Nfld. & Labrador

N.L. restaurants trying to hold on as the pandemic decimates their busiest season

New data collected by Hospitality Newfoundland and Labrador shows spending has been way down in restaurants across the province, despite the staycation push.

New numbers from hospitality association show sales were cut by more than half as COVID-19 settled in

Michelle LeBlanc, co-owner of Chinched Restaurant and Deli, says her business relies heavily on the tourism season to make it through the fall and into Christmas. (Ted Dillon/CBC)

New data on restaurant spending across Newfoundland and Labrador paints a bleak portrait of a struggling industry, showing the push to staycation and support local businesses has come up short.

The numbers, collected by Hospitality Newfoundland and Labrador, come as the hospitality and tourism industries continue to worry about the future as they head into the slim fall and winter months.

According to the data, in 2019, the average restaurant in the province had monthly sales of $70,000 to $80,000. As of April, that had dropped to about $30,000 per month, rebounding to about $50,000, according to HNL.     

The loss in revenue translates into a loss in jobs, as businesses continue to feel the squeeze of the ongoing pandemic. That's meant making tough decisions for restaurants that have attempted to cope with reduced seating capacities and without an influx of summer tourists.

"It was definitely a different summer than what we're used to. It was hard to know exactly how it was going to roll out and what was going to happen," Michelle LeBlanc, co-owner of Chinched Restaurant and Deli in St. John's, told CBC News. 

LeBlanc said she downsized staff and shaved operating hours to keep her business going.

"Without the tourism season, we've found that we weren't getting the volume [of customers] on a five- or six-day-a-week basis. So we've trimmed back a little bit and tried to offer our staff as many hours as possible, with the small staff we do have."

LeBlanc said her restaurant relies on tourism for about 60 to 70 per cent of its total business. 

Restaurant sales across the province dropped from about $80,000 monthly over 2019 to roughly $30,000 in April of this year. (CBC)

There were nearly 17,000 jobs in Newfoundland and Labrador's restaurant industry in 2019, accounting for 7.4 per cent of the province's total workforce, according to HNL.

But that statistic took a deep cut between February and April this year, as the food service industry and the accommodation industry witnessed the loss of 5,200 jobs combined.

Holding on tight

HNL's data stated 68 per cent of full-service restaurants were operating at a loss across Canada as of the end of June.

Of those, seven per cent expect a return to profitability in the next three to six months, while a third expect a return to profitability in seven to 12 months.

Hospitality Newfoundland and Labrador chair Steve Denty says the tourism industry cannot survive on resident-only business. (Ted Dillon/CBC)

"It's definitely frightening," said LeBlanc.

"The section of the year that we did lose is the time of the year when we generally have the bulk of our revenue. That's kind of what gets you through to until Christmas, and then the Christmas season and New Year's gets you through the winter." Then you hold on until spring and summer when the tourist season begins to start up agian.

"Basically we're all kind of holding our breath and hoping that next summer works itself out and that we do have a bit of a tourism season to bring back that bulk of business back to our businesses. But it's kind of a roll of the dice."

Spin off of the worst kind

Steve Denty, chair of Hospitality Newfoundland and Labrador, told CBC News other industries will begin to feel the ripple effect from the hospitality sector's struggle. 

"There's food suppliers, and other grocery outlets and stuff that are affected by the downturn all this. It's all cyclical. It's not just about tourism and hospitality," he said. 

"This industry has been disproportionately hit by COVID, and impacted greatly."

Denty said he hopes the industry can just survive for the rest of the year and look to rebound in 2021. He added he continues to hope that the industry, along with the government, can develop a strategy for opening the province to the rest of Canada safely and responsible. 

"I think we need to be at the table having these conversations, to come up with creative and bold solutions and looking at solutions for opening gradually and safely," he said.

"While we certainly appreciate local residents who got out and explored, and spent money in their own backyard — it was a welcome injection of funds when we needed it — we just can't survive with only resident travel. This province relies greatly on out-of-province visitation, and the economy as a whole needs that injection."

Read more from CBC Newfoundland and Labrador

With files from Heather Gillis


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