Research released by the Michigan Restaurant and Lodging Association on Tuesday revealed many hospitality businesses fear they will have to close within the year because of the economic impacts of COVID-19, according to a report in Gongwer.
At least 5,600 restaurant operators say it is unlikely they will still be in business in six months. Two-thirds of hotels report they will only be able to last six more months at current revenue and occupancy levels without additional help. More than half of hotel owners also fear they are in danger of foreclosure.
“It is fundamentally clear that the pandemic is decimating the hospitality industry in this state to a degree never seen or even imagined,” Justin Winslow, president and CEO of MRLA, said in a statement. “While it will take several years and a stable economy to reclaim the size, impact and opportunities produced by this industry, we have not yet reached the bottom.”
The research reported that 80 percent of Michigan restaurant operators indicated their total dollar sales volume in October was lower than it was in October 2019; sales were down 25 percent on average. additionally, 54 percent of operators say their restaurant’s total labor costs are higher than they were prior to the pandemic. This has caused severe damage, with 90 percent of operators saying their profit margin is lower than it was before COVID-19.