandemic. In 2019 it equaled 9 percent of employment in the state. That has dwindled considerably. Around Richmond alone, where I work, nearly 100 restaurants have closed. 

If we want to see these places survive, state officials must step in and create long-term relief specifically for small businesses, which includes neighborhood diners, city cafés and local pizza shops. They can do this by extending the state’s COVID-19 Relief Fund.

Many businesses are hurting right now, but more than any other industry, restaurants are staggering through this pandemic. 

Gov. Ralph Northam and lawmakers started down the right path. Last April they created the COVID-19 Relief Fund. The goal is to help the commonwealth push through its revenue losses without drastically cutting programs or increasing taxes. The fund also sends 12 percent of its revenue straight to localities. 

In December the governor shifted the focus of the relief money, saying it will target struggling small businesses. Virginia is estimated to reap $140 million from the fund this fiscal year through a $1,200-a-month tax on skill game machines, the type found in bars, gas stations, convenience stores and restaurants. 

Yet for all of their good foresight, state officials are set to make a costly mistake. The fund is set to expire on June 30 unless lawmakers extend it. 

Restaurants have suffered the highest sales and job losses of any industry since the pandemic began. And sustained the most whiplash. They have opened, closed, been at 50 percent seating capacity and then only allowed to provide take-out meals. 

This problem needs dedicated long-term financial assistance to solve. Our industry leaders do not expect the restaurant sector to recover until 2023, even then it will be largely fast casual establishments and restaurants with limited service that will do well. Full-service restaurants may need until 2025 to get back to pre-COVID-19 revenue. 

We have reason for optimism right now about the pandemic, but the vaccine distribution is no panacea. Restaurants won’t suddenly have the rent money, crowded dining rooms or the ability to rehire workers. That is why we need state relief funds focused on small businesses through at least the next fiscal year. 

I like to envision this time next year with restaurants booked solid, staffing at capacity and owners moving their finances back into the black. But I am a realist, and officials should be, too. Virginia needs to extend the relief fund through June 2022 to hold off further economic devastation and keep the lights on in our favorite eateries.  

Eric Terry is president of the Virginia Restaurant, Lodging & Travel Association.

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