Near the end of last week, Yelp released the results of the platform’s latest local economic impact report. According the report, published June 25, 2020, 23,981 restaurants that were open as of March 1 have now closed.
Yelp found that most of the restaurant closures occurred in March, indicating that operators who were already facing challenges were unable to reopen—at all—due to the COVID-19 pandemic. The only businesses hit harder than restaurants are categorized as shopping and retail.
The number of closures could be much higher. Yelp clarified in their report that the count is most probably an estimate—the platform relies on owners to mark their businesses “closed.” Some business owners haven’t taken the time, likely because they’re dealing with more pressing matters, to make that change to their Yelp page. For the report, the platform didn’t count businesses that are open but operating under reduced hours. The report doesn’t appear to include businesses Yelp designates “nightlife,” which includes sports bars and lounges.
On March 18, the Washington Post reported that Tom Colicchio said 75 percent of restaurants would close. Colicchio clarified that the number wasn’t based on data but on his knowledge and experience as an operator, and later reduced his estimate to 40 or 50 percent. On April 17, the James Beard Foundation published the results of a survey of “just over 1,400” restaurant owners; 38 percent had closed “temporarily or potentially permanently.”
Yelp’s closure number provides a higher-resolution picture of the restaurant business than previous estimates. Unfortunately, the platform’s closure count lays bare the stark reality restaurant owners and operators have been facing since March. And while not as dramatic as estimates other sources have made, 24,000 restaurant closures is a devastating bloodbath.
According to the report, Yelp’s “diners seated” data fell “essentially to zero.” That makes sense given the number of mandated closures and different restrictions imposed on businesses, designating which were labeled essential and could remain open. By early June, diners seated numbers increased, down 57 percent when compared to pre-pandemic data.
However, that number may fall again or at least see no further, immediate growth due to reported spikes in COVID-19 infections. Some states and cities are currently reassessing their reopening plans. Texas Governor Greg Abbott reduced dine-in capacity to 50 percent of a restaurant’s capacity, at the same time closing down all bars (identified as businesses that receive more than 51 percent of gross receipts from alcohol sales).
New Jersey Governor Phil Murphy announced today that the reopening of dining rooms—scheduled to occur this week—will be delayed. Restaurants will be limited to offering delivery and takeout only. New York Governor Andrew Cuozzo and New York City Mayor Bill di Blasio announced that they may follow Governor Murphy’s example. Operators should know by Wednesday of this week if dine-in service will be permitted.
Along with reduced dining room capacities and bar closures, some governors and mayors have mandated that masks must be worn in public. California, Nevada and Washington have issued such orders, as have the cities of Nashville and Kansas City. These mandates, paired with dining room capacity restrictions, force front-of-house team members into the role of policing guests, which also puts them at risk for potential confrontations. Not only is that an awkward position, it’s dangerous if COVID-19 is resurging and mutating, placing servers, FOH managers, and their coworkers at higher risk for infection.
While the Yelp report does list some potential positives for the restaurant business, recent developments still paint a grim picture. What many operators feared—reopening their doors or increasing dining room capacities just to be forced to close or reduce seating again—is coming true in several markets. It’s clear that restaurant, nightlife and entertainment venue operators need more support and more relief.
I’ve been studying and writing about the hospitality industry since 2006. Like so many people, I started my journey in this business by working as a host, server and bartender. I was introduced to nightlife in Chicago, learning the ins and outs of nightclubs and after-hours hot spots.
After moving to Las Vegas nearly 20 years ago, I both co-owned a valet company and helped promote the club it serviced. That led to me taking on the role of editor for a Las Vegas hospitality industry publication.
A few short years later, I continued along my journey of hospitality industry reporting. I went from contributing to a major industry outlet to taking on the role of editor and content curator.