(Radio Iowa) – A leader in Iowa’s hospitality industry says most Iowa restaurants, bars and pubs are struggling financially and up to 600 may close this year. Iowa Restaurant Association president and CEO Jessica Dunker said the price of food and labor costs are exceptionally high and raising menu prices any higher could drive away customers.

“While revenue is high — and people see the record revenue into the restaurant industry — there is no profitability,” Dunker said during an interview with Radio Iowa. “…We’ve hit that threshold of what we can charge…We’re worried Iowa’s restaurants. We’re worried that people that just found their way through the COVID mess are now dealing with the difficulties of being able to survive in the marketplace and, unfortunately, the data backs up that there’s a lot of struggle out there.”

The association’s 2024 survey of Iowa restaurants found half were not profitable and, while about 17% of U.S. restaurants close in their first year, Dunker said there’s another trend she’s watching. “Long time owners who are just choosing…to say: ‘It’s gotten too tough,’” Dunker said. “When we start to lose those, that’s when we start to get worried and that’s the trend that concerns us the most.”

Dunker indicated there’s another troubling trend nationally. About a third of Americans say they’ve cut back on eating out, getting food from a drive through or ordering take out. Iowa has nearly 6500 eating and drinking establishments that employ over 147,000.