To say that 2020 was a brutal year for restaurants would be an understatement. The National Restaurant Association reports that 2020 revenue levels were $240 billion lower than expected due to the impact of the pandemic. And all told, more than 10% of U.S. restaurants have closed their doors since the start of the coronavirus outbreak. But while the pandemic may have hurt restaurants in a meaningful way, it could also be the very thing that helps save them.
A new beginning for restaurants
When the coronavirus outbreak first erupted, many restaurants were forced to close for in-person dining and pivot to takeout and delivery only. That model worked fairly well for fast- casual eateries and chains, but a lot of higher-end establishments struggled in its wake. After all, customers weren't exactly itching to pay $80 to bring home filet mignon in a styrofoam to-go box.
Even once restaurants did get the green light to start welcoming diners back in, they faced their share of restrictions. Indoor dining had to operate at limited capacity and, in some cities, curfews were established that killed the idea of feeding late-night guests.
But now, those restrictions are largely a thing of the past. Now that much of the U.S. population is vaccinated and the CDC has given people the go-ahead to remove their masks in indoor settings provided they've been inoculated, restaurants are hoping for a surge in diners as things slowly but surely start to get back to normal. And the next few months might really be their time to shine.
For over a year, people have been cooped up at home, itching for social interaction. Not only that, but a large number of workers have been doing their jobs remotely, and may continue to do so even once the health crisis subsides. It's these people who are apt to crave social connections the most, and to gain access to them, they might seek to dine out more frequently.
In fact, between the milder weather and the trajectory the pandemic is taking, at least on U.S. soil, restaurants could be in for a boom this summer as customers seek to bust out of their houses and enjoy meals with family and friends.
Also helping matters is the fact that the U.S. economy is in much better shape now than it was at the start of the year. Not only has the jobless rate declined, but some people may be sitting on extra spending money thanks to a fairly recent round of $1,400 stimulus checks. That's cash that could easily buy a string of nice meals.
All told, there's reason to be hopeful that restaurants will soon enjoy a substantial revenue boost after a year of struggles. And that's good news not only for them but for real estate investors as well.
Commercial landlords rely on restaurants to pay rent, and when eateries close, that leaves vacancies in their wake. If the desire for social interaction drives more customers to restaurants, it'll help them regain their financial footing and give them the staying power they need to keep their doors open -- and keep those rent checks flowing.