facebook pixal
Financing

Warning of a new crisis, the restaurant industry presses Congress again for more aid

Industry officials say the surge in COVID infections from the delta strain of coronavirus is already dampening traffic and raising the industry's vulnerability.
Photograph: Andrew Seaman

Armed with evidence the restaurant business is hurtling into another crisis, the industry’s political forces are amping up pressure on Congress to restart the federal aid program that channeled billions of dollars to small operators before running out of funds.

In a letter to Congressional leadership, the National Restaurant Association and its state affiliates implored lawmakers to act on new indications the industry’s recovery is faltering. The communication cites findings that 19% of consumers have already stopped going to restaurants because of fears roused by the greater transmissibility of the delta strain of coronavirus.

It also notes that 9% of restaurant patrons have recently canceled already-set plans to dine out.

“For an industry that requires a ‘full house’ every evening to make a profit, this is a dangerous trend,” Sean Kennedy, the National Restaurant Association’s EVP of public affairs, writes in the letter.

“This development comes on top of food and labor costs that are increasing at their fastest pace in several years, continued indoor capacity limits in 11 states, and crushing long-term debt loads for countless restaurant owners,” Kennedy says.

The communication urges party leaders in both chambers of Congress to protect the industry by allocating funds for the Restaurant Revitalization Fund (RRF), the $28.6 billion aid pool that was depleted in about three weeks. Congress had intended the program to run for far longer, but demand for direct aid proved stronger than expected.  

Under the program, restaurant operators could apply for grants of up to $5 million per location, to a maximum of $10 million.

The restaurant association notes that 177,000 applications are technically still pending. The aid program’s administrator, the Small Business Administration, has said that those requests will remain in limbo if more money isn’t allocated.

Several bipartisan proposals to refund the RRF have been introduced, but none have found traction. Beltway insiders say Congress is loathe to restart a multi-billion-dollar program to aid an industry that suddenly seems to be humming, a beneficiary of pent-up demand and the relief governments have provided to consumers.

The letter sent Tuesday morning aims to counter that impression.  “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,” it reads.

The senders include all 49 state restaurant associations and the trade group that repesents restaurants in Puerto Rico.

Want breaking news at your fingertips?

Get today’s need-to-know restaurant industry intelligence. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand.

Trending

More from our partners