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We're going to see depressed restaurant revenue for quite some time: Tom Colicchio

Tom Colicchio, Chef & Owner of Crafted Hospitality, joins The Final Round to discuss the state of the restaurant industry during COVID-19 and the RESTAURANTS Act Bill.

Video Transcript

SEANA SMITH: Welcome back to The Final Round. Well, it's no secret that the restaurant industry has been hit hard by the coronavirus pandemic, with many doing everything they can to survive over-- over the last several months. But for more on this, we have Tom Colicchio joining the show again. He's celebrity Chef and Founder of Crafted Hospitality.

And Tom, it's great to have you. And the last time we spoke was back in March, and we're now six months into this pandemic. It's been an extremely challenging time for your industry. So help give us a sense just of how the restaurant industry is faring at this point.

TOM COLICCHIO: Well, it's not faring at all. In fact, estimates are that without help from the government, 85% of independent restaurants in the country will close. I mean, we're looking at an extinction event here for-- for independent restaurants.

You know, PPP really didn't help, especially if you were closed. You know, maybe you could pay some rent. But if you weren't open, it really wasn't-- wasn't helping you. Even the extension of 24 weeks, it's a little better, but it's really not-- it's not the-- it's not the magic bullet that we need.

And we're struggling. I'm doing, in one of my restaurants, maybe about 30% of the business that I should be doing this time of the year. In my New York restaurant Craft, I'm doing about 22%. Third restaurant in New York just opened up with some outdoor seating up on the rooftop of a hotel. That's just no way to-- you know, it's not sustainable at all.

RICK NEWMAN: Hey, Tom, Rick Newman here. And you're talking about summer when restaurants can serve people outdoors. Of course, that's not going to be the case in a lot of the country come fall and winter. Have you noticed any innovative programs, whether it's a state program, city program, local program to help restaurants get to the other side of this? Is anybody doing anything that's helping?

TOM COLICCHIO: Well, the closest thing is-- so I'm a founding member of the Independent Restaurant Coalition, and we have a bill that's both in the House and the Senate. It's called the Restaurants Act. It's $120 billion grant that will be available to restaurants. And the money can be used for-- for not only payroll or rent, but also for back accounts payable, also for PPE that you'll need for your staff, also to build any partitions or things like that that you'll need going forward.

We have some momentum. We have 181 co-sponsors in the House. We have 29 on the Senate side, including Leader Schumer. And you know, it's also-- it's bipartisan. We have bipartisan support. Roger Wicker, senator from Mississippi, wrote the bill on the Senate side, and it's co-sponsored by John Cornyn of Texas and Elizabeth Warren.

We'll probably never see that ever again. And so there's bipartisan support for this, and this is the real lifeline that we need. And so we're hoping that if both sides of the aisle could break the logjam here and really start negotiating that our bill can be part of the new stimulus package coming out.

AKIKO FUJITA: Tom, I'm curious how damaging this stop-and-go approach has been. There's a lot of restaurants who shut down in the initial months, reopened only to find, a few weeks later, they had to close, and then permanently close because of the damages from that. I mean, can you talk about the impact of that, as well, and how that's affected consumers or those coming to your restaurants too? Maybe the first time they really-- were willing to go, but as there are questions about how-- how much of this virus is under control, I imagine there's more reservation in going to restaurants too.

TOM COLICCHIO: Yeah, I think it all depends on what state you're in. But yeah, there's not a lot of consumer confidence when they see restaurants opening and closing. And also, I think for the operator, there's a real psychological damage that's being done here. You think you're finally getting open. You think maybe you'll see light at the end of the tunnel, and you get shut down again.

And it's really demoralizing, not only for the owners, but also the staff. And so we have a long way to go. Even-- even if we get to the other side of this, we're going to still-- you know, we're going to see depressed restaurants' revenues for-- for quite some time.

But then on the other side of that, some of the chain restaurants that have drive-throughs, they're doing fine, which is why our Independent Restaurant-- Independent Restaurant Coalition is calling for independent restaurants, we're defining as restaurants that are not publicly traded. It can include some franchisees, but those fees that-- that can come in those grants, they can't go back up to the parent company in fees. And so we're really looking to help the independents.

We're talking about 500,000 operations throughout the country, 11 million employees. And when you factor in fishermen, farmers, and the like, that's probably another 5 million people. So it's a big chunk of the economy. It's a trillion dollars to the economy. It's, I think, 4 and 1/2% of the GDP.

But again, we're all small independents, and this is really the first time collectively we've come together to support each other. So we're-- this is what we're hanging our hat on. And hopefully it'll happen. But you're right. When restaurants open and close, again, you lose consumer confidence, and it's a real blow to the operators.

DAN HOWLEY: Tom, what has the experience been so far with restaurants that are just exclusively doing outdoor dining? I know, I'm in New York, as many of us are, and a lot of restaurants are focusing on that specifically. And you know, is that proving to be helpful for them? Are they able to get as much revenue as they normally would if they were open with their indoor dining? Does the fact that it can rain, which can keep people inside, significantly hurt the amount of revenue that they can pull in?

TOM COLICCHIO: Yeah. It's-- you know, it's-- it's like a Hail Mary pass, because it's really not helping. So for instance, I have 40 seats in the front of my restaurant on 19th Street. I typically have 110 seats plus our private dining room going. So our revenues are, again, 20% of what I normally do now.

The problem with it is everyone, they think-- because restaurateurs and chefs, you know, they-- they want to take control of the situation we're in. We want to move ahead. The problem is opening with that reduced seating, you're losing money. Maybe using the PPP so you're paying your employees with PPP and paying rent.

But-- but really, without-- you're losing money. And so the longer this goes, the more money you lose. And so this is why people are making decisions to close, because it's-- quite frankly, it's cheaper to close than to lose more money. You know, in most cases, once PPP runs out, you're done.

SEANA SMITH: Well, Tom Colicchio, we know that this is an extremely challenging time, to say the least, for you and your colleagues in the restaurant industry. We really appreciate you taking the time to join us here. We wish you all the best, and we hope to having you back on the show in a couple of months to hopefully have a rosier picture of the restaurant industry. But thanks so much for taking the time to join us today.

TOM COLICCHIO: Thank you. Thanks for having me on.