Restaurants plead for more relief as Delta variant keeps diners away

After demand for aid far outweighed supply, restaurant groups call on Congress to replenish rescue fund

370,000 restaurant owners filed applications for relief, but less than one-third were approved before funding ran dry. (iStock)
370,000 restaurant owners filed applications for relief, but less than one-third were approved before funding ran dry. (iStock)

The restaurant industry is coming back for seconds.

The National Restaurant Association on Tuesday urged lawmakers to replenish the Restaurant Revitalization Fund, warning that increased costs and changes to consumer behavior amid rising caseloads has put restaurant owners under “crushing long-term debt loads.”

“The small gains that our industry has made toward financial security are in danger of being
wiped out, dashing the hopes of communities, entrepreneurs, and consumers nationwide,” the association wrote in a letter to Congressional leaders co-signed by 51 other state and local restaurant groups.

The fund was created under the American Rescue Plan to provide grants to restaurants and bars that need Covid-19-related relief. Under the program, businesses could receive up to $10 million per business and no more than $5 million per physical location.

But demand for relief far outweighed supply. More than 370,000 restaurant owners filed applications, seeking $75 billion in assistance. But only 105,000 were approved for grants, averaging about $272,000 each, before funding ran dry in July.

In New York State alone there are nearly 18,000 pending applications, the second-highest number nationally, totaling almost $6 billion in stabilization funding that would be addressed by the $60 billion proposed replenishment bills.

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“The rise of coronavirus variants, and the mandates that often follow, threaten to push these restaurants closer to permanently closing their doors,” Melissa Fleischut, CEO of the New York State Restaurant Association, said in a statement. “It’s time for Congress to step in and fulfill the promise of the RRF.”

The push comes as the Covid-19 delta variant threatens restaurants as officials once again increase restrictions on businesses. Consumers have changed their eating habits in recent weeks, according to a survey of 1,000 adults conducted by the National Restaurant Association last week.

Nine percent of adults have canceled existing plans to go out to a restaurant in recent weeks, the survey found, while 19 percent say they have stopped going out to restaurants entirely.

Additionally, one in three respondents said they would be less likely to go out to a restaurant if proof of vaccine is required to dine inside, as is now the case in New York City.

“For an industry that requires a ‘full house’ every evening to make a profit, this is a dangerous trend,” Sean Kennedy, executive vice president of Public Affairs for the National Restaurant Association, said in a statement. “These changes indicate declining consumer confidence that will make it more difficult for most restaurant owners to maintain their delicate financial stability.”

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