First, the good news for some workers in the hospitality business. In fact, this might be the only good news you can find these days in that industry.
A relatively new company called Better.com, headquartered downtown at 3 WTC, is in the process of hiring an army of new workers. And that army is going to be made up of people who’ve been laid off mostly by New York City restaurants and hotels.
“Our goal is to hire 1,000,” says Vishal Garg, the four-year-old mortgage company’s founder and chief executive. Better.com is in talks to hire furloughed workers from Danny Meyer’s Union Square Hospitality Group, Marriott and the New York Sports Club.
“We’ve already hired 201 new employees since COVID-19 started,” Garg said. He thinks workers who were trained to be nice to people in restaurants and hotels would also treat mortgage seekers the right way.
Right now, of course, everyone is working remotely.
OK, that’s all the good news I could find about restaurants, hotels and any other company that makes its living mostly serving people face-to-face.
All the rest is bad news.
The Bureau of Labor Statistics (BLS) summed it up nicely in its report about the employment situation in March, which showed a massive 701,000 drop in jobs in just that month. “Employment in leisure and hospitality fell by 459,000 mainly in food service and drinking places,” the BLS said.
Not surprising. And don’t be shocked if a million or more food service and booze jobs are lost when the April numbers come out early next month.
But if you stay with me through the bad news I’ll give a couple of predictions and suggestions that might offer some hope — hope that you’ll still be able to get a drink at your favorite bar, food at a place where you like to dine and maybe even a night at a hotel when this is all over.
At least you’ll be able to do all that if these places can survive the government’s frantic reaction to the tiny bug that’s ruining spring for all of us.
“What’s next? We wait,” says Barry Dry, owner of Parched Hospitality Group and Hole in the Wall restaurants. “Hopefully the CARES Act funding comes through and we can bring our core staff back into the mix and start planning on how to reopen in the most efficient way,” he told me.
The Coronavirus Aid, Relief and Economic Security Act — or CARES Act — was signed into law by President Trump last week. It’s part of a multitrillion-dollar bailout package for companies that is likely to grow as time goes on.
But there’s a problem. Giving out all that money isn’t easy or efficient. And small businesses are already reporting trouble getting government money approved.
“Some banks are not participating in the loans program,” Des O’Brien, who owns and runs several restaurants and bars in Manhattan. “Banks that are will only service existing accounts. So, if your bank is not participating you are left high and dry without access to loans.”
O’Brien has a suggestion.
Rather than letting banks handle all the bailout money, the Trump Administration could order insurance companies to make good on so-called business interruption insurance policies.
Most businesses, including restaurants and bars, carry this type of insurance. But normally things like viruses aren’t covered by these policies.
If Washington needs an excuse to activate this insurance it could argue that these business weren’t shut down by the virus; they were closed by government edict.
But no excuse is really necessary. Washington could simply indemnify the insurers for the coverage and use insurance companies as middlemen to get aid more quickly to all small businesses that will get tangled up in bureaucracy if they go through banks.
Here’s another idea.
Once the leisure industry gets back up and running, the Trump Administration should restore the business entertainment deduction that was eliminated last year.
What does the future look like for the hospitality industry?
If you judge by how consumers are feeling, the industry should be very pessimistic. The Bloomberg Consumer Comfort Index suffered its biggest drop in history last week.
But Jim Balis, managing director of strategic operations at CapitalSpring, is more upbeat.
“I think the restaurant business isn’t going anywhere. My belief is, it will come back. Human beings are social beings,” Balis said. But, he added, “It will take time.”