On Friday, Restaurant Business reported that Texas chain eateries saw a 15 percent drop overall in same-store sales during the final month of August, but many local restaurants will likely be feeling more of a drop in the days ahead.
While many eateries are doing their best to get back to normal business, with many extending Houston Restaurant Weeks dining deals, it's evident to most restaurateurs that people aren't really dining out right now. Traffic has been a nightmare. People are likely saving for repairs and dealing with flooded homes and cars. Harris County alone is looking at about 136,000 flooded residences, according to the Houston Chronicle, and only 15 percent of the county's 1.5 million properties are insured against flooding. Renters are facing evictions or dealing with moldy apartments, and currently there are about 56,000 Houstonians and Gulf Coast residents staying in FEMA-funded hotels. For those who made it out unscathed, survivor's guilt may also be a factor in their not wanting to go out to eat, let alone venture far from home.
Harvey also rolled in at the worst of times, the very end of the month. When rent is due. Tax payments are due. Payroll is due. For some restaurants, the coming weeks could be a deal breaker. Others have savings and are still operating just fine. The challenges are really case by case for most restaurants and bars right now, but everyone pretty much agrees on one thing: Traffic isn't helping.
Heugel confirms that his sales are significantly low right now. "Since the Friday before the rain happened, we've been down 70 percent. That includes closing for the storm, and reopening. Across all the bars. I don’t think we’re even doing 50 percent of what we normally do."
Even still, Heugel notes just how lucky they've been. None of the properties were damaged at all. Forty percent of his 80-person staff evacuated their homes, and a few had extensive damage, but he was able to offer some staff members housing for two months or personal loans for other hardships thanks to savings. "I think we’re in a pretty unique situation to do all that. I don’t think that’s a typical scenario. We're really thankful right now. That's how we feel."
Even though industry workers are making less money right now, and most restaurants and bars in the city can't afford to lose sales, Heugel believes the hospitality industry will rebound. He is concerned about neighborhoods with high flood waters, though, and says Downtown took a very big loss. "We've lost two business weekends down there. Towers still don’t have residents in them. There's two complete weeks of sales just gone. A lot of those places are making money only on weekends, so two days a week."
With so much uncertainty and stress dominating the industry right now, Heugel says patience is key for both workers and consumers. "Maybe if your server or bartender seems off, just understand they're going through a lot of stress right now."
At Houston farm-to-table restaurant Dish Society in the Galleria, owner Aaron Lyons agrees that traffic is a major problem in getting people in the door, but other issues appear to be trickling down into day-to-day operations as well.
"The volume of business we're doing is down 20 to 30 percent," he says. "It's down considerably."
Even though the restaurant didn't sustain damage in Harvey, an entire half of the street is currently cut off, Lyons says, so people can't easily find a way in. He also believes that the neighborhood is busy cleaning out homes, and could just be too broke to think about eating out. "Uber and DoorDash took a while to get back online," which has also contributed to a decline in sales.
Oddly enough, one problem he hasn't had in keeping his strictly farm-to-table operation going is finding locally sourced produce and meat. Many of the small farms Dish sources from weren't affected. "Atkinson Farms drained really well. Sustainable Harvesters didn’t have any flooding, and in fact, we’re collaborating with them to create a salad to deliver to volunteers in shelters. Felix [Florez, of Black Hill Meats], he's probably been the most impacted. He's raising money through Piggy Bank."
Despite further hits to revenue, including lost catering jobs and having to toss out some $10,000 worth of food after five days of closure, Lyons still believes his restaurants do not have it bad at all. "There’s are restaurants that are underwater, and employees that can’t work."
One fairly big problem, though: An upcoming location of Dish Society that's heading to Memorial has been delayed. "We have all these subcontractors that were impacted and can't return to the job. We’ve got 40 people on payroll at that store, and now we have to find room for them at our other stores or assign special projects. We can’t have them take hours away from employees at other stores. It's a very delicate balance."
Still, he says, morale remains high because his employees were paid for the days they were closed and the restaurant set up an employee assistance fund for its workers. Some lost apartments. Some lost everything they owned, and had to buy jeans just to come back to work. The restaurant has also been cooking for first responders and relief volunteers.
"We're just trying to do what we can, for the people who weren't as lucky."
"We were concerned we couldn’t make payroll," chef Ryan Pera of Agricole Hospitality admits. "I learned a few lessons. I'm still a young businessperson, and not as smart as I wish I was. Next time something like this happens, I want to have more cash in a bank. But on an actual timeline, we’re looking good right now. We're just trying to create a sense of normalcy."
At Agricole's Heights-based Italian restaurant Coltivare, that means making major seasonal menu changes. The restaurant did not extend its Houston Restaurant Weeks offerings, so that it could move forward with changing its menu, Pera says, but will do the fundraising event again in 2018. In lieu of that dining deal, the eatery is donating $1 on every purchase of spaghetti to Harvey relief. "A lot of customers have been ordering it."
A lot of customers are neighborhood folks, Pera says. He also believes that traffic has been a major factor in getting customers. "People don't see a reason to drive across town. Curfew being lifted was a big deal for us too. We’re glad it's retired. Before we were shutting at nine to get our employees home by midnight."
Of Agricole's employees, Pera says only about 10 percent were affected by Harvey, and last weekend managers were helping some remove drywall from their homes. "They all have transportation, which is great, so they're still able to do their job and get paid. We're trying to help them however we can."
With school and people returning to everyday life, Pera says, "I know for me personally, this is the fourth devastating hurricane in my life. Even in Houston, in my eyes, it's already a fast recovery. It’s going to continue. Small steps forward."
"Tuesday was a rough day for most of us." That's what Kevin Floyd says. Floyd is a partner in Chris Shepherd's Underbelly, Hay Merchant, Blacksmith and One Fifth eateries and notes that on the Tuesday after Labor Day, that's when most restaurants had it kick in, just what they're facing right now. "For those of us not directly affected, we’re still processing what happened to us. It's shell shock. There's a lot of fear. A lot of people not negatively impacted, they still don't want to go out and spend money."
Directly following Harvey, Hay Merchant was able to open up with a hodgepodge crew of the restaurants' collective workers and offer service to anybody who might need food. Now that all his restaurants, including the brand-new One Fifth Romance Languages are operational, Floyd believes survivor's guilt might still be the reason volume is low.
"I think people are gonna go out as much as they ever went out before, but they’re going to opt for more price-approachable options. Hay Merchant might see a slight bump overall. One Fifth and Underbelly will probably see a decrease."
Floyd hopes that the 2017 holiday season will snap people back into their normal buying habits.
As for recovery, "I think a lot of people are saying it’s going to be five years. I’ve been blown away by the Texasness of this response. I think it will only be a couple. But agony for next few months."