Restaurant Reaction after the Shutdown

Govt. shutdown led to more drinking, less eating

Govt. shutdown led to more drinking, less eating

Breathe a sigh of relief – the federal government is open for business again. The restaurant reaction after the shutdown brings relief… to some degree.

Delaware North and Xanterra are both rejoicing. Those names may not ring a bell, but they are both concessionaires in some of the nation’s most popular national parks, including Yosemite, Grand Canyon, Yellowstone, and Zion. The shutdown brought operations to an effective screeching halt on Oct. 1.

Delaware North reported losing $6.2 million in revenue as of Oct. 11, with an estimated $600,000 lost during each additional day of the shutdown, according to the National Restaurant Association article, “Restaurants welcome end of shutdown.” Additionally, the company laid off approximately 3,000 employees in its national park operations. Unlike federal employees, retroactive pay is questionable and probably unlikely. According to Glen White, Delaware North spokesman, business bounced back quickly and bookings look strong for the remainder of the year.

Xanterra has re-opened restaurants and operations in all of the parks it serves that remain open year-round. According to a press release issued by the company, Andrew Todd, president and CEO, said, “Naturally, we are very pleased that we can welcome travelers from around the world back to our national parks and that our dedicated employees can get back to work. During this difficult period, I have been especially proud of the patience and dedication of our employees.”

The historic City Tavern in Philadelphia was also forced to close on Oct. 1. The restaurant is located inside Independence National Historical Park, and its operation falls under the National Park Service. However, it was able to re-open prior to the end of the shutdown and welcomed back 80 employees on Oct. 12 after the park service announced that parks could re-open if states agreed to pay the tab.

Washington D.C. Restaurant Reaction

At first, restaurants and bars in the nation’s capital saw a bit of a surge during the shutdown with federal workers taking advantage of unscheduled time off and presuming the shutdown would be short-lived. According to Kyle Reese, spokesman for Restaurant Association Metropolitan Washington (quoted in National Restaurant Association News), “The first four or five days, government workers were going out because it was kind of an unscheduled vacation. When they saw it was going to last longer, they tightened their belts a little.”

Foursquare.com noted a similar trend: There were similar numbers of “check-ins”; however, those were coming from upscale restaurants and bars rather than cafeterias and train stations. Small, inexpensive restaurants and coffee shops saw decline the first week. Expensive restaurants did not experience that decline until the second week of the shutdown when it became obvious it was going to stretch on longer than first anticipated.

Based on research by Avero, a restaurant software specialist, beverage gross sales were up 3.1% during the first week of the shutdown compared to September while food gross sales were down 3.6% compared to the same time period. More drinking, less eating. Foursquare.com research concurred with “check-ins” at bars increasing by 50 percent. Like the more expensive restaurants, bars returned to pre-shutdown levels and lower as the shutdown dragged on.

It’s too soon to tell what, if any, long-range impact there may be on restaurants and bars as a result of the shutdown, but one thing is certain – the restaurant reaction after the shutdown will likely be repeated in the new year when we might be facing the same situation again since the agreement to re-open the government and raise the debt ceiling is short-term.

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