Bar and restaurant owners Paul and Pat Ryan have mastered the art of survival through the decades.
Their grandfather, who started the family business in 1908, stayed afloat through the Spanish Flu and Prohibition. Their father navigated Smokey Joe’s and Ryan’s Pub in Pennsylvania through the economic downturn following 9/11 and the Great Recession.
Nearly 10 months into the coronavirus pandemic, the Ryans face the toughest hurdle yet in their storied business as the weather cools and restaurant patrons balk at eating outdoors.
The Ryans spoke to Yahoo Finance Live on Monday, a day after President Donald Trump signed a long-awaited $900 billion second stimulus bill that includes $284 billion in forgivable loans to small businesses under the Paycheck Protection Program (PPP).
“The first round of PPP was critical for us to stay open and keep people employed. Now that most of the first round has gone away [the second round of stimulus] is really, really critical because that'll help us get through the next few months which are winter months, and hopefully get us to March and the beginning of April,” Paul Ryan said. “Right now the critical factor that's hurting us is the weather. It's just too darn cold outside, and it's going to be cold outside for the foreseeable future.”
‘A roller coaster ride’
The Ryans have heavily relied on government funding to keep their four restaurants afloat, though they admit their situation is made easier by the fact that they own the real estate in three of their locations, eliminating rental costs.
When Pennsylvania halted in-door dining in mid-March, business plummeted, slashing the Ryans’ revenue by 98% in the initial weeks. Since then, Pat and Paul have drastically downsized their operations, reducing their 100 employee workforce, and largely relying on delivery and takeout orders to pay the bills. While business picked back up in the summer months, restaurant sales now are just 15% of what they were, pre-pandemic at best, they say.
“It has been a roller coaster ride because we started out in these different phases. We were able to survive with outdoor dining and 50% of inside dining, but then they restricted the hours that you could be open from two o'clock back to 11 o'clock, which hurt a lot,” Paul Ryan said. “It’s absolutely critical that [Trump] signed that bill. We need to [get the stimulus] out and get the money to the businesses before more restaurants closed down.”
The National Restaurant Association estimates more than 110,000 restaurants have closed permanently or long-term nationwide since the pandemic began. Those still operating are in “economic free fall” as they face renewed coronavirus-related restrictions brought on by the latest surge, according to the organization. Nearly 90% of full-service restaurants reported revenue declines of 36%, on average, the trade group says.
The Ryans have now reduced operating hours to just 5 days a week at their West Chester, Pennsylvania, store, while their bar in Phoenixville has been scaled down to a minimum take out food and drink menu. Their two other restaurants, Smokey Joe’s and Ryan’s Pub Manayunk, remain shut down indefinitely, because of COVID-19 restrictions in Philadelphia.
“I think we've learned how to staff and downsize our operation so that we can get by...we've been fortunate with the PPP and I think we’ve minimized losses,” Pat Ryan said. “We’re not in a horrible position but, it can't go on forever, obviously.”
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita