November 19, 2020REGION — New Hampshire restaurants and lodging properties voice concerns about sustainability as winter approaches and the number of positive COVID-19 cases rise in the state. According to NH Lodging and Restaurant Association President Mike Somers, the next three to five months will be the most critical.
In August, the crowd-sourced hospitality review app Yelp released a report estimating nearly 450 NH businesses closed between March and July. While some closures were temporary, the majority were permanent.
In September, the American Hotel and Lodging Association released a report on the state's lodging industry. The document estimated that Congress's failure to pass another stimulus package like the Paycheck Protection Program would result in the closure of 233 of New Hampshire's 348 hotels. AHLA also predicted that two-thirds of the state's hotels would go into foreclosure, echoing national trends.
In a recent conference call with New Hampshire hospitality leaders, Sen. Jeanne Shaheen stated, "We were hoping that after the election, there would be an opportunity for a new round of negotiations and an additional package of assistance to help with COVID that would be especially targeted for some of the industries like hospitality and entertainment that have been hardest hit. We need to make sure that everybody understands just what the situation is, and what could happen if we don't get some additional assistance."
Industry leaders also anticipate dramatic revenue decreases during the holiday season with reduced travel and restaurant patronage. Last week, the AHLA predicted that 79 percent of Americans chose not to travel at Thanksgiving, while 69% opted to stay home for Christmas.
Somers discussed the gravity of the situation at the state level. He said, "As we see rising cases in all the states around us and to some degree in New Hampshire, there's a great deal of concern there will be further restrictions."
The NHLRA leader continued, "Most businesses are lucky if they are at break even right now. There is likely going to be resistance by customers that come out and visit our restaurants. It's going to create a compounding issue in the industry. If we legitimately want to see the industry survive in a meaningful capacity, we're going to need this next round of relief."
According to the AHLA, business travel has been even more impacted by the pandemic, with only 8 percent of Americans reporting an overnight business trip since March. Firefox Property Management President Steve Duprey discussed a growing concern for the NH hotel properties that rely on business travel.
Duprey estimated that business travel would not likely return to normal until at least 2023. He said amendments to long-term debt financing would be critical for survival, as many business market hotels were financed with collateralized mortgage-back security.
"Even though we've been fortunate and built up a lot of liquidity, it will not be enough for us," he noted.
Great NH Restaurants CEO Tom Boucher reported a successful third quarter but said the restaurant industry needed help as well.
He said, "The only reason we did well was because of outdoor dining, which comprised about 35% of our revenue. Right now, we are down 30 percent at every location, and I'm not surprised because we lost our outdoor dining."
Boucher said he anticipated 2021 to be as bad as this year has been for the restaurant industry.
"It's going to take at least another year before people get comfortable coming back out to eat," he stated.
According to Great NH Restaurants owner Jay Bolduc, the impact of low restaurant patronage this winter would be catastrophic to the nation's economy.
He said, "The restaurant industry is the second-largest employer in the nation. You're not going to lose a place to go out to eat. You're going to lose the entire economy."
Shaheen is pushing the passage of the HEROES Small Business Lifeline Act, a bill that would provide over $370 billion to vulnerable small businesses, restaurants and live venues. If passed, it would allow many companies within the industry to access a second round of PPP loans. Thus far, the PPP program delivered over $2.5 billion in assistance to more than 25,000 businesses across the state.