Kaua’i, Maui and Hawai’i counties allowed restaurants to open June 1, with social distancing protocols in place, including requiring face masks until diners are seated. O’ahu eateries are reopening today and restaurant industry insiders say factors crucial to their success are not under their control.
Neighbor island newspapers report it has been up and down for restaurants, with dining-in offered all this week. Greg Maples, incoming chairman of the Hawai'i Restaurant Association, expects less than 40% or 50% of the restaurants that are closed will reopen.
"What keeps me up at night are the decisions these folks are having to make on a daily basis. Whether to stay open, whether to close, and in some cases, some of them will end up closed and bankrupt."
Maples, who owned and ran 80 Sonic Drive-Ins on the mainland, says profit margins there are around 20%. In Hawai'i, restauranteurs are looking at a 5% to 8% profit margin, largely because of the cost of land.
"A food truck lease on the North Shore is going to be a lot different than downtown Waikiki. I have friends in the association who are paying $30,000 to $35,000 dollars a month in rent."
"I can tell you, in all of my day, I think the most rent I ever paid on the mainland was probably around $12,000 a month. Here, $12,000 a month depending on where you're at, is pretty close to entry level."
Maples says most restaurants that were able to pivot to takeout still lost around 80% to 85% of sales. He estimates less than half of restaurants in Hawai'i got any COVID-19 relief funding.
"Right now, Hawai'i is not feeling the real brunt of this because of the unemployment $600 Plus Up from the federal government," Maples says. "That $600 Plus Up has been a real blessing for so many people, and I'm not against that. It expires on July 31st; we hear rumors it might get extended until the end of the year. I'm not for that."
"As restauranteurs, we're now opening trying to bring people back to the restaurant," says Maples. "They don't want to come back. We gotta make sure they make as much money as they were on unemployment or they're gonna say, 'Wait a minute, I'm working and doing my best and my buddy is on unemployment making twice as much as me and he's going to the beach every day.' The answer to that is, open the islands to tourism."
Maples contends visitors are essential to profitability for most restaurants, certainly at Pounders, the Polynesian Cultural Center restaurant. Maples has been director of restaurant services there since 2016 and in the food business for 34 years.
Re-engaging employees is one problem, anticipating demand is another, says Roy Yamaguchi, founder and chef of Roy's restaurants. His food businesses range from resort fine dining to cruise ship operations. During the pandemic, the neighborhood Roy's in Hawai'i Kai has fared the best. As for recovery?
"Maybe it'll take time, or maybe it'll be faster than we think. The bottom line is that depending on how the customers react when we do reopen, the restaurant's going to have to work with landlords, and the landlords are going to have to work with bankers. Everybody has to pull through and work as a team."
Yamaguchi predicts efficient takeout will be a key component to profitability going forward, especially now, when dining in is reduced about 50%. He says most restaurants have to do 80% capacity to break even.
"At the end of the day, we all love to create, we all love to find solutions we're not there to put our heads down and quit. That's the kind of people in the restaurant industry. We're not going to go down without swinging hard."
Roy's Hawaii-Kai, Roy's Ko Olina and GOEN in Kailua are set to open next week. Yamaguchi hopes to reopen the remaining seven food establishments in his group sometime between July 1st and October 31st.
Neighbor islands have had diners wait in their cars until their reservations, masks are worn except at the dining table. Expect these and other precautions as O'ahu opens to dining in today.