Just a few weeks ago Maine’s hospitality industry was advancing toward its 12th straight year of record sales. Earlier in January, traditionally our slowest month, Maine Revenue Services confirmed that hospitality sales were up a healthy 10 percent. By far the biggest issue facing the industry at that time was how to find employees to support this growth in a labor market that was hovering near 3 percent unemployment.
How quickly a month has changed everything, likely for a long period to come. No longer are we talking about records. That ended for the foreseeable future. With little or no business coming in because of government directives to stay at home, Maine’s restaurants and hotels are desperately trying to stay afloat. The industry, which is almost entirely comprised of small business, finds owners depleting their savings while looking for funding from any source. Consequently, our employees are being furloughed and laid off in massive numbers. Through the first three weeks of March, hospitality job losses in Maine exceeded 32,000 and are most certainly climbing much higher by the day, according to survey data from the American Hotel and Lodging Association and the National Restaurant Association.
Every one of HospitalityMaine’s restaurant and hotel members have either closed or are operating with skeleton crews. Anecdotal evidence indicates that hotels, some with hundreds of rooms, are booking only a handful a night, with most “guests” being first responders and those traveling for emergency needs. The restaurants that are able to operate have set up takeout and delivery service, many for the first time.
For now, our top priority must be the health and safety of employees and customers to shorten the duration of the epidemic and to save lives. The terrible toll that the COVID-19 epidemic is taking on Maine families across the state cannot be underestimated. At the same time, with one out of every 10 Mainers employed in hospitality, the long-term health and future of our industry is also in peril, and there is no time to waste on this.
From our view, an important key to hospitality’s recovery is the $2.2 trillion CARES Act, and specifically the small-business provision co-authored by Maine Sen. Susan Collins. With some direct input from our organization, it provides forgivable loans to small businesses. In other words, the government will fund small businesses to keep and pay their employees and most operating expenses like rent and utilities. And, most important, the business loan can be forgiven if the business maintains their number of employees through this crisis.
Sen. Collins’ approach is innovative and bold, and our association supported it wholeheartedly because it seeks to establish a true public-private initiative, something often talked about but not delivered. This provision – the Paycheck Protection Program – allows the federal government and small businesses to work together for the betterment of people first. That Sen. Collins comes from a small-business family makes it clear that she understands Maine, and this is reflected in this landmark legislation. It will not ensure that all of our hospitality businesses will survive, but it does provide breathing room and keeps people employed, with the hope that this will hasten our eventual economic recovery.
The definition of hospitality is the friendly and generous reception and entertainment of guests, visitors or strangers. This requires face-to-face customer service, and neither is possible right now. Eventually, when the all clear bell is sounded, customers will start to return. How quickly people will travel to stay in hotels or dine inside restaurants is yet to be determined. We will very likely have a “new normal” to contend with, and an additional challenge will be how our restaurants and hotels adapt and succeed in this environment.
Still, hospitality is one of Maine’s oldest business sectors and a core part of the state’s brand. Through no fault of their own, some of our excellent establishments will likely be lost before the coronavirus epidemic is over. However, most restaurants and hotels were started or operated by entrepreneurs. They are resilient by nature and used to having hurdles to overcome. The emergency funding from the federal government provides some time to begin planning new strategies and plans. And that is just what this industry needs right now.
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