Steamboat restaurants face uphill climb along road to recovery
STEAMBOAT SPRINGS — More than a month after reopening for business following the COVID-19 shutdown, restaurant owners in Steamboat Springs are coming to terms with the uphill battle they face if they hope to survive.
“Business models have had to adapt, and we have needed to adapt them instantly to bring on new ideas and new ways to make sales and to find new spaces in both restaurant and retail,” said Nick Sharp, president of the Steamboat Chapter of the Colorado Restaurant Association and director of operations for Rex’s Family of Restaurants. “A lot of folks, even at 110% of that effort and having done everything that they can, will still not make it. That is sort of the doom and gloom that will start to surface in six to 12 months as taking care of investors, rent and payrolls become a challenge to meet.”
Sharp spoke at Wednesday’s Routt County Board of Public Health meeting and reported numbers from a recent non-scientific survey of about 15 restaurants in the Steamboat area asking how they have fared since they were allowed to reopen.
In June, the restaurants with plenty of outdoor seating saw a 20% to 30% decrease in revenue compared to last year at this time. Restaurants that were only able to add a few outside seats saw revenue declines of 30% to 40% with guest counts for the month down between 25% and 50%. Restaurants also saw a 60% decrease in groups, meetings and events business.
Phil Armstrong owns The Periodic Table, Table 79, Aurum Steamboat and Aurum Breckenridge as part of Destination Hospitality restaurant group. In Steamboat, Aurum was off pace by 13%, and in Summit County, Aurum Breckenridge was off by 10%.
“The biggest shortfall that we’re seeing is basically not being able to do private events,” Armstrong said. “The a la carte business has actually been pretty strong.”
Armstrong said he has been lucky because he has large outdoor spaces and has seen people returning to his restaurants.
“When we were shut down, we didn’t know if anyone was going come back to restaurants, but the response has been great,” Armstrong said. “People are coming back, definitely to Aurum Steamboat and Periodic Table, so that’s a reason to be optimistic.”
But Armstrong said he’s cautiously optimistic, because many hurdles remain in the wake of a pandemic that has wreaked economic havoc across the country.
The need to say busy
“Since we’re in the summer season, it means that we’re still busy,” said Rex Brice who owns seven restaurants in Steamboat as part of Rex’s Family of Restaurants. “But we’re not as profitable as we normally would be, if we’re profitable at all. That has long-term effects, meaning that, come fall, restaurants won’t have the capital reserves that they normally would to get through the fall season when their cash flows negative.”
He said if restaurants are down 30% to 50% from last year, they will be forced to manage labor costs. At this time a year ago, Rex’s Family of Restaurants had 344 employees. This year, that number has fallen to 140.
“That means that managers are asked to do a lot more, and it puts a lot of strain on the people who are still working,” Brice said. “The labor cost is the big variable. … When sales are down, you have to manage that by reducing your labor cost.”
Thinking outside the box
To survive, restaurants have had to search for new revenue sources including takeout, delivery and even delivering groceries.
The Snow Bowl Steamboat has moved all of its seating to an outside lawn, and chef Pete List has gone to a barbecue menu. The west Steamboat restaurant used to rely on bowling to draw customers through the doors, but because of the pandemic, bowling has stopped.
“We think that we have some good progress going, and some good momentum,” said Corey Wagner, executive vice president with Western Centers Inc., which manages Snow Bowl. “There have been quite a few people who have come in and said, ‘We really appreciate what you guys did with Family Bowl, and we want to support you guys for what you guys did for the community.”
During the shutdown, Snow Bowl provided free, daily meals for those who found themselves out of work. From March 23 through June 7, the bowling center provided more than 20,000 meals to those in need. And then, the business began transitioning back to a for-profit model.
“We can always use more business,” Wagner said, “We are six days in, and things are going well, and we’ll kind of see as we get through this week on what things look like.”
Like so many businesses, Snow Bowl is looking forward to the Fourth of July holiday. Local restaurants are hoping for visitors and a boost in their revenue.
“This weekend will be the height of our visitation for the entire summer,” said Kara Stoller, executive director of the Steamboat Springs Chamber. “There are some great things that come with that, but we need to keep our focus on staying healthy and safe.”
It will be a critical week for restaurants that are hoping to fill tables and put some money away for the fall.
“I know there has been a lot of conversation that restaurants seem really busy,” Stoller said. “I think that has a lot to do with the outdoor seating … and doesn’t necessarily correlate to the amount of sales.”
She encouraged people to support local businesses including restaurants. She is also hoping people will order takeout from restaurants participating in The Great American Picnic, which will take place Saturday.
At this point, Sharp said everything helps.
“We want the community to stay safe, and we want to remain open, but we also don’t want to see a spike in cases, and we don’t want our employees to get sick or to get other people sick,” Sharp said. “We’re trying to keep everybody safe, but we do want to balance safety with keeping things open and making sure that businesses are here once this is cleared up.”
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