The Reason Restaurant Reopenings Have Not Drawn Customers

People are paying attention to the news and drawing their own conclusions about what behavior is risky and what is not.

And so far, the data suggest they believe that restaurant dining is not yet safe. JL

Jordan Weissmann reports in Slate:

At restaurants that use OpenTable, the number of diners in every state where the company tracks data was still down by 82% or more through Sunday. Many restaurants have chosen not to open due to restrictions because they don’t think it will be profitable. (But) from OpenTable’s numbers to consumer spending figures to mobility data, Americans started staying home before governors started ordering shops and restaurants closed. State responses didn’t cause the economy to collapse. Fear of the virus did. And until people feel safe again, they aren’t going out to eat.

At this point, a number of states have begun lifting stay-at-home orders and allowing nonessential businesses to reopen, with the hope that they can start thawing their economies even if the coronavirus hasn’t been fully contained.

But the defrosting process seems to be going slowly—at least if you judge by the number of people brave enough to eat out. At restaurants that use OpenTable’s booking software, the number of diners in every state where the company tracks data was still down by 82 percent or more through Sunday, compared with a year before. That includes early reopeners like Georgia (down 92 percent), Utah (down 91 percent), Nebraska (down 90 percent), South Carolina (down 89 percent), Tennessee (down 87 percent), Texas (down 83 percent), and Oklahoma (down 82 percent).

Jordan Weissmann/Slate

There are a few reasons restaurant bookings are worth paying special attention to at the moment. For starters, the food and beverage industry alone lost more than 5 million jobs last month, and until it rebounds, the wider labor market won’t get back to full health either. Dining out is also a good bellwether for people’s willingness to live regular lives in which they spend extended periods of time indoors around other living, breathing human beings. If what we’re seeing in Texas, Georgia, and elsewhere is any hint, we’re headed for a gradual return to normalcy, not an instant, V-shaped bounce-back.

Not every restaurant in America uses OpenTable. But its data might be the best real-time source of information we have on the industry. It tracks sit-down diners—including people who make online and phone reservations, or just walk in—at a sample of 20,000 restaurants that provide the company with information on all of their openings. During the early stages of the crisis, OpenTable’s numbers were a useful leading indicator that warned economists and journalists about how COVID-19 was convulsing the economy: The industry crash it picked up in real time during March foreshadowed a wider, national decline in consumer spending and small-business revenue that followed about a week later, as Harvard’s Opportunity Insights project has since documented. 

The slightly glib way to sum up OpenTable’s numbers is that, at this point, Americans clearly don’t think it’s worth dying for a decent plate of pasta. But there are some important nuances to keep in mind.

One important reason that restaurants aren’t full yet in states that have started reopening is that, well, they’re not allowed to be. In Georgia, dining places are only allowed to seat 10 patrons per 500 square feet. In Texas, they can only operate at 25 percent capacity in counties that have recently had more than five coronavirus cases; in Tennessee they’re limited to half-capacity. Many restaurants have chosen not to open at all due to these restrictions, because they don’t think it will be profitable. Or they’re just sticking to takeout.

Meanwhile, some states are opening in stages, so all of their restaurants haven’t necessarily had a chance to welcome guests. In Tennessee, dining rooms started opening back up on May 1. But Nashville only joined in on Monday. In Florida, restaurant attendance is likely still down 89 percent because stay-at-home orders remain in place for the massive Miami and Palm Beach areas. (Which is why I didn’t include Florida on the graph above.)

All that really tells us, however, is that under any realistic plan to reopen a state, restaurants won’t see an instant recovery, which means that—unless we want our future dining options to be limited to Olive Garden and Buffalo Wild Wings—they will likely need more government aid sometime soon. Also, it seems pretty obvious that lots of residents in these states are still worried that eating out will get them sick.

This is bad news for Republicans in Congress and the White House, who seem to be betting that they can engineer a quick economic recovery in time for November’s elections without passing another big round of relief spending, much less having a coronavirus vaccine or treatment (or much of a federal pandemic response whatsoever). Instead, they’re urging states to reopen for business whether the coronavirus has been properly contained or not. This plan has always seemed doomed to failure. Every bit of data we have, from OpenTable’s numbers to consumer spending figures to mobility data, tells us that Americans started staying home and the economy began folding in on itself before governors started ordering shops and restaurants closed and telling people to stay put at home. As more formal economic analyses are already confirming, state responses didn’t cause the economy to collapse. Fear of the virus did. And until people feel safe again, they aren’t going to do things like go out to eat.