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The Sunshine Economy

The Sunshine Economy: How Can The Restaurant Business Bounce Back from COVID-19?

A man wearing a mask sits outdoors at a restaurant.
Matias J. Ocner
via Miami Herald
Outdoor and take-out dining was the only business allowed for weeks at South Florida restaurants before indoor service was allowed in late August, but only at 50 percent capacity.

Tens of thousands of jobs have been lost, restaurants have closed permanently while others struggle to get by on a fraction of their business as they slowly and partially reopen. How can the industry bounce back?

Michelle Bernstein opened Café La Trova in 2019 in Little Havana. It was a success with its mix of pre-Castro Cuban cocktails and her take on Cuban classic dishes. It was her most recent restaurant as a co-owner in her culinary career in Miami that goes back more than 20 years.

But that success did not insulate her from the economic consequences of COVID-19. One day this summer she arrived to the restaurant to find an eviction notice. She was late with the monthly rent.

"I ripped it off and ripped it into a million pieces," she said. "We immediately called our lawyer."

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According to court documents, her landlord argues she was more than five days late paying rent in May, June and July, and when rent was paid, it did not include the late penalty. A hearing is scheduled Wednesday.

In the meantime, Café La Trova and Bernstein's other restaurant, Sweet Liberty, remain closed except for take-out and the occasional outdoor dining. "We're just trying to figure it all out. It's tough."

The restaurant industry still is in a deep recession. South Florida restaurants can only host half the number of customers in their dining rooms than they could before the pandemic. That limitation comes after the businesses were restricted to selling only to-go orders for weeks.

Employment has cratered, hundreds of restaurants are expected to close for good, and business has slowed to a fraction of what it had been.

One in six restaurants — nearly 100,000 — have permanently closed or will stay closed for a long stretch according to a national survey from the National Restaurant Association. There were about 13,000 restaurants in South Florida before COVID-19.

Between March and April, half of the restaurant and hotel jobs disappeared in South Florida. Employment in the sector fell to a more than 30-year low this spring as restaurants were relegated to take-out food only. And the hiring rebound has been shallow.

Restaurant Job Loss

Niven Patel used to have 60 people working for his two Ghee Indian Kitchen restaurants. Now there are 18. One of the locations remains closed, and the reopened restaurant is getting by on 40 percent of its pre-pandemic business.

"I don't really see huge upticks in our business volumes," he said. "It's stabilized to where our numbers work and we can survive."

That means break-even according to Patel. But for how long remains unknown.

Amid this uncertainty, Patel opened a new restaurant. Mamey is in a new hotel near the University of Miami campus. He called it "a little bit of hope" for independent restaurants.

"I think it's going to take eight to 10 years for us to be where we once were," Bernstein said.

Marcelo Montalvan and his son Marcelo Andres aren't waiting. They hope to add a sixth Fuddruckers location to their restaurant portfolio in South Florida by the end of the year.

"I feel very positive about the future and confident that it's going to happen," said Andres, the chief operating officer of the family company that owns and runs five Fuddruckers in Miami-Dade and Broward counties.

They have about 150 full-time employees and another 100 part-time. They received Paycheck Protection Program loans which allowed them to keep their workers on payroll when the restaurants were forced to closed.

The Montalvans cut their salaries while giving some full-time managers raises. Hours for part-timers have been slight reduced.

"The industry needs people to be comfortable to come outside of their houses again," Andres said.

Tom Hudson is WLRN's Senior Economics Editor and Special Correspondent.