Chill Threatens Outdoor Dining, and With It the U.S. Recovery

Shaniqua Juliano

(Bloomberg) — Load Error A big chill is coming for U.S. businesses that survived Covid-19 by operating outdoors — and it spells bad news for an already faltering economic recovery. Many restaurants, in particular, have stayed afloat in the pandemic because they had seating in gardens or patios — reassuring […]

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A big chill is coming for U.S. businesses that survived Covid-19 by operating outdoors — and it spells bad news for an already faltering economic recovery.

Many restaurants, in particular, have stayed afloat in the pandemic because they had seating in gardens or patios — reassuring customers who worried about indoor transmission of the virus. Their survival act is about to get harder, adding to concerns over an economy that may not get another dose of fiscal stimulus until next year.

One reason for the economy’s resilience so far is that “it’s been warm and you can have a lot of outdoor activities,” Chicago Fed President Charles Evans said in a Yahoo! Finance interview published Friday. “It’s going to start getting colder, and it’s going to be indoor weather, and that’s going to be even more challenging for the spread of the virus.”

U.S. restaurants and bars employed some 10 million people in September, after recouping almost two-thirds of this year’s job losses. The industry accounted for 30% of hiring that month, making it one of the key labor-market drivers.

“Consumer demand for eating out may dwindle come winter simply because of the nature of the virus, which could spark another round of layoffs in the restaurant industry,” said AnnElizabeth Konkel, an economist at jobs website Indeed.

That would likely have ripple effects in other sectors too, from food suppliers to trucking, adding to the economic impact. Analysts already expect fourth-quarter growth to slow sharply following what was probably a record bounce-back in the third quarter.

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Halfway Back

Read more: Bloomberg Economics on what history says about today’s recovery

Americans were spending almost $70 billion a month on dining out before lockdowns kept people home and forced many businesses to close. In the industry’s rebound since then, gardens, decks and patios have played a key role.

Indoor seating is still restricted in much of the country — and customers are in any case reluctant to sit down in closed spaces. A survey in late August by the National Restaurant Association found that 44% of daily sales at full-service restaurants were coming from outdoor dining.

“That’s huge,” says Mike Whatley, vice president of state and local affairs at the National Restaurant Association. And it’s going to be hard to maintain, he says. “It doesn’t matter if you’re in the Southeast or the Northeast. The season is going to change, and it’s going to become more challenging.”

The return of cold weather may also accelerate the spread of the coronavirus itself, medical officials have warned.

Read More: Warning Signs Flash Ahead of Covid’s Second Winter

‘General Hesitancy’

In the restaurant industry, local authorities are backing efforts to keep the outdoors option alive for as long as possible.

New York, where indoor dining resumed on Sept. 30 with a maximum of 25% capacity, will extend its coronavirus rules — allowing more sidewalk tables and outdoor heaters — to last the whole year.

Read More: NYC to Let Restaurants Keep Sidewalk Dining All Year

Chicago is running a design competition for creative ways to shelter diners, with a modular greenhouse among the most popular entries.

Washington is offering $6,000 grants for restaurants to “winterize” their outdoor spaces, by buying anything from awnings to heaters to blankets. “Most restaurants are trying to find ways to extend this as long as possible,” says Neil Albert, president of the Downtown DC Business Improvement District. “There’s a general hesitancy among the public to dine indoors.”

It’s not just in the food industry where summer made Covid work-arounds easier. Gyms, schools and churches are among other establishments that moved some activities outdoors.

For Rendy Mao, general manager of Event Rentals DC, it’s meant a change in customer profile. Over the summer, Mao says, he’d usually be renting his marquee tents and outdoor heating gear to festival operators — but this year it was restaurants or school districts.

“People seem like they’re trying to make the best of the situation, and turn any available outdoor space into an area where they can hopefully generate profits,” he said.

Will They Come?

That’s about to get harder because of the costs of keeping outdoor spaces hospitable in fall and winter.

In Boston, where the cold arrives early, Haley Fortier owns a small downtown wine bar called haley.henry. Usually, most of her customers sit at the bar. That wasn’t allowed at all during the pandemic, until local rules were eased on Sept. 28 — and even now she can only have about eight customers in a space that usually fits 30.

Fortier was able to open a patio with six tables outside, almost equaling her indoor capacity. But now, as the weather turns, she’ll need to invest in things like wind barriers or outdoor heaters to keep it going. And that’s left her agonizing over a dilemma that she says is shared by many restaurant owners she knows.

“How much money do you want to sink into an outside space that you actually don’t know if people will come to?” Fortier said. “Even if it’s comfortable, even if it’s warm, even if it’s closed. I think it’s really about mentality.”

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