Virus clouds summertime hopes for businesses

Ready or not, the summer of 2020 has arrived — a summer like none before.

The coronavirus pandemic crisis remains, and Delaware Gov. John Carney, citing ongoing public health concerns, last week announced a delay in the step from Phase 2 to Phase 3 recovery plans.

A cloud of uncertainty hovers over the First State’s economy. Particularly hard hit: Delaware’s restaurant industry.

“It’s a dire situation, and perhaps most startling is that 75 percent of our restaurants expect severe financial losses continuing for the next six months,” said Karen Stauffer, communication director for the Delaware Restaurant Association.

Carol Everhart, CEO/president of the Rehoboth Beach/Dewey Beach Chamber of Commerce, says it is difficult to forecast what the summer will bring, along coastal Delaware and elsewhere.

“The expectation, until we know what Phase 3 is and how long it will last, is a guess. Because Phase 2 right now has a lot of limitations,” said Ms. Everhart. “It has been devastating. And for our resort area, we are not like our neighbors that really have their tourism industry go from May to September. We are 52 weekends a year; 52 extended weekends. We get the visitors year round, so we have lost half a year.”

Tourism, one of Delaware’s Top 5 industries, was crippled the first several months of the pandemic, but has begun to get back on its feet with the June 1 lifting of the travel ban.

“These are the money months for tourism in southern Delaware that start late spring and really pick up in like August and go all the way through November. We’re still in June, and I think we’re seeing encouraging signs with respect to hotel occupancy,” said Southern Delaware Tourism Executive Director Scott Thomas.

“With travel restrictions lifted as of June 1, hotels are able to kind of serve their guests again. The occupancy level is really only trailing say at this point last year on weekends in June by about 10 percent, which is a good sign. Because not too long ago and in the dark days of the pandemic occupancy obviously was down 90 percent-plus.

“It is not going to be fast, but it certainly can be gradual. We’re starting to see the signs now,” said Mr. Thomas. “I don’t have as good of a pulse on restaurants yet. It’s a long climb out, obviously.”

The Delaware Restaurant Association, which encompasses nearly 2,000 restaurants that in 2018 contributed an estimated $2.2 billion in sales, has a pulse and the association says it is not good.

DRA’s revised pandemic impact as of mid-June says Delaware’s restaurant industry was the single-most financially impacted industry in the state, having lost two-thirds of its eating and drinking place jobs between February and April. That ranks third only behind Vermont and New York state, according to the DRA.

“The restaurants have a bigger problem,” said Ms. Everhart. “Let’s say that my restaurant has so many square feet in it, and right now the fire marshal capacity for those restaurants is also 60 percent. That sounds pretty good, except there are stipulations within my walls. In other words, when this started, you need six feet apart, but you need two feet for the chairs to pull back. So, every seating area must be eight feet apart. So, the first time it was at 30 percent, we were at capacity. Unless the interior stipulations are adjusted, they are at the original seating.”

On the positive side, the governor did allow restaurants to utilize exterior seating, with social distancing. “And we’ve been lucky; the weather has been nice. If the weather cooperates, they do have outside seating available, but it is nowhere near the original capacity,” said Ms. Everhart.

Delaware’s restaurant and food service industry lost more than $472 million from the state of the shutdown in mid-March through mid-June, according to the DRA. The association also states that 75 percent of Delaware restaurants will be operating at a “severe financial loss” for the next six months, and national data estimates that 20 to 30 percent of small business, neighborhood restaurant operators may permanently close their doors by the end of 2020.

“And it is restaurants plus … the plus is retail,” said Ms. Everhart. “There is already big competition with the internet. Then they are shut down for a length of time and now there are stipulations on how many customers they can have. If you lose half of the year no matter what your business, and it continues on there is less opportunity to serve your normal customer base, you are going to lose more. Simple math.”

Of late, many states have experienced spikes in coronavirus cases, precipitating renewed restrictions, including business shutdowns.
Due to COVID-19 spread, The Starboard restaurant and bar in Dewey Beach announced via Facebook it would be closed several days, from noon Friday with plans to reopen Tuesday morning, June 30.

“Due to an increased exposure within our beach communities, we’re taking the necessary steps to ensure the safety of our staff and our guests and will be shutting down to test all of our employees. COVID-19 is serious, and aggressive action needs to be taken to prevent the spread of this virus and promote the health and safety of our families, coworkers, customers, and fellow industry members,” The Starboard post said. “We will continue to do our part and follow all safety precautions and public health guidelines, and ask that you join us in our commitment to social distancing and wearing face coverings when we reopen on Tuesday morning for our regular breakfast service and prepare to safely enjoy the rest of our summer season.”

“In Rehoboth, they require a mask on the boardwalk and the streets. It is recommended in Dewey,” said Ms. Everhart. “There is no mask required on beach, just social distance.”

Delaware is well positioned in the populated Mid-Atlantic/Northeast regions for potential rebound.

“Of course, with us being a drive-to destination certainly helps travelers’ sentiment as far as getting here,” said Mr. Thomas.

“Do we have a high number of visitors? Yes, we do. There is an increased number of day visitors. Best guess on that, there are over 20 million people within a two- to three-hour drive of our destination. Many of them are looking for a reprieve, even if it’s just for a day,” said Ms. Everhart. “So, we see a very high day visitor visitation. The only way we can track the overnight is through rentals, which I am told are strong and through this accommodation which looks like it is coming right back.”

Visitor confidence in traveling may likely factor in the fate of the summer season.

“A lot of the business here, from our hotels and restaurants, they are taking this pandemic seriously. We’re relaying all the research practices; wearing masks on the boardwalks to the distancing on the beach,” Mr. Thomas said. “I think right now that is more important than ever because that is helping to ease a lot of travelers’ concerns. I think relaying that and showcasing that is really what is getting people, the travelers’ attention right now, as far as determining “Should I keep my trip intact? Should I delay?’ and things like that.”

On a nationwide level, Mr. Thomas said he has been sitting in on calls with U.S. Travel and Longwoods International.

“We’re working together to really conduct a lot of visitor research and travel research. Right now, the latest figure as of this week is 46 percent of U.S. travelers say they are comfortable traveling, which … again it’s slowly turning. It is going to take some time.”
While hotels/motels and rentals have rebounded, restaurants are another story.

What is needed most, Ms. Everhart says, is clarity, direction and implementation of Phase 3, the sooner the better.

“Every chamber in the state has been listening to their members and we’ve asked for basically three things,” said Ms. Everhart. “Number one: When is Phase 3 going to start? Most of the reason behind that is so that businesses can prepare. If you tell me next week that I am going to be open in a couple days, I need product, I need staffing, I need schedules … the sooner we know that the better the business can serve the customer and the better they can operate. We were so hopeful that we were going to know that this week and it has been delayed.”

Another movement is a push to allow restaurants to decide the best way to socially distance.

“It’s just one size doesn’t fit all. They need to be able to have some flexibility,” Ms. Everhart said. “And we ask that retail be able to go to 100 percent. Again, just like they do at the big-box store, they can do it in the small stores; put the markers down, put the arrows down. Let them socially distance inside under the roof. We’re very, very concerned. The longer this goes on the harder it is going to be to recover.”

The DRA says the ripple effect and negative consequences of COVID-19 do not stop at restaurant doors and will continue throughout the supply chain in the months ahead.

“We are advocating for increased flexibility in reopening guidelines, and some sort of direct financial relief for our industry … and industry that is so important to the state’s economy, as well as the cornerstone of all of our neighborhoods and communities,” said Ms. Stauffer. “We need restaurants to succeed!”

Mr. Thomas is cautiously optimistic for a productive summer season.

“So far, that has been a good sign for southern Delaware and the Delaware beaches. We’re hoping that that continues. I think barring any setbacks with public health, and hospitalizations and spiking and all of that we’re hoping that this continues, the positive trend continues,” Mr. Thomas said. “Everyone is hoping. There is no reason we can’t. We’ve just got to do the right thing. We’re keeping fingers crossed.”

“We certainly want the visitors to continue to come. We want them to be safe,” Ms. Everhart said. “We are hoping we get direction, not only on when Phase 3 will begin, but what it will include. We do not know That. And how long it may last. Is Phase 3, do we go from that to normal? Or is there a Phase 3A, 3B … we don’t know. There is a lot of finger crossing going on.”

Helpful Coronavirus links

Delaware Division of Health Coronavirus Page
CDC: About the Coronavirus Disease 2019
CDC: What to do if You Are Sick
Johns Hopkins Coronavirus Resource Center
AP News Coronavirus Coverage
Reopening Delaware: Resources for Businesses
Delaware Phase 2 guidance

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