United Group Insurance

Industry leader says Iowa bars and restaurants in ‘absolute crisis’

News

April 20th, 2020 by Ric Hanson

(Radio Iowa) — New data from the hospitality industry indicates total revenue for Iowa bar and restaurant owners has declined 80 percent since the governor ordered their businesses to close March 17th to prevent the spread of COVID-19. Iowa Restaurant Association president and C-E-O Jessica Dunker says the industry is absolutely in crisis.

“If we reopen on May 1st, as we expect, 10 percent won’t open. If that moves to June 1st, we’re expecting 18 percent not to open,” Dunker says. “And if that’s pushed out to July 1st, we expect 25 percent will not reopen.” The governor’s CURRENT proclamation on bar and restaurant closures is set to expire April 30th and Reynolds has not yet indicated if that may be extended. Carry-out and drive thru food and beverage service has been allowed — including carry-out sales of alcoholic beverages, but Dunker says 70 percent of the state’s bars are completely closed.

“If we were to reopen today, only 45 percent of our restaurants and bars would be able to rehire everyone that they have furloughed,” Dunker says. “Over 90 percent of our bars and restaurants have furloughed people and the unemployment claims in our sector are tremendous.” About 40-thousand of the Iowans who’ve filed for unemployment had jobs in Iowa resturants and bars. Dunker says part-timers aren’t counted in that tally — so the total number of laid off workers from the industry is approaching 75-thousand.

“We’re just continuing to be hopeful with social distancing, we might be able to have some level of openings May 1st,” Dunker says. Dunker’s organization is lobbying FEDERAL officials for changes in the “Paycheck Protection Program” which turns the LOAN into a GRANT if the business uses the money on payroll. Dunker says that’s just unrealistic for bars and restaurants that were ordered to close.

“And so while restaurants and bars will have the ability to apply for those PPP loans, we won’t get them forgiven,” Dunker says. “We are going to be taking on debt as an industry in a time when we are least able to repay it.” Dunker made her comments during a weekend appearance on the “Iowa Press” program on Iowa P-B-S. According to the Restaurant Association’s website, there were nearly 63-hundred restaurants and drinking establishments operating in Iowa before the closures ordered on St. Patrick’s Day.