North Carolina restaurant and accommodation group seeks hospitality boost
The North Carolina Restaurant and Lodging Association is calling on state lawmakers to adopt new relief measures to stem the heavy financial and job losses suffered by the state’s hospitality industry.
Among the proposals are a $ 300 million stimulus package, license waivers and tax exemptions for businesses – measures to help the industry recover more quickly from COVID-19 struggles.
“At the end of 2020, we began to examine and analyze the effects of COVID on our industry, and what we found was astounding,” NCRLA President Lynn Minges said in a telephone interview. . “What has become clear, our industry has suffered greatly from the pandemic and relief has not come.”
The first marker most North Carolinians have felt of the COVID-19 pandemic was the March 2020 shutdown of many state-owned enterprises, including dining rooms and restaurant bars. As restaurants have moved into largely take-out businesses, thousands of workers have been made redundant.
“These are not lasting losses”
According to data from the United States Bureau of Labor, North Carolina lost about half of its leisure and hospitality workers between March and April of last year, from 512,000 to 266,000. ended the year with 418,000 workers, a 20% reduction from the previous year, and according to the NCRLA, three-quarters of all jobs lost during the pandemic.
“These are not lasting losses,” Minges said. “We are going to lose hotels, we are going to lose restaurants, we are going – and have already – lost bars. It goes hand in hand with the character and attractiveness of our state and the reasons people travel here. “
In a proposal to Governor Roy Cooper and state lawmakers, the NCRLA is calling for a $ 300 million raise for hotels, restaurants and bars. In the plan presented by the group, funds would be capped at $ 500,000 per company, and companies would have to demonstrate a decrease of at least 15% in their activity compared to the previous year.
Similar to the Federal Paycheque Protection Program loan, the proposed stimulus money could be spent on rent or mortgage interest, salaries, property taxes and other operating expenses, but not the accumulated debt. during the pandemic.
Coming to the figure of $ 300 million, Minges said he accounted for 10% of the $ 3.1 billion losses still unmatched by two rounds of PPP loans and other relief programs.
Other proposals include relinquishing ABC permits for at least a year, reassessing commercial properties to account for COVID-related losses, tax deductibility of PPP funds, exemption from sales taxes for personal protective equipment. , flexibility for the payment of property tax and tourist expenses.
Minges suggested that North Carolina dip into its savings reserve fund, or rainy day fund, to help pay for these measures. According to the latest State General Fund report from December, this fund stands at just over $ 1 billion, but is $ 46 million less than the previous year.
“Our industry needs a stimulus program now,” Minges said. “They are out of money and need help now. There is a healthy fund for rainy days in the state. If it has already rained, now is the time.
The recovery of restaurants will be difficult
Currently, restaurants in North Carolina remain at 50% capacity and bars are limited to 30% outdoor seating. Minges said the impact of the pandemic will likely take years for companies to get out of it.
“I think the road back is going to be tough,” Minges said. “We envision a long and prolonged recovery. These companies have taken on so much debt just to stay open. Even when they are able to reopen at 100% capacity, which we have no idea when they will, they will not only need to generate revenue to cover operational costs, but they will also need to generate new revenue. to pay off the debt.
Like the rest of the country, North Carolina is in the middle of a vaccine rollout, but only a fraction of the population has received a dose. The combination of vaccinations and capacity increases is the only way a recovery can begin, she said.
“There are so many uncertainties,” Minges said about when restaurants might start to recover. “We are encouraged by the vaccine, but the recovery depends on the virus, it depends on when the capacity restrictions are lifted and when people are comfortable congregating in restaurants again. “