We don’t have a mañanita tradition in our family. During birthdays, our choices for family celebrations – if I’m in no mood to cook at home, that is – boil down to two: all-you-can-eat at the Viking buffet chain or at one of the hotels, or, being Tsinoy, pigging out on a Chinese lauriat.
In this pandemic, the next time we may be able to sit down anywhere to stuff our faces outside our home could be during the Christmas season… in 2021.
Being a foodie, it’s particularly heartbreaking for me to see the economic tsunami that is devastating the restaurant and food service industry. From the janitors to the waiters, cooks and chefs, bartenders, managers and owners, everyone is hurting.
Andrew Masigan, CEO of Advent Manila Hospitality Group Inc. that operates 31 fine and casual dining restaurants, told “The Chiefs” Wednesday night on One News / TV 5 that with the pandemic uncertainty, he expected many of the country’s 16,300 restaurants to shut down permanently.
Even before the easing of quarantine measures, Andy said he had already started cutting jobs, much as it pained him, as he was forced to downscale operations.
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“The situation is really dire. We’re all facing an existential crisis. We’re living day by day. It’s been a very difficult two months,” he told us.
Only three of his restaurants are operating, with another 10 projected to reopen by June 1, mainly for delivery and take-out.
The Resto Coach founder Rommel Ng, who also faced The Chiefs, told us that dine-in patrons account for 70 to 80 percent of restaurant revenue. His Buffalo’s Wings N’ Things chain has 25 branches in operation so far, going up to 30 by today. But the food delivery services and aggregators charge steep commissions, he noted, adding to their costs.
Rommel is hoping that the delivery service providers would “do their share” to help food businesses survive by reviewing their rates. “The hardest part is revenue generation,” he told us.
Rent eats up about 15 percent of gross sales, and labor costs from 20 to 23 percent. Andy says his restaurants typically employ about 80 people each.
Companies cannot hang on to employees whose services are expected to be “frivolous” for at least the next six months, he pointed out, such as waiters and bar attendants.
“The painful truth is we really have been laying off people” by as much as 50 percent, Andy said. “I think government should really think about not disallowing the dine-in aspect of our business.”
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His appeal deserves consideration; physical distancing appears possible for dine-in. We’ve seen images from other countries where dine-in establishments have reopened, with mock dinosaurs and pandas placed on seats to enforce distancing. A Michelin-starred restaurant in the US is using mannequins.
Still, even if dining in is eventually allowed, physical distancing rules will likely cut the number of customers by at least half. This could be unsustainable especially for those in high-rent areas. Andy said they would be lucky if they could break even.
Even the major fast-food chains have been hit by the ban on dine-in. Fewer people are ordering beverages and complete meals with rice. Near my home, a stand-alone outlet of one of the top fast-food chains has informed its regular patrons that it would be shutting down for good.
Rommel and Andy said they had to streamline their menus. From 30 items, for example, Andy’s chain is down to a “bare bones” menu of about six to nine because there are fewer people preparing the food.
“We really have to cut costs in order to survive,” he stressed.
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The two men are hoping that the government would consult industry players, many of whom run small enterprises, in matters affecting their businesses.
As of the latest study taken in 2017, Andy said, the country had 11,400 dine-in restaurants and cafeterias. Quick take-out kiosks, meanwhile, numbered only 3,700.
He estimates that the dine-in sector employs 490,000 Filipinos. “That’s two percent of the (national) workforce,” he noted.
Rommel, whose group engages in mentoring food entrepreneurs, stresses that in the absence of a vaccine or cure for COVID-19, “the safe bet is not to assume that there will be dine-in transactions… your business model should work without dine-in.”
Andy muttered, “Unfortunately, that means massive cost cutting.”
Rommel points out that dining establishments provide essential services during the pandemic – by decongesting supermarkets, decentralizing food distribution, providing food access and convenience, and of course providing employment.
He noted that with sufficient support, the sector could absorb the influx of overseas Filipino workers now returning after losing their jobs abroad because of the economic impact of the pandemic.
Rommel is hoping that industry players big and small would organize themselves to discuss best practices for survival and to have a voice in policy making amid the COVID-19 crisis.
“It’s very important for us now to move from competition to collaboration” before industry players approach the government for help, Rommel stresses. “I wish people from the industry would be consulted before policies are made.”
Without a lifeline, Andy believes that only those with a strong cash flow will survive this crisis, and “easily 50 percent of restaurants will close.”
From 16,300 restaurants pre-COVID, he says, “we’ll be lucky to be left with 8,000 at the end of this, at the end of the tunnel.”
Now I’m really looking forward to devouring my next buffet meal. Even if it means being seated across a stuffed teddy bear.