Covid-19 restrictions greatly impacted bars and restaurants in the third quarter

Just recently, Explore Minnesota released a survey it conducted on businesses in the Hospitality Sector. The survey, which was done in partnership with Hospitality Minnesota and the Minneapolis Fed, focused on how well businesses fared in light of the COVID-19 restrictions that characterized the hospitality industry in the third quarter.

Unsurprisingly,

Nearly 80% of respondents reported lower fall revenue, and more than 80% also reported lower fall customer traffic. Even larger portions of respondents expect lower winter revenue and customer traffic.

Food/drink establishments reported the worst business activity levels, while resorts and campgrounds reported the best, though best is relative and, in this case, still bad.

Geographically, the metro and southern Minnesota regions reported the worst business levels, followed by central Minnesota. Northeast and northwest Minnesota reported similar levels of the best results among regions. Again, best is relative.

Restaurants and bars were heavily affected

What stands out is how badly affected bars and restaurants were due to COVID-19 restrictions.

Bars and restaurants usually face a slow winter. However, in 2020, throughout fall and the beginning of winter, bars and restaurants operated with either limited indoor dining capacity or a complete ban on indoor dining.

A complete ban on restaurant and bar dining was in effect starting mid-November 2020 through the beginning of January this year. The survey was conducted in mid-December when restaurants and bars were closed.

Consequently, food/drink establishments faced the most difficulty, with at least 60 percent reporting declining revenues. Other places, like resorts and campgrounds, experienced revenue growth.

In regard to solvency, roughly 50 percent of all businesses said they would not survive beyond 6 months if lockdowns persisted. Food/drink establishments had the worst outlook among most respondents. 

Currently, Governor Walz has loosened restrictions on indoor dining. However, as I wrote on Tuesday, these changes haven’t inspired business owners in the hospitality industry who have gotten used to uncertainty.