As the calendar turns to 2021, Las Vegas restaurants and bars remain under a state directive that keeps dining rooms at 25 percent capacity, requires diners to make mandatory reservations, and limits tables to four people. The effects on restaurants and bars are devastating. While the city hasn’t seen a huge number of restaurants close yet, owners in Vegas say the new restrictions are stifling business and putting them in a precarious financial position as they try to develop creative ways to stay afloat.
The state’s extended mandate stays in effect until February 15, with Clark County reporting 2,320 new COVID-19 cases and 37 deaths on January 12, and Nevada’s two-week positivity rate, a key indicator health officials monitor, rising to 21.3 percent. The Nevada Hospital Association reports that ICU beds are at 80 percent capacity in Southern Nevada. The state is awaiting an uptick in COVID-19 cases following December travel and holiday gatherings. Both contributed to a spike in cases after Thanksgiving, state COVID-19 response director Caleb Cage says.
Eater Vegas talked to off-Strip restaurant owners to see how they’re holding up during the reduced capacity restrictions. These interviews have been edited and condensed for clarity.
Eater Vegas: How would you sum up business during the new restrictions, with 25 percent capacity, mandatory reservations, and a maximum four people per table?
Elizabeth Blau of Honey Salt: We have been committed to abiding by every regulation and best practice since the beginning of this pandemic. The health and wellbeing of our community — guests and staff alike — has been our top priority. The decrease to 25 percent capacity and four-person maximum, however, will decimate our industry. Takeout business will not make up for the losses and with the weather turning cold; no one wants to sit outside. We are persevering and trying our best to keep all of our staff employed.
Cory Harwell at Carson Kitchen: It is challenging, to say the least. Some of the restrictions make sense and others, well, let’s just say they are ill-conceived. The fact that restaurants and bars are still being hit with arbitrary and capricious restrictions is maddening, especially when visiting retail stores and seeing how little restrictions are in place. Diners have to make a reservation in advance for a restaurant, but 437 people can walk right into a Costco without the blink of an eye. Our “leaders” are failing us.
Natalia Badzjo, co-owner of Big B’s Texas BBQ: The new set of restrictions has definitely hurt the business. Restaurants operate on very slim profit margins as is, so trying to pay all your bills while being allowed to only accept 25 percent of business is very challenging. We do our best to cut costs and supplement the lost revenue with deliveries and anything else we can, but it's not sustainable for long. While I understand that the governor has a big responsibility, it seems that most restrictions fall on restaurants and other small businesses, while large companies get away without following many rules. Rules have to apply to everyone the same way — it's just not right. A lot of regulations also don’t make sense or help anyone.
Ken Harris, CEO of Sickies Garage Burgers & Brews at Town Square: We definitely are feeling an impact from the new restrictions, being at a lower capacity, but also, we are not a restaurant that typically accepts reservations. Since we are at Town Square, we get a lot of walk-in traffic normally, but customers are now reluctant to come in because they don’t know if they will be seated. Sickies Garage was really becoming the place to watch sports, so the four-person seating limit also cut into that weekend sports-watching crowd which was really helping us through the pandemic.
Sabine von Henning, senior director of sales at the Mob Museum: At times, it’s been challenging, but the Underground at the Mob Museum has a resilient and adaptable team. As an organization, we strive to be inclusive and have always consistently asked for feedback and input from all our team members to share their innovative ideas and thoughts on how we can improve. This pandemic period has been no exception; we have found that coming together to brainstorm how to tackle the obstacles in front of us has helped to re-energize team morale. We have been doing our best, as a team, to constantly drum up new revenue-generating ideas and, ultimately, execute them.
How have you approached takeout and delivery during the pandemic?
NB: We have always done takeout and delivery through third-party apps such as Grubhub and Postmates. The share of that has certainly increased during shutdown and restriction, but can’t completely replace dine-in business. We have a giant patio-themed dining room that is usually filled with families and groups of guests, which is currently largely unused due to restrictions.
EB: We dove headfirst into increasing and evolving our takeout and delivery business right away in March and April. It has become a continued necessary source of revenue for us. We created signature cocktail packages to go, partnering with great aligned brands like Southern, On the Rocks, Casa Dragones, and Fever Tree. For holidays, where we would usually hold big celebratory brunches, we turned to unique curated family packages so our guests could enjoy Honey Salt in the safety of their own homes.
KH: Just recently we implemented delivery, so we are starting to build up that base. We have been communicating with our customers to let them know how to make reservations and that we now are offering free delivery.
AV: We have embraced the to-go component with new and improved packaging for our delicious menu.
CH: We’ve added both to try and create additional revenue streams.
Has it helped your business? If so, how?
KH: It’s great to have the delivery and takeout options, but we are still building up our clientele, so now it has become, how do we let people know we offer these options? In our more established locations outside of Nevada, delivery and takeout do well.
AV: Embracing the to-go aspect of our menu has introduced our brand to many new guests who had seen our brand and had yet to try it.
CH: It has, but only slightly. We are located in a part of town that doesn’t have a ton of residential around it, so the idea of doing takeout or delivery may not be the first thought for people in Henderson or Summerlin or the southwest part of our valley.
NB: It certainly has helped us to stay in business and keep our team employed and paid. While previously most of our guests chose to dine in since barbecue always tastes best when eaten fresh on the spot, now we see a lot more take food to go. We have put together some great dinner packages so it’s easy to just grab enough food to feed the whole family.
What else will you be doing to mitigate lost revenue? Any new endeavors you took on?
EB: The most considerable endeavor we took on was co-creating Delivering with Dignity: a way to bring high-quality, chef-prepared meals to the most at-risk individuals and families in the Vegas Valley while keeping as many restaurant associates employed as possible. This has been a lifeline for our business and for those fighting against food insecurity, with more than 200,000 meals delivered since March 23.
NB: We have added online ordering options as well as curbside pickup and group dinner packages that are available for pickup and delivery. We also started selling gift cards.
CH: We are looking to package some of our products for sale in a retail environment.
SVH: The Underground at the Mob Museum recently launched two new a la carte whiskey-tasting experiences, which we have made accessible to guests whenever the speakeasy is open. In addition, due to high demand, we are introducing a monthly whiskey event, the Whiskey Club, where guests may enjoy premium whiskey tastings paired with specially curated food while learning alongside spirit experts. The next Whiskey Club event is scheduled for January 13. The Mob Museum produces its own line of moonshine in the Underground distillery. The Mob Museum moonshine can be found off-site at Lee’s Discount Liquor stores, Total Wine, and in bars and restaurants across the Valley. The Distillery Tour and Tasting add-on experience is incredibly popular with museum guests. We have promoted the tour more heavily to send as many guests as possible to explore the Underground. Furthermore, the Underground team hasn’t stopped. Our incredible staff continues to generate new and exciting ideas to maximize the guest experience as well as revenue.
AV: We have begun promoting our catering services and have seen great success in our ability to pivot revenue-generating outside of our building.
KH: We are working on a Take a Dinner Home-style program by offering customers dining in the restaurant a discount on select dishes to take home and heat up for another day.
What’s the outlook for 2021 at this stage? I realize there’s a huge amount of uncertainty, of course, but have you been able to plan for early 2021 at all yet?
KH: We expect to have a rough winter and then a very strong spring and summer. As Las Vegas comes back and more people go back to work, we will see more people venture in. We are very optimistic about the future.
AV: We are planning on continuing to provide our “guest service and elevated menu” both inside and outside of our buildings. We can’t wait to get back to our theme parties and events for our guests and team, and until then, we will appreciate this time we are getting to build and hone our tight-knit team of individuals who make our company so great to be a part of.
NB: I am being very hopeful that things will turn for the better by spring. It truly can’t get any worse, so I have to believe that things are about to get better. We are going through flu and virus season right now when those illnesses are more common. With weather warming up and vaccine on the way, I am certain things will get better.
SVH: In 2019, we were able to accommodate over 400,000 people within the museum. We know the first quarter will be challenging, but we are optimistic about where the year will end up. Currently, we are actively planning promotions and events for 2021, so stay tuned.
EB: For now, it is all about keeping the businesses afloat, employees retained, and cash in the bank. We are forecasting more of the same, if not a more restrictive environment in the next three months. We have been working under this assumption since April and will not broaden our outlook until we either see some substantial government relief or signs of a post-vaccine rebound.
CH: I think the outlook is bright. The vaccines are on their way and there are many therapeutics in use or soon to be. I believe we are seeing some light at the end of the tunnel.
How helpful has your landlord been during the pandemic? Have you been paying rent or a portion of rent?
NB: Our landlord at the Henderson location has been amazing. Very understanding and accommodating, and helped us to make it through the hardest part. Our landlord at the Southwest location wasn’t as helpful — not only demanding the payments in full while we aren’t able to use the premises as intended, but also raising the costs at the worst possible time. Just a word of advice to landlords: We are in this together. If we as a business don’t make it through this crisis, leasing the property in these times will be very challenging and expensive. Try to work with your tenants and we will all make it through. It is a lot more cost- and time-effective to work with your current tenant than replace them.
EB: From slightly helpful to Scrooge. One of our landlords appears to be honoring a straight percentage rent for the COVID period to date, but it is still being finalized. What we are hearing and experiencing almost everywhere is a three- or four-month rent deferment to next year. The deferment is really not helpful in the situation. It will delay the inevitable closure of many restaurants in the new year. Landlords are going to have a surplus of inventory by mid-next year.
CH: Our landlord hasn’t said anything either way. They haven’t helped us or hurt us. We are still paying rent.
AV: We are very lucky to have great landlords and we are working together during difficult times.
What could the government do for the restaurant industry?
EB: Congress should sign the RESTAURANTS Act proposed by the National Restaurant Association and the Independent Restaurant Coalition now. Loans will not help us; we need a relief package desperately; we are looking at a certain mass extinction in our industry if immediate action is not taken. The landscape will be shamefully different at the end of this crisis without relief.
NB: Our industry has been the most affected by this pandemic. We have the most restrictions and rules to follow while our ability to make money has been drastically reduced. Yet the government still wants us to pay all the bills in full. I am still expected to pay 100 percent of my licensing fees, business/fire permits, taxes, utilities, health permits, rent, payroll, unemployment — all of that and so much more while being allowed to only do 25 percent of business. This is not fair and not possible. We need help.
CH: Quit scaring people about restaurants and bars. There is simply no science backing up the thoughts of greater transmissions in our environments. None. These politicians are throwing darts and hoping they hit something. Stop it. And get together and find out how you’re going to compensate us for all of this. You have destroyed our industry and it’s time to make it right. We need a restaurant bailout and not just money to keep people employed. We need to make up all the revenue we’ve lost. We have bills to pay that aren’t going away forever, even if they’ve been delayed temporarily. We have debts to service. Failure to provide some real help will virtually guarantee almost certain death for most restaurants. It isn’t a matter of “if,” just a matter of “when.”
AV: Our local government is doing its best to make decisions for our citizens, and we will do our best to continue to support and adhere to all mandates we receive.
KH: The government really needs to think about the long-term damage they are doing to the restaurant industry. We need outright “income replacement” grants like they have in Europe. The government shut us down and they have a moral obligation to give us the support we need to be able to stay open and remain viable. The PPP loans were helpful and we need another round without the kind of restrictions that were imposed prior. All restaurants need help regardless of their size and the amount of sales they have lost. Our operating costs have increased to provide the sanitation and labor to make the dining experience safe, so we need some relief to offset this cost. We also have restaurants in North Dakota and the governor there has provided grants to offset the COVID expenses. Nevada needs to do the same.
What word best sums up how you’re feeling about the future right now?
NB: I am truly hopeful that things will get better in a few months. Maybe not back to normal just yet, but it can’t really get any worse.
EB: I’m very optimistic about the long-term future of Las Vegas. However, in the immediate, I’m tentative to say the least. Small businesses are not getting help fast enough and it’s devastating. There is no consistent guidance, the rules change by the day and there is no relief when they do. We have no way of knowing if restrictions will ease or become more stringent; our business and, most importantly, our associates have no security going into the holidays. For the long-term, we are cautiously optimistic — very cautiously — that post-vaccine, restaurants and hospitality will rebound, some quicker than others, but only for those who survive until then.