Six Critical Points for Restaurants to Consider Before Reopening

Now that New York City has begun to reopen, restaurant dining is finally on the horizon after three months of shutdown. Outdoor eating could begin later this month, pending the rollout of the city’s al fresco plan, with indoor service likely coming online in July. But whether an individual restaurant actually should reopen — and with what protections — constitutes a more complicated series of questions, especially during the COVID-19 pandemic that has killed over 17,000 New Yorkers, including many in the hospitality industry.

There is some helpful news on the health front. The city launched universal testing and contract tracing in early June. Those programs, as well as a new early warning system, should help restaurants better manage the wellbeing of their patrons and employees. Still, these developments might not help detect new infections quickly enough; states like Texas, Arizona, and California have seen infections spike as they reopen their own economies.

There are further reasons for caution. Sit-down guidelines published today will force restaurants to rethink the way they do business. And it’s possible that cash-strapped patrons and workers on enhanced unemployment benefits — who don’t want to risk dying so brunchers can guzzle bottomless mimosas — will not be ready to come back. One can’t blame them. City COVID-19 deaths, which are disproportionately high in lower-income areas, have only recently dropped below 10 per day, and new daily cases, now below 100, rarely fell below 500 as of late May. Accordingly, here’s a closer look at six things restaurants should consider while deciding whether and when to relaunch.

Sit-down dining guidelines will require dramatic changes to restaurant business models

New York State finally published its comprehensive sit-down restaurant guidelines today — outdoor guidelines came out last week — and the criteria are naturally strict. The most significant rule is that restaurants will have to cut their occupancy by 50 percent and maintain six-feet of space between tables or customers at the bar. If a restaurant can’t achieve that level of spacing, it can erect physical barriers at least five-feet high between tables.

Outdoor seating, which probably carries less of a risk for transmission, does not have to abide by the 50 percent rule, though. Customers can take off face masks while seated, but might be encouraged to keep them on while not actively eating or drinking, and employees must be screened for COVID-19 before every shift. New York City will likely issue its own guidelines, which might be even stricter.

Somewhat maddeningly, the guidelines offer no window as to when restaurants can move closer back to full capacity.

In short: Everyone should prepare for heavily modified dine-in services. Venues dependent on walk-ins might consider shifting toward a reservation-heavy model to help lock in revenue and cut down on waits. All restaurants might stay open longer to break even amid lower occupancies, and especially so with tasting menu venues that depend on every single guest to stay profitable (though labor costs can quickly get scary with the extra hours). Counter spots and sushi venues with just a few seats in tiny rooms might need to rethink their concepts more broadly, perhaps allowing for moveable barriers to separate bar seats — and the same goes for stripped-down small plates places that previously packed diners elbow to elbow.

Testing isn’t perfect. There’s no vaccine. There’s no guarantee patrons or staffers won’t get sick.

COVID-19 spreads pre-symptomatically (before one gets sick), and asymptomatically (even if one doesn’t get sick). That means those who show no signs of disease can pass it along to others. There’s also no vaccine and there likely won’t be until early 2021. And there’s no concrete evidence that getting infected or receiving a positive antibody test conveys immunity. Any operator who’s worried about the moral or quite frankly legal implications of causing a staffer or patron to get sick will have to reckon with all of the above. Danny Meyer, apparently following this line of thinking, has suggested that indoor dining might not return to some of his restaurants until there is a vaccine.

The one piece of good news on this front is that New York City, as of June 3, has moved to allow universal asymptomatic testing. That means anybody — displaying symptoms or not — can be tested, according to the city’s COVID-19 portal, with an emphasis on retesting for anyone who’s been exposed. Combined with a new contact tracing system, the expanded testing policies should equate to more folks knowing whether they should quarantine. Accordingly, restaurants that do open might consider asking all employees to get tested on a regular basis, while keeping in mind that it can take 48 hours to get back results, more than enough time to infect scores.

Check early warning systems for regional spikes in infection rates

Regional monitoring teams will take a look at state health data, with a particular focus on the infection rate, when deciding whether to slow down the reopening process. That brings up New York’s new early warning system, which allows anyone to monitor positive tests rates and new infections on a daily basis, by region — something that wasn’t available previously. The data also show how infection rates and other variables trend over time, versus the older “unpause dashboard,” which only displays data for a given day.

Let’s say that infections spike after outdoor dining debuts. This chart will provide operators and owners with the data to determine whether they might want to close down, even if the state says it’s okay to stay open. The fact that employees will be able to look at this data as well should also act as a strong check against restaurateurs who decide to open if infections trend upward. So far, there hasn’t hasn’t been enough of a bump in disease transmission to delay the beginning of a new phase.

One thing to keep in mind, however, is that data can be a lagging indicator. Symptoms of the virus can take anywhere from two to 14 days to manifest, according to the Centers for Disease Control, so it might take a full two weeks or longer for the consequences of an outbreak to become evident. By the time the trend is apparent in the infection data, it might be too late.

Consumer demand could take a long time to rebound. Takeout will likely still be key.

Many of the wealthiest diners, who help drive spending at the city’s myriad tasting menu venues and sushi parlors, will remain in the Hamptons and elsewhere. Office workers might continue telecommuting through the year’s end. Corporate private dining is poised to collapse unless Le Bernardin and others find a way to charge lawyers to eat via Zoom, and tourists will theoretically be slow to return to what was the global heart of the pandemic. Diners who remain in the city might be hesitant to return to dining rooms, especially if it means sitting through a three-hour meal while being encouraged to wear a face mask when not eating or drinking.

Then there’s the fact that summer is often the slowest time of the year for restaurants. And finally, a lot of diners won’t have as much disposable income to spend, given wage cuts and an overall unemployment rate hovering between 12 and 20 percent.

Restaurants, in short, could be facing a perfect storm that savages consumer demand. Outdoor dining could help, it’s unlikely that anything will act as a magic bullet. Establishments should take all of the above into consideration when planning to reopen or delay reopenings. At the very least, every restaurant will have to think about maintaining takeout or looking into alternative sources of revenue like mail order. High-end venues like Brooklyn Fare, Sushi Noz, and Cosme should also continued to rely on affordable-ish takeout and delivery options — to soften any revenue blows and to find a way to transform themselves from splurge venues into neighborhood staples.

The revamped federal loan program could give restaurants more wiggle room to slow their reopening

The Paycheck Protection Program, the federal government’s lifeline for small business, initially required restaurants to use 75 percent of loan funds on rehiring, spend that money reasonably quickly, and fully restaff by the end of June. Restaurants who failed to do so would put any loan forgiveness into jeopardy. It was a tough mandate for a community that largely remained (and remains) shuttered. Now, many of those restrictions have been loosened, with most deadlines being pushed back to the end of 2020.

And while many venues will still decide that reopening sooner rather than later is necessary, the revamped paycheck program should help certain establishments stay closed just a bit longer, protect employee health, and help pay undocumented workers who aren’t eligible for traditional unemployment benefits.

Restaurants should be sensitive to the fact that staffers might not be ready to return

Out-of-work restaurant staffers in New York can earn up to $1,200 per week, thanks to $600 supplemental pandemic unemployment insurance payments. This experiment with universal basic income results in many former hospitality staffers earning more while out-of-work than on the job. Those staffers are “not going to come back to work because unemployment is too attractive,” restaurateur and Top Chef head judge Tom Colicchio told Politico in April. That’s perhaps an overstatement; furloughed chefs and waiters who turn down offers to come back will likely lose their benefits, and the $600 payouts end in late July anyway.

Still, there will be deeper motivational certain employees. Besides finances, some workers won’t want to return due to concerns over getting sick.

On that note, more financially secure establishments might consider rebooting with very limited staff, so more workers, especially low-wage workers, can stay home and collect their final weeks of pandemic checks; it would be a nice gesture to staffers who ultimately stand to make less whenever they return to their kitchens and dining rooms. And as long as the federal government is making it financially feasible for more workers to stay home and protect their health — instead of sacrificing their bodies for economic productivity — restaurants should be respectful of that.

Indeed, what a shame it would be if waiters missed out on those final pandemic payments because they were rehired in July, but then furloughed again in August due to a drop in business. It’s just one more issue, on top of newly stringent health responsibilities, that an industry without the greatest track record for fair pay or working conditions will need to pay closer attention to.