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Restorer Danny Meyer on the necessity for incentives: "We can not rent folks once more if we exit of enterprise."

Famed restaurateur Danny Meyer told CNBC on Wednesday that the hospitality industry was in dire need of government aid due to the coronavirus pandemic, warning of significant economic damage without it.

"We cannot hire people again if we go out of business," said Meyer, "Closing Bell," a day after President Donald Trump ended the broader Covid-19 business negotiations "until after the elections." Trump later expressed support for smaller bills targeting the aviation industry, small businesses, and economic reviews for individual Americans.

Meyer, CEO of the Union Square Hospitality Group and founder of the Shake Shack burger chain, described the interruption of the support talks as a "devastating blow" for the restaurant operator. He said this is especially true when restaurants grapple with uncertainty over colder weather, complicating the outdoor pandemic lifeline.

"I think the country needs to understand that this is an industry with 600,070 members. We are too broad to fail," he said. "We're not like the auto industry or the aviation industry, where you can only hug a small handful of airlines."

Last week, a $ 2.2 trillion coronavirus aid package passed by the Democrat-run House of Representatives included the so-called RESTAURANTS bill, which gives independent restaurants $ 120 billion to cover wages, salaries and other operating expenses.

New York City restaurants will reopen for indoor use on September 30th at 25% capacity. According to restaurant mogul and CEO of Union Square Hospitality Group, Danny Meyer, "safety is the new hospitality".

Stephanie Keith | Getty Images

The restaurants faced major challenges during the health crisis. Many were forced to stop dining on-site in March as governors put restrictions in place to slow the transmission of the coronavirus. When restaurants reopened, they faced capacity constraints and other pandemic-related challenges that created difficulties in an already low-margin business.

As of Aug. 31, Yelp data showed that 32,109 restaurants in the U.S. had closed during the pandemic, 61% of which were classified as permanent. The other 39% were considered temporary.

In February, before Covid-19 changed daily life, 12.3 million people worked in restaurants or bars, seasonally adjusted, according to the Bureau of Labor Statistics. In April that number dropped to around 6.2 million. In September there were just under 10 million.

"They can't be stopped until the restaurants can reopen," said Meyer, whose New York facilities include the Union Square Cafe and the Gramercy Tavern.

He highlighted the role restaurants in cities and neighborhoods play as the U.S. economy tries to recover from the pandemic lows.

"We're part of the psychological and emotional fabric of communities, and restaurants have just heroically tried to hold onto that," he said.

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