Armed with research that Pennsylvanians want more access to alcoholic products, a new alliance will advocate for statewide changes.
The Coalition for Convenient Sales, an alliance of trade associations, retailers, business owners and customers, is advocating to expand access to spirits-based ready-to-drink products.
Coalition members include Pennsylvania Restaurant and Lodging Association, Pennsylvania Food Merchants Association, Pennsylvania Chamber of Business and Industry, Distilled Spirits Council, and National Federation of Independent Business.
“We are pleased to announce the formation of the Coalition for Convenient Sales,” said Alex Baloga, president and CEO of Pennsylvania Food Merchants Association. “It’s long past time to change the liquor laws and give Pennsylvanians the convenience they want and deserve, and we will all be pulling together to get this done.”
A new study by Public Opinion Strategies and David Binder Research found 81% of Pennsylvanians support proposed legislation, Sen. Bill 688. that would allow licensed establishments to offer ready-to-drink cocktails with an alcohol by volume (ABV) of 12.5% or less to be sold in the same places as beer, wine, and hard seltzers.
The poll shows that support for this proposal is statewide and cuts across demographics and party lines.
“This research finds that Pennsylvanians are ready to move past an antiquated liquor sales system that was developed nearly 100 years ago,” said Micah Roberts of Public Opinion Strategies, one of the principal researchers on the project. “The public very clearly wants a modernized, convenient system that keeps alcohol sales safe while making it more convenient for consumers.”
Will Gudelunas of David Binder Research said one thing that stood out in the research was that Pennsylvanians find the state’s liquor sales system inconvenient.
“People want to purchase similar products at the same location without having to make an extra trip,” Gudelunas said.
“We expected positive results from this survey, but we are encouraged at just how overwhelmingly popular this concept is,” said Baloga. “Our current laws were drafted at the end of Prohibition and no longer make sense in a modern world where you can go to a grocery store to buy beer and wine with similar alcoholic content. We believe this is the year we will get this done.”
John Longstreet, president of the Pa. Restaurant and Lodging Association (PRLA)
This has been a tough year for the hospitality industry and few organizations are more aware of that than the Pennsylvania Restaurant and Lodging Association (PRLA). The Central Penn Business Journal recently sat down with John Longstreet, president of the PRLA, to talk about how its members are coping with the pandemic and what the organization is doing to help.
Q: As cases of Coronavirus rise, how can restaurants and bars protect their patrons and employees?
A: The Governor has guidelines that are very helpful at the Pennsylvania Department of Health website. We refer to those and guidelines created by the CDC and the National Restaurant Association. The ServSafe program developed by the National Restaurant Association has a COVID addendum added to it, which extends to all 52 states. We say that because we have a unified partnership agreement in Puerto Rico and DC.
The most important aspects of safety are sanitation of surfaces, masking and social distancing. There were many protocols already put in place prior to COVID due to regulations put out by the FDA, the Department of Agriculture and the Department of Health, so that the [hospitality industry] arguably has more safety regulations and protocols than any retail business
Q: How were business models tweaked to cope with this crisis?
A: The first thing our industry did was pivot to take out, delivery and curbside pickup. Historically, 50 percent of food purchased away from home is at restaurants. Some people don’t cook, others lack kitchen facilities, so restaurants became essential businesses. When restaurants reopened, they found ways to maximize their capacity, while making sure there was social distancing. For instance, Red Robin converted their waiting areas to seating areas to increase capacity and asked that customers wait in their cars.
Restaurant guidelines allowed for plexiglass barriers on the backs of booths and bar barriers, but bar seating is prohibited now, which makes it difficult to get to 50 percent capacity at some eateries
Q: Is ‘take out only’ going to carry restaurants through this difficult period?
A: No, it won’t. Restaurants operate on a 5, 7% margin. Before the pandemic, takeout was 10 percent, at best. Now some have gotten up to 30 percent, but that’s not enough to sustain businesses through the winter. They need two things: to open at a reasonable capacity and to receive a significant amount of financial help from the state—a tall order when we have 26,800 restaurants in Pennsylvania.
Q: Please talk about the July 15 mitigation order and some of the issues it created.
A: The mitigation order that went into effect on July 15 limited private parties to no more than 25 people. Most hotels ballrooms have the capacity to seat 2,000, so think about that.
In addition to that, restaurant capacity was reduced to 25 percent and bar seating was eliminated. This caused many restaurants to close to indoor dining. Imagine a 100-seat restaurant being cut down to 25 people and that includes the staff.
Q: What about self-certification—the optional program by which restaurants can assure employees and customers that they are adhering to COVID guidance?
A: We heard time and again that some restaurateurs think that the Wolf administration is trying to entrap them. There’s no evidence of that, but because they feel targeted, they are understandably wary.
Q: Has the Wolf administration Worked with the PRLA?
A: Early on, we reached out to the Governor’s team and said we’d like to work with them in any way we could and it became a collaborative relationship, until a week prior to July 15, when we were on the phone with them again and at that time we talked about ideas to further stop the spread. Then, on July 15, we were scheduled to speak again and they said that they were thinking of doing some things which were different than those we had discussed a week prior.
They ended up reducing restaurant capacity to 25 percent and when we asked if there was evidence to justify the reduction they said, “We don’t want to become another California or Arizona.” CBS News later asked for data and never received any.
At that time the Wolf administration also announced that private parties would be reduced from 250 inside to 25, so you can imagine all of the events that had to be canceled. This is when the restaurant industry began to lose faith in the administration. We heard stories about restaurants that had ordered thousands of dollars’ worth of food. You could also argue that pushing parties out of regulated places into unregulated places could also cause the spread.
Q: Has waiving liquor license fees helped?
A: It means almost nothing because the average fee is between $600 and $1,500. This year’s fees were deferred, but if they want next year’s deferred, they will have to pay this year’s fees. I’ve heard operators say that they could make that up in one evening at 50 percent capacity.
Q: Which types of restaurants have the best chance at weathering this storm
A: Quick serve, like McDonald’s, Wendy’s and Burger King since they are already set up for drive through. Some are eliminating overhead by keeping their dining rooms closed.
Q: How are mom and pop’s doing, compared to chains?
A: Both are in the same boat because they are all suffering and can’t spread money over their portfolio.
Q: How has the PLRA’s Advocacy Fund helped business owners through this crisis?
A: Initially, hotels were not included as essential businesses and we were influential in getting the administration to update that list. We learned quickly that information flow was very important. We became a news organization and published “The Daily Update.” We also created a weekly webinar to pass on information. We wanted to help furloughed employees, so we worked to expedite unemployment compensation and enhanced unemployment compensation. We also waived dues for non-members and have had 145 new restaurants join PRLA since the pandemic started because they recognize the value of what we’re doing and that’s been gratifying.
Q: How might another lockdown affect the hospitality industry?
A: The July 15 mitigation orders certainly hurt business. The administration thought they were doing the right thing, but I would be surprised if they go into further mitigation. Everyone knows that, for the most part, they are making it up as they go and so they keep trying new things but I’m not sure that a lockdown will happen again.
Q: What more would you like to have seen from the state and federal government?
A: There’s a billion dollars in federal money from the CARES Act that has yet to be distributed here in Pennsylvania and we’d like to see that expedited.
We are also watching HB2615 sponsored by Rep. Todd Stephens (R-Montgomery) which will provide community assistance grants for restaurants and will create a 250 million grant fund with up for 50 thousand dollars per location.
Q: How would you say the future of the industry has been affected and how will that affect other businesses?
A: Financing could be an issue for future restaurants. In the past, you saw a restaurant close and another new one would take its place, but that isn’t going to happen now. Cities could also be affected. In Pennsylvania, 63 percent of the operators said that it’s unlikely that they would be in business six months from now if conditions do not change.
This has been a tough year for the hospitality industry and few organizations are more aware of that than the Pennsylvania Restaurant and Lodging Association (PRLA). The Central Penn Business Journal recently sat down with John Longstreet, president of the PRLA, to talk about how its members are coping with the pandemic and what the organization is doing to help.
Q: As cases of Coronavirus rise, how can restaurants and bars protect their patrons and employees?
A: The Governor has guidelines that are very helpful at the Pennsylvania Department of Health website. We refer to those and guidelines created by the CDC and the National Restaurant Association. The ServSafe program developed by the National Restaurant Association has a COVID addendum added to it, which extends to all 52 states. We say that because we have a unified partnership agreement in Puerto Rico and DC.
The most important aspects of safety are sanitation of surfaces, masking and social distancing. There were many protocols already put in place prior to COVID due to regulations put out by the FDA, the Department of Agriculture and the Department of Health, so that the [hospitality industry] arguably has more safety regulations and protocols than any retail business
Q: How were business models tweaked to cope with this crisis?
A: The first thing our industry did was pivot to take out, delivery and curbside pickup. Historically, 50 percent of food purchased away from home is at restaurants. Some people don’t cook, others lack kitchen facilities, so restaurants became essential businesses. When restaurants reopened, they found ways to maximize their capacity, while making sure there was social distancing. For instance, Red Robin converted their waiting areas to seating areas to increase capacity and asked that customers wait in their cars.
Restaurant guidelines allowed for plexiglass barriers on the backs of booths and bar barriers, but bar seating is prohibited now, which makes it difficult to get to 50 percent capacity at some eateries
Q: Is ‘take out only’ going to carry restaurants through this difficult period?
A: No, it won’t. Restaurants operate on a 5, 7% margin. Before the pandemic, takeout was 10 percent, at best. Now some have gotten up to 30 percent, but that’s not enough to sustain businesses through the winter. They need two things: to open at a reasonable capacity and to receive a significant amount of financial help from the state—a tall order when we have 26,800 restaurants in Pennsylvania.
Q: Please talk about the July 15 mitigation order and some of the issues it created.
A: The mitigation order that went into effect on July 15 limited private parties to no more than 25 people. Most hotels ballrooms have the capacity to seat 2,000, so think about that.
In addition to that, restaurant capacity was reduced to 25 percent and bar seating was eliminated. This caused many restaurants to close to indoor dining. Imagine a 100-seat restaurant being cut down to 25 people and that includes the staff.
Q: What about self-certification—the optional program by which restaurants can assure employees and customers that they are adhering to COVID guidance?
A: We heard time and again that some restaurateurs think that the Wolf administration is trying to entrap them. There’s no evidence of that, but because they feel targeted, they are understandably wary.
Q: Has the Wolf administration Worked with the PRLA?
A: Early on, we reached out to the Governor’s team and said we’d like to work with them in any way we could and it became a collaborative relationship, until a week prior to July 15, when we were on the phone with them again and at that time we talked about ideas to further stop the spread. Then, on July 15, we were scheduled to speak again and they said that they were thinking of doing some things which were different than those we had discussed a week prior.
They ended up reducing restaurant capacity to 25 percent and when we asked if there was evidence to justify the reduction they said, “We don’t want to become another California or Arizona.” CBS News later asked for data and never received any.
At that time the Wolf administration also announced that private parties would be reduced from 250 inside to 25, so you can imagine all of the events that had to be canceled. This is when the restaurant industry began to lose faith in the administration. We heard stories about restaurants that had ordered thousands of dollars’ worth of food. You could also argue that pushing parties out of regulated places into unregulated places could also cause the spread.
Q: Has waiving liquor license fees helped?
A: It means almost nothing because the average fee is between $600 and $1,500. This year’s fees were deferred, but if they want next year’s deferred, they will have to pay this year’s fees. I’ve heard operators say that they could make that up in one evening at 50 percent capacity.
Q: Which types of restaurants have the best chance at weathering this storm
A: Quick serve, like McDonald’s, Wendy’s and Burger King since they are already set up for drive through. Some are eliminating overhead by keeping their dining rooms closed.
Q: How are mom and pop’s doing, compared to chains?
A: Both are in the same boat because they are all suffering and can’t spread money over their portfolio.
Q: How has the PLRA’s Advocacy Fund helped business owners through this crisis?
A: Initially, hotels were not included as essential businesses and we were influential in getting the administration to update that list. We learned quickly that information flow was very important. We became a news organization and published “The Daily Update.” We also created a weekly webinar to pass on information. We wanted to help furloughed employees, so we worked to expedite unemployment compensation and enhanced unemployment compensation. We also waived dues for non-members and have had 145 new restaurants join PRLA since the pandemic started because they recognize the value of what we’re doing and that’s been gratifying.
Q: How might another lockdown affect the hospitality industry?
A: The July 15 mitigation orders certainly hurt business. The administration thought they were doing the right thing, but I would be surprised if they go into further mitigation. Everyone knows that, for the most part, they are making it up as they go and so they keep trying new things but I’m not sure that a lockdown will happen again.
Q: What more would you like to have seen from the state and federal government?
A: There’s a billion dollars in federal money from the CARES Act that has yet to be distributed here in Pennsylvania and we’d like to see that expedited.
We are also watching HB2615 sponsored by Rep. Todd Stephens (R-Montgomery) which will provide community assistance grants for restaurants and will create a 250 million grant fund with up for 50 thousand dollars per location.
Q: How would you say the future of the industry has been affected and how will that affect other businesses?
A: Financing could be an issue for future restaurants. In the past, you saw a restaurant close and another new one would take its place, but that isn’t going to happen now. Cities could also be affected. In Pennsylvania, 63 percent of the operators said that it’s unlikely that they would be in business six months from now if conditions do not change.
Governor Tom Wolf Thursday announced a plan to waive liquor license fees to provide financial relief to restaurants and bars, which have faced significant financial impacts during the COVID-19 public health crisis. PHOTO/SUBMITTED –
Restaurant industry advocates are calling Pennsylvania Gov. Tom Wolf’s waiver of liquor license fees to help offset COVID-19 losses too little and too late
“PRLA has been advocating for a number of industry ‘lifelines’ since March 19. It’s unfortunate that the administration is only now, nearly eight months later, taking our requests seriously,” said John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association. “While our industry desperately needs support, these olive branches will not sustain businesses that are still reeling from closures, shrinking revenue and well-intended but ineffective mitigation efforts unnecessarily targeting restaurant operators.”
Wolf on Thursday said the state would waive all liquor license fees for 2021. The move came nearly a week after he vetoed House Bill 2513, which restaurant owners had been calling for. The bill would have stripped many of the COVID-19 mitigation regulations he added since July 15, leaving mask wearing and 50% capacity in place.
Longstreet said supporting loosened restrictions would have been more helpful.
“The $20 million in licensee fee waivers only accounts for 2021 fees, does not provide relief for 2020 fees and only amounts to about $1,500 per licensee, which doesn’t compensate for the daily losses in revenue licensees are facing under the current orders,” he said.
Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association said more is needed.
“While licensing fee help is part of the solution, much more needs to be done, particularly considering the size of the industry and its role in the Pennsylvania economy,” he said in a release.
He said his organization would like to see liquor license fees waived for both 2020 and 2021. It’s also calling for industry specific grants – not loans.
He said the association would also like to see the governor meet many of the demands that were in the bill that he vetoed including allowing bar seating and eliminating the need to buy food to purchase liquor.
It would also like to see the curfew to sell alcohol moved from 11 p.m. until midnight to help accommodate shift workers.
The American Hotel & Lodging Association reports that 65% of hotels in the country have been operating below the breakeven point . PHOTO/GETTY IMAGES –
The COVID-19 pandemic has drastically reduced the number of people travelling both for business and leisure, and as Labor Day approaches hotel operators are saying it’s been a cruel summer.
The American Hotel & Lodging Association reports that 65% of hotels in the country have been operating below the breakeven point even the traditional Labor Day Holiday weekend bookings are down 66% from last year.
“While hotels have seen an uptick in demand during the summer compared to where we were in April, occupancy rates are nowhere near where they were a year ago. Thousands of hotels can’t afford to pay their mortgages and are facing the possibility of foreclosure and closing their doors permanently,” said Chip Rogers, president and CEO of AHLA.
John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association said the Keystone state is also struggling, but seeing some improvement.
He said occupancy at Pennsylvania hotels has risen to about 42% from a low of about 17% in March and April.
Still, he said, it’s not enough.
“A well run hotel can break even at about 50%,” Longstreet noted.
According to the AHLA, urban hotels are suffering the most and facing collapse with cripplingly low occupancies of 38%, significantly below the national average.
Longstreet said the Philadelphia and Pittsburgh area hotels are even lower than the national average at around 30% occupancy.
The good news is that hotels in the Lehigh Valley and Pocono areas are doing better than average.
Hotels in the Poconos were at about 62% occupancy in July, with the Lehigh Valley just slightly lower.
“You’ve got a terrific resort area within driving distance of the largest metropolitan area in the country [New York],” he said.
He said the Lancaster area hasn’t been as lucky. He said hotels in much of the Pennsylvania Dutch country were at about 42% occupancy during the summer, but Longstreet said he had talked to a number of hotels who were operating in the teens.
Nationally, consumer travel remains at all-time low, said the AHLA, with only 33% of Americans reporting they have traveled overnight for leisure or vacation since March and just 38% saying they are likely to travel by the end of the year.
But Longstreet said he expects that will return. His bigger concern is for business travel, which makes up more than half of all hotel stays.
“Corporate travel will be the slowest to come back,” Longstreet said.
He said some analysts are predicting that it will be 2023 before corporate travel returns to normal, but he is concerned that as more companies rely on remote meeting technologies, like Zoom, the decline will remain permanent.
He said event revenue has also bottomed out for hotels. He said weddings, parties and corporate events are always a major source of revenue for hotels and with limits on gatherings of over 25 people in the state that revenue has all but disappeared.
He estimates that about 10% of hotels won’t survive the pandemic.
Longstreet said the industry is hoping for federal relief.
While hotels did receive some PPP money, employee salaries aren’t the only expenses they need help with.
He said most hotels did not qualify for Main Street lending, which would have helped more.
He said the industry is hoping that the government will amend the requirements for Main Street loans, noting that only $60 billion of $500 billion in available funds have been dispersed because of the stiff requirements.
“There is a desperate need for the next round of funding with less restrictions on how it is spent,” Longstreet said.
The AHLA is also calling on congress for further assistance.
“Our industry is in crisis. Thousands of hotels are in jeopardy of closing forever, and that will have a ripple effect throughout our communities for years to come,” said Rogers. “We need help urgently to keep hotels open so that our industry and our employees can survive and recover from this public health crisis.”
Cash flow for local restaurants has hit a grinding halt following the Wolf administration’s statewide closure of business operations to discourage people from meeting in groups where they could potentially spread the coronavirus.
Local restaurants are transitioning out of a dine-in model to take-out and delivery service model en masse and piloting promotional discount offerings. However, business owners — who have had to lay off more than 100,000 employees in the last week — say they doubt delivery and take out will make up revenue shortfalls with Pennsylvanians stocking up on grocery items.
“I think if you’re going to be realistic, there’s so much unknown that you’d be a fool to say what’s going to happen,” said Dosie Dough owner Amy Lloyd, based in Lititz. “One of the things that’s scary for me as a business owner is you want to have a successful business but at the same time you don’t want to look back and say there was something we should have done differently.”
Last week, Gov. Wolf joined many other state governments by ordering non-essential businesses to close until people can congregate in groups without potentially spreading COVID-19.
In just a few days, restaurants ceased dine-in services and converted to take-out and delivery options instead. It’s been easier for some than for others, depending how much of their workforce they can retain and how built-in their delivery- and take-out services were before the onset of the pandemic.
“Most small businesses aren’t prepared to handle this kind of timeline for closure,” said Jessica Ayala, owner of Revival Social Club in York and Home 231 in Harrisburg. Between the two businesses, Ayala employs 35 workers. But last week she had to cease operations and lay off most of the workforce except for herself and her husband, co-owner Rob Ayala, who works on-site while she delivers food.
The Pennsylvania Restaurant and Lodging Association (PRLA) told members on a conference call the day after the governor’s announcement that they were in talks with lawmakers to enact measures that would soften the economic fallout of mandated closures and urged them to do the same.
“There is a long list of things our industry will need to get out of this,” said PRLA Vice President of Government Affairs Melissa Bova. “We are focusing right now on items that need to be done immediately to help our industry.”
Bova said the trade group’s top concern was the March 20 sales tax payment deadline.
“We are all cognizant that cash flow is nonexistent in our industry and we want to preserve cash flow as much as possible, so we are asking for a delay on that March 20 deadline,” Bova told PRLA members on the Wednesday conference, which was posted to YouTube.
State Revenue Department officials listened to the trade group’s pleas, announcing on Friday the penalties for missing the deadline for Accelerated Sales Tax prepayments would be waived. As for April sales tax payments, the department said it would waive the requirement of meeting the prepayment deadline, instead asking businesses to remit the sales tax they would have collected in March.
Staff-wide layoffs have been a consistent detail restaurant owners have cited in interviews, contributing to the 120,000 people who submitted claims for unemployment benefits by Tuesday last week following Wolf’s shutdown order.
Jordan Pfautz, owner of ROOST Uncommon Kitchen in York, said he’s doing everything possible to “stop outgoing cash so when this ends I have enough to get food and restart.” He had to furlough the front-of-house staff and two chefs and convert to carryout-only using DoorDash and GrubHub.
Pfautz, also a co-owner of York City Pretzel Company, said he had to lay off the eight-person staff of the soft pretzel distributor, temporarily suspending operations.
“We stopped buying new food at least until we know more about what this is going to happen,” he said. “That’s the hardest part, is that I really don’t know.”
Takeout via third-party delivery services accounts for approximately 25-30% of sales before the coronavirus took a toll on his business, Pfautz said. He’s hopeful revenue from take-out services will continue to bring in as much revenue, but the surge of consumers into grocery stores to stock up on food items for social distancing actions makes him unsure.
“Without the government helping in some way, a lot of small business just won’t be able to get through this,” Pfautz said.
Many restauranteurs like Amy Lloyd, owner of Dosie Dough in Lititz, are building off of an existing in-house delivery and take-out service.
“We already are a take-out restaurant, but we are upping that another notch,” she said. “We are encouraging everyone to call ahead and we opened up an online order service.”
As part of due diligence, Lloyd asks customers to wait outside the establishment for their orders and reduce their contact with each other and her staff. And she requires constant sanitation procedures throughout the facility. Protocols are tough on a small-town favorite like Dosie Dough with a loyal customer base who come to her restaurant looking for community, Lloyd said.
“We are limiting that atmosphere which is a little bit challenging because a lot of people want community and I think one of the things people want right now is community and that’s the one thing you’re not supposed to do,” Lloyd said.
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