Around 75% of the state’s 550,000 hotel and restaurant workers are currently out of a job.
The hospitality industry — comprising 13% of the state’s total workforce, including 18,000 food service establishments and 1,800 lodging establishments — languishes on life support, said Lynn Minges, president and CEO of the North Carolina Restaurant & Lodging Association. Gov. Roy Cooper’s March 17 executive order shut down all brick-and-mortar restaurant operations, excepting take-out, delivery, and some curbside service. The governor also issued a statewide stay-at-home order last week that further limited what North Carolinians could do.
As a result, some restaurants may be shuttered for good, even after business restrictions are lifted. Some outlets may return under a different name, Minges said at a John Locke Foundation Shaftesbury Society event Monday, March 30.
Meanwhile, 270,000 North Carolinians filed for unemployment, the governor’s office reported Sunday, compared with 7,500 claims in the two weeks before the restaurant shutdown order was issued. Many await unemployment benefits, in addition to a federal aid package signed into law last week.
Hotels are also struggling. Some watched occupancy rates plummet from 90% to 15%-20%. Others have shuttered entirely. Many also suffer as conventions, concerts, and sporting events canceled. The 2020 Republican National Convention, which is still set for August, booked every hotel in Charlotte.
Minges will speak to lawmakers Tuesday at a legislative “Business Support Group” meeting organized by House Speaker Tim Moore, R-Cleveland. Her association is pushing for tax deferments as well as eased restrictions on alcoholic beverage sales.
Some businesses that haven’t yet halted operations are pivoting to new models, selling larger portions in takeout form, reducing menu options, or selling items from their kitchens normally found at grocery stores. Some restaurants are converting their operations to food trucks.
The innovations are welcome, but they’re not sustainable for the long term, Minges said. Many restaurants could face evictions or equipment losses if they can’t pay landlords or vendors.
“The food is good, but the hospitality is what we excel in,” she said.
If lawmakers defer taxes for a few weeks or months, this could relieve business owners who already owe hundreds of thousands to the N.C. Department of Revenue and other collectors, Minges said. The NCRLA isn’t seeking tax forgiveness, but rather a brief delay to help business owners keep the lights on and retain some employees while waiting for federal relief.
Allowing customers to take cocktails home in closed containers would boost revenues and generate more dollars for local ABC boards and the state.
Even with the policy changes, everyone has to take precautions to limit the spread of COVID-19, Minges said. And that includes the hospitality industry.
“If officials tell us to stay home, that’s what we need to do. If they say we can’t seat and serve guests, we’ve got to hunker down and accept it,” she said.
Those who would like to help unemployed restaurant workers can donate to the N.C. Restaurant Workers Relief Fund.