A crippling blow to the  hospitality industry


Hello everyone,

The state-imposed coronavirus-driven ban for restaurants and bars became effective last night.  The move had been anticipated but still came as a shock.

Carryout is still an option for many restaurants. But some establishments will simply close, some may never reopen.

The restaurant business has been the source of many of the jobs created in recent years. It also operates on margins of pennies on a dollar.

For some owners, it is a passion that has yet to produce a profit.

Delaware faces the issue of aiding tens of thousands of people, many living paychecks to paycheck,  in an unemployment system that had been used to   4 percent rates.

Meanwhile, the unemployment compensation system still comes with numerous restrictions unsuited to emergencies.

Similar pressures face those working in other areas of the hospitality industry. Delaware’s three racetrack-casinos are closed for gaming and restaurant visits.

Hotels remain open but are operating at only a fraction of capacity and with no revenue from dining or bar service. Worse yet, they deal with lodging taxes that thanks to recent local revenue grabs can now run as high as  11 percent.

As longtime restauranteur Xavier Teixido noted, owners will not be able to keep employees on their payrolls for long.

Governors of nearby states have made similar restaurant and bar closing moves in recent days.

Maryland Gov. Larry Hogan bluntly noted that closing bars and restaurants became a necessity after seeing St. Patrick’s Day weekend crowds.

The same thing happened at Delaware, although crowds were smaller.

Sadly, governors are confronting data, history and science that strongly suggests a skyrocketing number of cases of coronavirus. The situation in portions of southern  New York state is beginning to look dire.

We are in uncharted territory. The even more difficult work of dealing with an economic 911  is now a reality for the business community and lawmakers.

Yesterday, Delaware saw its first case not tied to the University of Delaware community. More will be reported.

The governor and General Assembly need to look at fiscally prudent emergency measures now. This includes an emergency review of the proposed state budget.

Stay safe and take a look at business guidelines  issued by the CDC. – Doug Rainey, chief content officer.

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