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COVID ECONOMICS


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#21 Mike K.

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Posted 23 April 2020 - 07:56 AM

I don’t think the restaurant industry is coming back the way we’ve seen it for the last few generations.

Can you make a 100-seat restaurant viable at 30-seats? I don’t think you can. There will also be an intense image problem once restaurants start re-opening as one case, just a single case of a COVID diagnosis of a staff member, will be detrimental to that specific business and the local dining industry to some extent.

Would you go to an eatery where a member of the kitchen staff has COVID, and now the rest of the staff could have it? I don’t think so. The service industry is also very tightly knit, so after the end of a shift you’ll have roving groups of service workers going out together. Now the staff of one restaurant will have been exposed to staff from several others all in one night.

Perhaps the way to move forward here is to offer relief for these businesses to close down with dignity, to help pay down debts, to walk away with some money in their pockets rather than to seek rent/lease forgiveness.

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#22 Victoria Watcher

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Posted 23 April 2020 - 07:59 AM

i think you overemphasize it.  it'll come back.  but slowly.  maybe half the restaurants being gone will help the health of those left operating.  hundreds or probably thousands of canadian restaurant workers already have/had covid-19.  i'm not sure individual businesses are in much danger of being singled out anymore.

 

we need to wash hands upon entering a restaurant.  and certainly tables should already be clear of everything when you sit.  no cutlery pre-wraps no condiments like salt/pepper.  maybe restaurants can provide hot towels or similar before meals.


Edited by Victoria Watcher, 23 April 2020 - 08:03 AM.


#23 lanforod

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Posted 23 April 2020 - 08:04 AM

^ doesn't help with asymptomatic carriers



#24 Victoria Watcher

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Posted 23 April 2020 - 08:10 AM

^ doesn't help with asymptomatic carriers

 

almost all restaurant workers would be asymptomatic right?  their typical age group.



#25 spanky123

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Posted 23 April 2020 - 08:13 AM

I don’t think the restaurant industry is coming back the way we’ve seen it for the last few generations.

Can you make a 100-seat restaurant viable at 30-seats? I don’t think you can. There will also be an intense image problem once restaurants start re-opening as one case, just a single case of a COVID diagnosis of a staff member, will be detrimental to that specific business and the local dining industry to some extent.

Would you go to an eatery where a member of the kitchen staff has COVID, and now the rest of the staff could have it? I don’t think so. The service industry is also very tightly knit, so after the end of a shift you’ll have roving groups of service workers going out together. Now the staff of one restaurant will have been exposed to staff from several others all in one night.

Perhaps the way to move forward here is to offer relief for these businesses to close down with dignity, to help pay down debts, to walk away with some money in their pockets rather than to seek rent/lease forgiveness.

 

One industry consultant told me that he felt the only survivors in the restaurant industry will be the chains. They are the only ones with the systems and financial capacity to manage the startups and shutdowns and can weather a period of time running at reduced capacity.

 

The rent relief program announced by the Feds requires Provincial support and at the moment anticipates offering a loan to landlords who reduce or forgive rent. Like many of the announced programs there are no further details or timelines for implementation yet.


Edited by spanky123, 23 April 2020 - 08:13 AM.


#26 lanforod

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Posted 23 April 2020 - 08:13 AM

I'm not a doctor/Covid researcher, so I can't answer that. That said, there isn't a lot we can do about those carriers when things start opening back up - the biggest thing is likely requiring masks, a step I hate personally and one that doesn't work in a restaurant setting for the patrons anyways. Kinda need the mask off to eat.


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#27 lanforod

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Posted 23 April 2020 - 08:14 AM

One industry consultant told me that he felt the only survivors in the restaurant industry will be the chains. They are the only ones with the systems and financial capacity to manage the startups and shutdowns and can weather a period of time running at reduced capacity.

 

The rent relief program announced by the Feds requires Provincial support and at the moment anticipates offering a loan to landlords who reduce or forgive rent. Like many of the announced programs there are no further details or timelines for implementation yet.

 

I think some of the really small ones will survive fine. Eg. the mom n pop style ones that are able to do takeout right now - small sushi places for example.



#28 Mike K.

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Posted 23 April 2020 - 08:20 AM

i think you overemphasize it. it'll come back. but slowly. maybe half the restaurants being gone will help the health of those left operating. hundreds or probably thousands of canadian restaurant workers already have/had covid-19. i'm not sure individual businesses are in much danger of being singled out anymore.

we need to wash hands upon entering a restaurant. and certainly tables should already be clear of everything when you sit. no cutlery pre-wraps no condiments like salt/pepper. maybe restaurants can provide hot towels or similar before meals.

That’s the thing, though. The “slowly” won’t work, not when you need 300 people through the door everyday just to keep the operation in the black.

If you’re at 100 patrons now you’re not going to sustain your operation.
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#29 Mike K.

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Posted 23 April 2020 - 08:23 AM

What we need now from our leaders is a little bit of honest forethought.

“If your business can survive with the following limits we will be placing on your industry, here are the resources for you. If you do not have a business plan to make your operation viable given the future restrictions, here’s a winding down program for you.”

If I’m an operator of a 100-seat restaurant that I know needs 300 patrons a day to remain viable, I know exactly what a 1/3 reduction in my seating capacity will mean. But I need to know what the government intends to do in May and June.

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#30 Victoria Watcher

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Posted 23 April 2020 - 08:23 AM

some landlords will take something rather than nothing though.  so you might get a cut to or deferral of your rent for a while.



#31 Victoria Watcher

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Posted 23 April 2020 - 08:25 AM

I think some of the really small ones will survive fine. Eg. the mom n pop style ones that are able to do takeout right now - small sushi places for example.

 

i also think some/many can survive where the owners can borrow (more) money against their homes.


Edited by Victoria Watcher, 23 April 2020 - 08:25 AM.


#32 Mike K.

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Posted 23 April 2020 - 08:26 AM

some landlords will take something rather than nothing though. so you might get a cut to or deferral of your rent for a while.


The rent is only one cost.

The industry needs to know very soon what limitations will be placed upon it so that individuals can spend the next two months figuring out what to do rather than sitting around watching their restaurants collect dust.
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#33 spanky123

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Posted 23 April 2020 - 08:30 AM

i also think some/many can survive where the owners can borrow (more) money against their homes.

 

A lot of restaurant owners don't own homes.



#34 spanky123

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Posted 23 April 2020 - 08:35 AM

What we need now from our leaders is a little bit of honest forethought.

 

Agreed. There are a lot of 'announced' programs for business yet the only one that businesses can take advantage of today is the 10% reduction in remittances. Everything else is 'coming soon'. 

 

I think it is a very dangerous belief to think that you can just let a business go under and that the owner will magically want to start over again from scratch and put their own money at risk again. That is assuming of course that debts such as remittances, vacation pay, loans and severance don't follow them personally and force a personal bankruptcy in addition to the corporate one. 

 

It is more likely in my opinion that they will just prefer to sit and collect their $2,000 a month for a while like everyone else.



#35 Victoria Watcher

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Posted 23 April 2020 - 08:46 AM

there seems to be lots of talk of nothing substantial really opening before after may long weekend.  already next week we have the first commercial rent payment coming where no revenue was earned in the entire month.  if no openings until after may long weekend (may 19th) that'l be nearly another month.


Edited by Victoria Watcher, 23 April 2020 - 08:47 AM.


#36 spanky123

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Posted 23 April 2020 - 09:05 AM

there seems to be lots of talk of nothing substantial really opening before after may long weekend.  already next week we have the first commercial rent payment coming where no revenue was earned in the entire month.  if no openings until after may long weekend (may 19th) that'l be nearly another month.

 

This is exactly what I have been referencing, the conflict between health officers who want to keep everything shut down until there is a vaccine vs politicians who are realizing that the ongoing shut down isn't sustainable. We have already announced measures that will make us the most indebted country in the developed world as a % of GDP yet every day the Feds keep announcing more. The Provinces already have the highest amount of sub-national debt in the entire world and they keep adding more every day as well.

 

Most of SE Asia, Australia and New Zealand have the virus beat and their economies are opening again. Europe and the US are restarting theirs. The lack of leadership we are seeing in Canada is amazing.



#37 Mike K.

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Posted 23 April 2020 - 11:57 AM

15% of hotels won’t be re-opening in Canada, according to a source with ties to the industry. And that’s based solely on what’s already happened, not what’s going to happen as this keeps dragging on.

We might actually see many of those rooms converted to social housing as owners walk away from the industry.

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#38 Victoria Watcher

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Posted 23 April 2020 - 12:02 PM

they could just lay off staff and on the last day staff could choose their own room now that they are on welfare.

#39 LJ

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Posted 23 April 2020 - 07:42 PM

some landlords will take something rather than nothing though.  so you might get a cut to or deferral of your rent for a while.

I think most landlords will reduce rents, they know if they don't they won't get anything and there is no one else in the wings waiting to rent.


Life's a journey......so roll down the window and enjoy the breeze.

#40 spanky123

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Posted 23 April 2020 - 07:51 PM

I think most landlords will reduce rents, they know if they don't they won't get anything and there is no one else in the wings waiting to rent.

 

The problem for many landlords is knowing who needs help and who doesn't. The other issue is deferral or waiver. I know of some landlords who have waived the lease payment for 3 months but then extended the term for say 6 while others that have some hybrid model. The problem for lots of landlords is that they have a mortgage or two so no rent means no mortgage payment.



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