Restaurant and hotel layoffs are soaring again, outpacing every other industry
“It’s been 10 months but I’m still shocked, disheartened, devastated,” Slater said. “I’ve gone through…
“It’s been 10 months but I’m still shocked, disheartened, devastated,” Slater said. “I’ve gone through my savings, I’ve gone through my resources — all of that is depleted now. The bills are piling up and my kids are looking to me for answers I can’t provide.”
The coronavirus pandemic has ravaged the hospitality, travel and retail industries since its outset in March, when shutdowns and restrictions meant to contain the virus cost more than 520,000 U.S. service workers their jobs.
This workforce is under renewed pressure amid a resurgence in coronavirus cases: 498,000 leisure and hospitality jobs disappeared last month, the Labor Department reported Friday. Restaurant and bar workers made up the bulk of those losses, roughly 3 in 4, an onslaught that disproportionately affected women and workers of color. Overall employment in the sector has fallen 23 percent during the pandemic, outpacing every other industry, federal data shows.
With new rounds of state-mandated restaurant and bar restrictions, and winter weather limiting outdoor dining, food services accounted for 372,000 job losses in December. That backslide obliterated significant hiring gains in industries like professional services, retail and construction, and the United States recorded a net loss of 140,000 jobs in December — its first negative showing since April.
“A lot of these places were only just holding on, and a lot of people were crossing their fingers and hoping for the best,” said Martha Gimbel, a labor economist and senior manager of economic research at Schmidt Futures. “But December was an important reminder that there are industries that will not be recovering until this public health crisis is over.”
The $900 billion pandemic relief package Congress approved in December restarts the Paycheck Protection Program (PPP) of loans to small businesses, with employee retention incentives and loan forgiveness for small restaurants. Nonetheless, many industry experts say restaurants, bars, hotels and tourism businesses remain at risk of permanent closure.
Some 110,000 restaurants and bars — more than 1 in 6 across the country — have gone under since March.
Sen. Charles E. Schumer, the incoming majority leader, has pushed bipartisan legislation known as the Restaurants Act, which would provide $120 billion to eateries nationwide. President-elect Joe Biden also has advocated for direct relief to restaurants.
“We need to do much more for restaurants,” Schumer (D-N.Y.) told the Senate in December.
For a half-million restaurant and hospitality workers, aid may come too late. They have been unemployed, reemployed and unemployed again. They have cobbled together piecemeal work and toggled between serving only to-go customers, serving at 50 percent capacity, then at 25 percent capacity and then back to no indoor dining, with rules often varying from town to town.
“We’ve pivoted so many times we’ve made a circle,” said Eric Cook, chef-owner of Gris-Gris in New Orleans. “We’re like a million termites on a bridge holding hands.”
‘It’s been rough’
Malcolm Garrett, a line cook at a casino steakhouse in New Orleans, lost his job the day before Thanksgiving.
Garrett, who had been furloughed early in the pandemic, went back to work at Harrah’s New Orleans Hotel & Casino in June. But with occupancy capped at 25 percent and locals still skittish about venturing out, business fell drastically. He fired up about 80 steaks on the busiest nights, down from 230 before the pandemic.
“It’s been rough,” said Garrett, who bought a house with his girlfriend in August. “Now, it’s been over a month and I’m still looking for a job.”
Garrett filed for unemployment benefits in November but is still waiting on money to arrive. In the meantime, he’s been interviewing for jobs but says it’s been hard because many chains are rapidly closing locations.
“I hope my unemployment comes through before I get really desperate,” he said. “This pandemic is really thinning out the amount of work I can find.”
Nearly 4 million leisure and hospitality jobs have been lost since February, a staggering blow to an industry that once had 15 million employees, economists said.
“Workers have already gone through this incredibly unstable 2020 experience — even if they kept their jobs or got their jobs back, they may have just lost them again,” said Gimbel, the economist. “It’s incredibly destabilizing.”
The hemorrhaging of service-sector jobs, she added, has also had ripple effects for unemployed workers from all sectors who might have otherwise taken jobs at restaurants, bars or entertainment venues to make ends meet. The number of leisure and hospitality job openings has also fallen markedly — down 17 percent in November from a year earlier — according to data released Tuesday by the Labor Department. “All of these industries are interconnected,” she said.
After a friend died of covid-19 early in the pandemic, Timothy Carl made himself a promise: He was going to live his best life. He left Rochester, N.Y., for Southern California and took a job as an assistant innkeeper and chef at the Palm Springs Rendezvous, an 11-room bed-and-breakfast known for its retro flair.
He made $15 an hour and good tips cooking three-course breakfasts for a steady stream of guests before business dried up. He lost his job on Dec. 1, days before Gov. Gavin Newsom (D) issued a stay-at-home order that prohibited hotel bookings for tourism and other nonessential reasons. The property is now up for sale.
“I’ve gone through my savings and I am as broke as a joke,” said Carl, who is more than $3,000 behind on rent. “The whole month of December felt like the darkest time of my life. I haven’t made money in a month and, to be honest, I don’t know when I will again.”
Beast was the kind of restaurant Portland, Ore., was famous for: culinarily ambitious but still casual and inviting. Bambi Stenberg, 44, served a six-course tasting menu four nights a week to diners along two communal tables.
When the pandemic hit, her James Beard award-winning boss, Naomi Pomeroy, was decisive, closing the restaurant a day before the governor mandated it in March. Stenberg got on unemployment right away, each check about half of what she would have made at the restaurant. It lasted until September, then partial unemployment after that ran out in December.
“At first, me and my team from Beast did Zoom calls, but those tapered off,” she said. “I thought I would have read a huge stack of books by now, but the level of stress prevalent for a year has prevented me from focusing.”
Having worked in high-end restaurants for the past 15 years, she worries what the dining landscape will look like when this is all over: “So many exciting restaurant groups have shuttered entirely.” Beast is permanently closed, with Pomeroy turning to a new retail takeout meal concept.
“Restaurants need a relief bill, some kind of influx of support to keep the lights on,” Stenberg said, “otherwise the Portland food scene will disappear.”
For cities such as Las Vegas, Orlando and New Orleans, tourism and hospitality are economic drivers that fuel the entire state.
“In New Orleans we only have food, music, culture. It’s what keeps this city alive, and what feeds the state,” said Cook of Gris-Gris. His restaurant closed for months, reopened for takeout, closed again and has operated as a private party space.
“This past year, we gave up our lives and we’re now right back where we were,” he says, pointing to robust holiday air travel and the unrestricted reopening of other kinds of businesses in recent months that led to an explosion in coronavirus infection numbers. New Orleans returned to “modified Phase 1” restrictions on Friday, with restaurants back to 25 percent capacity.
“It’s a sin tax; we’re being punished,” he said. “We haven’t done anything wrong and we’re still the target. It’s the biggest misdirection of blame I’ve ever seen in my life.”
‘Like a ghost town’
In Tampa, Michelle Cooper breathed a sigh of relief when Walt Disney World called her back to work in the reservations department in late May, after more than two months on furlough. She worked from home through early October, then was laid off from the $15-an-hour position.
Since then, the 51-year-old says, it’s been difficult to find remote work in a state that relies heavily on tourism. Cooper, whose asthma makes her more vulnerable to the coronavirus, says she worries about taking an office or retail job that would put her in close contact with others. For now, she has enough in savings to keep her family afloat but worries about what might happen in another month or two. Florida unemployment benefits max out at $275 a week, which she says won’t cover her monthly rent.
“I’ve never made a ton of money anyway, but it’s definitely more difficult now,” said Cooper, whose 20-year-old son recently moved back in with her after losing his job at Busch Gardens. “We’re buying less food because we have to be careful about what we spend.”
After months of uncertainty, some service workers say they’re considering leaving the industry altogether. Michael Matsuse-Panzo, who was furloughed in April from his front-desk job at a hotel on Oahu, says he’s been contemplating moving to the East Coast or looking for a new line of work if tourism doesn’t return to the island soon.
“We’re so used to seeing the hustle and bustle of tourists, but now it’s like a ghost town,” the 31-year-old Hawaii native said. “You go to Waikiki [Beach] and there are no cars, no people. It’s almost frightening.”
Matsuse-Panzo’s unemployment benefits lapsed a few days after Christmas. He received his $600 stimulus check soon after, which he used to buy groceries and pay down credit card bills.
“I’m going to ride it out the next few months and see what happens,” he said. “But a lot of places still have a hiring freeze. There’s no way to get your foot in the door. When you’ve worked in the hospitality industry for 10 years, it’s hard to move on to the unknown of something different.”
Nothing but dead ends
For many Americans, restaurant and hospitality work offers first-job, entry-level employment for young adults, students and those still “figuring things out.” But for others, it’s a lifelong career path, says Matt Duggan, who in November lost his position as general manager for the high-end Lucques Group in Los Angeles. It’s a path that, after 31 years in the business, now feels like nothing but dead ends.
His restaurant group had three restaurants at the start of the pandemic, as well as the contract for food service at the Hollywood Bowl. In the spring, the company closed two of the restaurants, leaving one empty and selling the building of the other, and keeping A.O.C. as its last stand. Their workforce shriveled from 500 to a half-dozen, Duggan among them.
“We kept thinking, ‘Just a little bit more,’ but that light at the end of the tunnel hasn’t gotten any closer,” he said. The group put money into building outdoor dining space, then outdoor dining got shut down again. He lost his job just before Thanksgiving.
Extended unemployment benefits were set to expire at the end of the year. The most recent relief package extends the programs, but by less than three months. That’s not much time to find new work in the industry, especially if operating restrictions persist.
“Things are financially pretty grim for me right now,” Duggan said. “Is there any other job where I could take my restaurant skills? Do I take a chance and move to another state where I can do restaurant work? The overall impact and duration of the crisis means that even places that haven’t had as many restrictions are going out of business.”
Duggan is doing tai chi at the house, trying to reconnect with family and friends. This Christmas, he and his wife put up every holiday decoration they own. They haven’t taken them down. Every night, they light every light.