When Gov. Jared Polis ordered the closure of dine-in services at restaurants throughout the state on March 16, it placed businesses in a precarious position. They could continue to serve by offering take-out and delivery, or shutter the doors and wait out the storm.
Ted Nelson’s Steakhouse in Montrose chose the latter, closing shop for a few weeks.
“I've never seen grocery shelves empty like this. It's challenging for everybody. It's going to impact us all,” said Ted Nelson, owner of the steakhouse, back in March. “I don't think, unless you were alive in World War II, you haven't seen what it's like now. I’ve never experienced it before.”
After returning with a limited take-out menu a few weeks later and experiencing steady business over the past month, Nelson’s outlook has, for the most part, stayed the same.
“The whole hospitality business is going to come back very different in my opinion,” said Nelson.
With the stay-at-home order lifted, restrictions on businesses are starting to loosen. Retail businesses can offer curbside delivery while large workplaces can hold 50% capacity.
Restaurants, however, must wait until mid-May at the earliest to reopen their dining area to the public, Polis said.
The governor indicated he’s waiting for further data to make final decisions on reopening dates for restaurants, bars and gyms.
One county is fast tracking that timeline.
On April 29, Mesa County received state approval to reopen in phases. With the waiver, restrictions in the county are loosened, which means restaurants are allowed to serve dine-in customers at 30% of their usual capacity with social distancing measures in place.
Nelson indicated he was skeptical when he heard about the arrangement.
“I just don’t know how they’re going to do it,” he said. “The guests just can’t wait in the lobby.”
Nelson mentioned restaurants and bars create a different feel and experience for customers. With limited capacity orders, there may not be much incentive for customers to take the risk.
“People go to a bar to visit and talk about how their day went,” he said. “If there’s nobody in there, they’ll just go home.”
Tables are spread out more than usual to maintain safe physical distancing measures. Even with a different feel, any sort of capacity may be welcomed for restaurants that are struggling. Colorado Boy in Montrose, while steady, has seen slower business.
“Business is slow but we’re doing the best we can,” said owner Jenny McClellan.
With restaurants shuttered over the past month, unemployment rates continue to rise.
According to data released by the U.S Bureau of Labor Statistics, labor force data by county showed the unemployment rate in Montrose county in 2019 was an average of 3.1%. Early data for 2020 was not available.
However, the unemployment rate during March in Colorado rose to 4.5% after sitting at 2.5% from Oct. 2019 to Feb. 2020, potentially signifying an increase in certain counties.
Some employees were affected in Montrose. Colorado Boy and The Vine Market and Bistro had to cut hours or lay off employees.
Data for April will be released later this month.
The hospitality industry has experienced the biggest blows compared to other industries.
According to the Colorado Department of Labor and Employment, the hospitality industry leads unemployment claims in Colorado. For the week ending April 11, accommodation and food services led all industries with 8,174 unemployment claims. Industry-level claims data for the past few weeks was not yet available, but CDLE places hospitality claims near 55,000.
Up until April 25, CDLE has paid out $86 million in benefits to the unemployed in Colorado. $19 million in regular benefits were paid out on an average weekly basis during the height of the Great Recession from 2009 to 2010. $102.8 million is the highest monthly total on record, paid out in May 2009.
Even when restaurants are allowed to reopen, some may not make it, Nelson noted.
“In the short term, there may be some businesses that are not going to make it,” said Nelson, who’s been in the hospitality business for 58 years. “There’s a lot of people that might not feel comfortable going into a restaurant again.”
For Nelson’s Steakhouse, the revenue stream opened back up. Once Nelson finalized a menu with take-out, the restaurant saw steady business, with Nelson amassing enough revenue to cover labor and food costs.
Once he’s able to reopen the restaurant, which Nelson believes won’t happen until June 1 at the earliest, he anticipates take-out will still make up 50% of business.
Until then, there’s a lot of variables to consider when determining the timeline for restaurants to return to normal, he said.
“All of us are going to have to be flexible at this juncture because the old way of doing business is not going to exist for casual dine-in restaurants,” Nelson said. “There's going to be a lot of challenges for a lot of restaurants to implement business in 2020.”