When the coronavirus pandemic hit, restaurants took a major beating. It's estimated that 100,000 restaurants closed either permanently or on a long-term basis within six months of the outbreak starting. And while 2021 has been a better year for dining establishments, many are still struggling to recover from the blow 2020 dealt them.
Still, a big reason more restaurants have managed to thrive this year is that capacity limits have been lifted, and patrons have been allowed to fill up dining rooms again. Plus, last year, many restaurants invested in outdoor setups. And this year, they could put those setups to good use at a time when COVID-19 cases were still surging.
But now, the weather is about to take a turn for the much colder in many parts of the country. And that could mean that for many restaurants, outdoor dining will be off the table. The question is: Will that hurt restaurants enough that widespread closures ensue?
A lifeline for restaurants
Although restaurants are allowed to welcome diners for indoor service, many have been reliant on outdoor dining to draw in customers. Even though we're in a very different place with regard to the pandemic than at this time last year, many people still aren't comfortable with the idea of eating indoors. This extends to families of young children, who still aren't eligible for a coronavirus vaccine. And so if outdoor dining needs to go away due to the weather, that could result in a financial blow for restaurants.
Furthermore, some cities have imposed their own restrictions wherein unvaccinated diners aren't allowed to eat indoors at a restaurant. In these cities, those who aren't vaccinated can still dine outdoors. And so losing those customers for a number of months could be brutal.
Some restaurants may be able to continue operating in the cold thanks to a combination of heat lamps, tents, and other accommodations. But ultimately, diners aren't likely to want to enjoy their entrees against a backdrop of howling wind and snow. This means restaurants in some parts of the country may need to steel themselves against a serious decline in revenue until the weather warms again.
But whether restaurants in that boat can survive the wintertime lull is yet to be determined. And that's something real estate investors may be understandably worried about.
Given the number of restaurants that have already closed their doors in the wake of the pandemic, commercial landlords can't afford more closures and vacancies. Plus, shuttered restaurants are bad for local property values. That extends to both the residential and commercial side of real estate.
The Millionacres bottom line
Of course, if COVID-19 case rates decline steadily and vaccination rates pick up, restaurants might manage to see enough indoor foot traffic that the temporary loss of outdoor dining becomes manageable. Furthermore, the introduction of booster shots could make it so that more people are comfortable eating indoors.
But ultimately, restaurants that rely on outdoor dining may need to strategize now to gear up for winter. And real estate investors may need to brace for some sort of impact.