Congress should double the Restaurant Revitalization Fund at this critical juncture

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The following is a guest post from Chris Comparato, CEO of Toast.

We need Congress to act ASAP to replenish the Restaurant Revitalization Fund, which last March provided $28.6 billion in federal assistance to tens of thousands of hospitality businesses. Initial funds for the RRF, which is run by the federal government’s Small Business Administration, have already been distributed and the program was initially underfunded.

A replenishment would mean everything to a sector that needs and deserves it. Restaurants have proven their resilience at every turn of this pandemic, again and again adapting to the new rules and realities of operating a people-centered business in a global health crisis. When they were most vulnerable, restaurants invested heavily across the board to adapt to the hand given to them and modernize everything from contactless payments and online ordering and delivery to management. inventory and employee safety.

While restaurateurs who have transformed their businesses have emerged stronger from this crisis, many have still been saddled with debt since the start of the pandemic. Without federal support, there is a difficult road ahead for the industry as a whole. The benefits restaurants bring to our economy are clear: they made $799 billion in sales in 2021 (down $65 billion from 2019) and employed 14.5 million people at the end of 2021 ( down 1 million from pre-pandemic staff). There’s a saying for that: the better the restaurants go, the better the economy goes.

In hindsight, restaurants endured weeks, even months in some cases, of closures in 2020 and, more recently, saw their restaurant crowds temporarily decrease in December and January during the outbreak of the COVID-19 omicron variant. . While some are probably fit for the long haul, they deserve better than going it alone after all they’ve been through. Additionally, many restaurants are skating on thin ice and have yet to receive the funds necessary to survive the long term in the new market landscape.

Main Street calls for help

There is hope on the horizon. Chuck Schumer, the New York Senate Majority Leader, and other congressional advocates are calling for a renewal of RRF funding of about $48 billion. Other members of Congress should join them because this is a Main Street problem. Across America, hotel operators and employees need this replenishment to happen. Consider that in Michigan alone there would be over 16,000 restaurants and bars that are barely making it right now. Consider that in 2021, only 105,000 hospitality businesses received RRF funding out of approximately 370,000 hospitality businesses that applied for it. Consider that 85% of restaurateurs – who were already dealing with very thin margins – saw lower margins than before the pandemic.

Additionally, neither franchisees nor independent restaurants recouped their losses from the tough 2020-2021 cycle, when they also racked up business expenses to adjust to the new normal with investments in technology, employees and customer safety. From the disruption of the pandemic itself to supply chain issues and labor shortages, the restaurant industry has been incredibly challenged but remains resilient.

Investments are more crucial than ever

With omicron largely behind us and the awakening of spring across the country, now is the time for restaurants to invest for the months ahead. Large chains and independent restaurants are entering an era that I like to call “new hospitality,” which focuses on technologies that enable better experiences for customers and employees. These digital tools can help restaurants drive orders through multiple channels, reduce costs, manage inventory, and manage payroll, among other goals.

In this era of new hospitality, financing can help restaurants become more sustainable in physical and digital spaces, making dining experiences more convenient and personalized for consumers and streamlining operations. A key operating result: Restaurants realized they no longer needed to rely too heavily on table service, or in some cases delivery, to make a profit.

For restaurants that quickly adapted and embraced technology, the recovery is headed in the right direction. In Toast’s new report based on data from 57,000 restaurants (7% of the total US market), 2021 sales were up 41% from a year earlier. And on-site restaurant sales have rebounded since the start of the pandemic, increasing 55% in 2021 compared to 2020.

However, this is not the time for the government to fall into idleness. Restaurants need investment to compete in the era of new hospitality. Altogether, the pandemic, supply chain issues and labor shortages have left our nation’s resilient restaurant industry – which is not only a crucial economic driver but an irreplaceable social and cultural element. – in urgent need of help. Members of Congress stepped in last year and helped thousands of restaurants and hotel brands.

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