In some states, restaurant traffic has blown by pre-pandemic levels, prompting industry experts to draw parallels between now and the Roaring ‘20s, which followed the 1918 influenza pandemic, bringing boom times for restaurants and other parts of the hospitality industry.
The weather is getting better, vaccination numbers are rising and dining restrictions are slowly being lifted, all of which has helped to push the industry toward a surprising resurgence. The demand is also playing a role in shortages of restaurant workers across the country.
Spring is ordinarily a strong part of the year, with Mother’s Day being one of the year’s single busiest days, said Devon Wright, general manager of Yelp Restaurants. But this surge is anomalous, he says, more a reflection that “people have been cooped up and they want to get out.”
“States that had restrictions on dine-in service have seen really big booms, like Texas,” he said. “Their numbers year over year are really impressive. And then there are states like Florida that had fewer restrictions for a long time.”
While metro areas such as Los Angeles, New York and San Francisco have historically been where diner numbers are highest, this spring’s growth has been strongest in second-tier cities, which Wright suggests could be related to migration away from the biggest, most-expensive cities.
Total U.S. restaurant traffic is 16.3 percent below its pre-pandemic level in the week ending Tuesday, but it is rising fast, according to OpenTable. It recently reached its highest seven-day average nationally since the pandemic closures began. And among restaurants that have reopened from the crisis, things look even better — they’re nearly back to their pre-covid levels.
Restaurant traffic in Oklahoma, Nevada, Rhode Island, Florida, Connecticut, Texas, Maine and Indiana has completely recovered from the pandemic, OpenTable data shows. In many states, the pre-pandemic size of the restaurant industry doesn’t seem to be a limiting factor: They’re blowing right past “recovered” levels and into “growing,” with little indication of slowing. Five cities in Florida and three in Texas are well above their traffic before the pandemic, while other cities, including Seattle, San Francisco and Portland, Ore., languish.
Although pent-up demand for goods usually unleashes a spending spree, pent-up demand for services is less clear when signs of recovery emerge and opportunities rise. It’s unlikely that Americans will rush to make up all the restaurant meals missed in the past 14 months.
But after a year of buying mostly consumer goods, from toasters to Teslas, folks may be ready to go on a bit of a services spree, said Harvard University economist Jason Furman, chair of the White House Council of Economic Advisers under President Barack Obama.
“There is money available for services,” Furman said, noting that although millions still struggle, many Americans have been stockpiling cash and waiting for lockdowns to end. “I think everyone’s as excited to start eating out more as I am. And, you know, most people can afford it.”
This surge in consumer spending has been partially responsible for the well-documented staffing crisis in the hospitality industry. Restaurants have not been able to hire workers at the rate needed to meet the consumer demand.
Job openings in the hotel and restaurant sectors have climbed rapidly since January, according to the Bureau of Labor Statistics, and in March they hit their highest rate since the gathering of such data began in the 2000 — about 7.7 percent of industry employment and openings, or 993,000 openings, after adjusting for seasonality.
Another contributor to worker shortages could be the number of new restaurants opening across the country — 6,000 in April alone, according to Wright. Even more surprising, Yelp tracked 18,000 restaurant reopenings in April.
Many restaurants that were listed as defunct have crept back out of hibernation this spring, according to Hudson Riehle, senior vice president for research at the National Restaurant Association. The association’s April 2021 survey shows some 90,000 restaurants have closed permanently, down from a 2020 estimate that 110,000 restaurants would close for the long term.
Many industry analysts wonder what this surge in restaurant-going will do to digital ordering, which was a lifeline for struggling restaurants during the pandemic. According to market research firm NPD Group, at the end of March 2021, a full year since the start of the pandemic, restaurant delivery orders had grown by more than 124 percent from the volume in March 2020. Digital orders for takeout had increased by more than 130 percent, and digital orders for delivery grew by more than 140 percent in the period compared to year ago.
“It’s unlikely that digital ordering will grow at the same pace it has during the pandemic, once restaurants fully open, but it’s table stakes for restaurants now,” said David Portalatin, NPD food industry adviser.
One reason that restaurant numbers could be booming is that many restaurants can now seat more people, said Lilly Jan, a lecturer on food and beverage management at the School of Hotel Administration at Cornell SC Johnson College of Business. Restaurants that had no outdoor space before the pandemic built elaborate and expansive patios and sheltered outdoor dining rooms this past year by annexing sidewalks and parking lots to provide socially distanced seating. As restrictions on indoor dining are lifted, many restaurants’ total seating is dramatically expanded.
And then there’s how long diners spend eating.
“There’s a little bit of people not wanting to linger, so turn times have changed. It depends on the average check: The higher the check, the longer people will stay,” Jan said. The quicker the tables turn, the more people can be accommodated each day.
Jan says many restaurant deals fell through during the pandemic, and with rents low and spaces available, entrepreneurs have chosen this time to jump into the industry — thus the uptick in the number of new restaurants. And as for why diner enthusiasm has surged, she likens it to the spike in business that new restaurants enjoy. It is novelty and buzz.
“This spike will last a little bit longer than a regular restaurant opening,” she said. “We’re going to continue to see those increases in sales, but with cold weather, we will see a leveling off.”