Gov. John Bel Edwards on Monday announced plans to shut down casinos, bars and theaters and restrict restaurants to take-out service. Gatherings of 50 people or more are banned.
The rules are effective at midnight through April 13, at which point they may be extended.
New Orleans Public Radio spoke to local restaurateur Nick Detrich, owner of Manolito and Jewel of the South and former owner of Cane and Table, about the impact of coronavirus on small business owners and hospitality workers, and about trying to keep his restaurants’ sense of community strong amid crisis.
Betsy Shepherd: What’s your reaction to the news that the governor is shutting down bars and restricting restaurant service?
Nick Detrich: I’m glad that some action is being taken. I think it’s necessary based on what we know about COVID-19 and its spread. It’s really hard for restaurants to continue to operate during this pandemic, but it’s even more difficult to not have any direction. So any direction right now is a good thing. I do wish there was more information out there than just curtailing service, including more details about what I should be doing for hourly workers, my salaried employees and my staff. It’s a trying time for everybody, but it’s an especially trying time for hospitality workers now.
In terms of getting more guidance from city or state officials, what would be helpful to you as a small business owner?
Part of the packages that have come through have talked about payroll credits that will be offered down the line. If you are a business that runs at paper-thin margins and where cash flow is key, a lot of those benefits would not be able to be recouped. So we need payroll taxes being lifted and supplemental resources for our staff. We need interventionist measures now, not measures that kick in down the line.
If the state is mandating these closures, does it make it easier for employees to apply for unemployment benefits? What about businesses — will it be easier to apply for relief?
Yes. What it essentially does is trigger restaurants and bars to lay people off. That’s what will happen if there are no other social aid packages or unemployment packages. The Louisiana Workforce Commission did say that they were going to do partial unemployment packages for service industry people who had their hours curtailed a great deal, which is great. But for people being furloughed, I as a business owner have to make a decision about what we can pay someone and what they would get if I laid them off and make a decision based on that figure. If you are a server or a bartender or a line cook, you do now qualify for some government help from Louisiana Workforce if I cut your hours. But you would qualify for more if I would lay you off. So it’s going to trigger massive layoffs in the hospitality sector, which it remains to be seen if this is going to be a good or a bad thing, depending on the length of the epidemic and the shutdowns. At this point, it is some amount of direction for us, which is better than what it was yesterday.
What kind of position does this put your restaurant in? What are your anticipated losses?
That’s a hard thing to say. We are trying to stay open and take care of as many staff members as we can. We will hemorrhage cash doing that because we will still have to pay insurance, rent, and all of that overhead while our revenue is diminished to 90 percent loss. If we’re take-out only, we’re hoping for 10 percent of what we were taking in, so at a minimum, it will be a 90 percent loss of revenue.
I think that we need to look out for the hospitality workers. I would rather more money go to them in the form of unemployment benefits than in bailouts to restaurants. At this time it’s very likely 20 to 40 percent of restaurants will not be able to bounce back from this. The way that the 2008 financial crisis impacted realtors, hospitality workers are going to be affected by this crisis. And so it’s very likely that the sector won’t rebound very well. In light of that, it’s more important to take care of the people that work in the industry.
What kind of conversations have you been having with your employees?
Throughout this crisis, I’ve tried to be as open and as candid with our staff as possible. Across the U.S., and especially in New Orleans, restaurants are community centers, so whatever decisions I make are going to ripple out and affect the staff and our community. We’ve diverted a lot of resources in house to best serve the staff, whether or not that means keeping them onboard or helping them find governmental unemployment resources. Our first priority has become mitigating their losses and making sure they’re not put out on the streets.
Do any of your insurance policies cover a catastrophe like this?
As of now, I have not found any insurance policy coverage. It might trigger some business interruption coverage, but it’s very difficult to say. This is a one in a 75-year event, and so no one is prepared for it and I think it’s going to take more time and back and forth with insurance companies before we figure out what if anything is going to be available to us.
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