Trying to survive the COVID-19 pandemic has been difficult for many in the restaurant industry, especially for small and individually-owned businesses. Amid the enhanced community quarantine and evolving government policies, restaurants have had to come up with creative ways to keep the business afloat throughout the month-long quarantine, which includes pivoting to contactless delivery and takeout, revisiting business models or selling products directly from home. However, these efforts alone may not be enough to curb the grim effects of the coronavirus pandemic.
Gelo Lopez Guison, the head of PR and marketing of the Hotel and Restaurant Chef’s Association of the Philippines, believes that the best thing to do now is to wait the quarantine period out as it’s better to not operate at all than to operate at a loss but also acknowledging the fact that the industry can take this time as a rallying point for unity.
“The industry needs to come up with a proposal to the local government units and government agencies on an omnibus assistance stimulus package that would help the restaurants re-open after the pandemic,” he says. “This stimulus package can include rent relief for the duration of the quarantine, reduced tax payments and a financial aid to cover losses.”
However, those who run the business daily mustn’t be left out, too. Rommel Hinlo, executive chef of Kuppa Roastery and Café and Ilonggo Food Company, says that the most important thing that their business has had to consider is the plight of their employees. He calls on the government to provide tax breaks and emergency benefits to alleviate some of the burden that employees may face during the quarantine. “These can help augment their take-home pay to have more money for provisions, as prices of goods have inflated. Emergency benefits would be important as this could augment our employee expenses.”
“The industry needs to come up with a proposal to the local government units and government agencies on an omnibus assistance stimulus package that would help the restaurants reopen after the pandemic,” Gelo Lopez Guisin says. “This stimulus package can include rent relief for the duration of the quarantine, reduced tax payments and a financial aid to cover losses.”
Since the announcement of the enhanced community quarantine, Villarica has been regularly checking on his employees, firm in his belief that a business’ goal is to help each other. “[I give them] assurance that we will help them in whatever they need right now.”
Call for systemic change
Businesses, however, cannot enact change on their own. For an industry that relies heavily on partnerships with distributors and suppliers, an extensive and clear economic policy must also be put into action.
“A comprehensive policy to guide us on how to navigate through these hard times will be ideal,” Paul P. Perez, managing partner of Papa Diddi’s Handcrafted Ice Cream and The Breakfast Store, says. “Call it a modern-day ‘Marshall Plan’ where the whole ecosystem will be considered—from the supply side to the demand side, and everything in between. Though I understand that there is so much confusion as we have not encountered anything like this before, a comprehensive package, devoid of bureaucratic nuances will go a long way.”
Hinlo also considers a long-term approach that encompasses most of the restaurant industry’s partners. “We have to work from the ground up. Compared to our Southeast Asian neighbors, our raw materials are one of the most expensive in the region, probably second to Singapore.
“A comprehensive policy to guide us on how to navigate through these hard times will be ideal,” Paul P. Perez, managing partner of Papa Diddi’s Handcrafted Ice Cream and The Breakfast Store, says. “Call it a modern-day ‘Marshall Plan’ where the whole ecosystem will be considered—from the supply side to the demand side, and everything in between.”
If we have a stable supply of agricultural products, prices would be more stable and we would be less prone to price shocks when extraordinary events occur. This will, in turn, lower costs both in the industry and the cost of living for our workers. The extra money that they will save will hopefully allow them to have more leeway in times of crisis.”
As a collective, many are looking at the end of this quarantine—and pandemic—as an opportunity to begin working on resolutions for the worrying aspects of the industry that have come to light.
The Fatted Calf executive chef Jayjay SyCip who is still reeling from the full brunt of the Taal Volcano eruption earlier this year thinks that it’s important for the Department of Labor and Employment to create a calamity fund that would give both employees and employers shock absorbers.
“We are at a point where we are in need of tax relief for the whole year to be able to revive the business as well as deferred rent payments to be able to hit the ground running,” SyCip says, adding that government partial subsidy for raw materials can also help keep the economy of the F&B and hospitality industry afloat and running. “If financial companies are given stimulus packages to keep businesses afloat why can’t the F&B industry not be given the same privilege?”
Knowing that the industry is built on employees who hardly have any social and financial safety nets, SyCip also proposes that healthcare should become an even bigger priority moving forward. “PhilHealth should be able to increase coverage for industry workers and for HMOs to create a package more affordable to business owners so that even janitors and dishwashers can be provided with proper HMO.”
This crisis will bring about new business models like investments in online trade, better safety nets for all employees and better supply chain management. But, he warns, efforts from the industry are futile if the government doesn’t review and reconsider their existing policies on employment and mass transport.
The pandemic will certainly be a turning point for the industry, its partners and stakeholders to consider improvements to the system. Guison breaks these down into two.
“From a service point of view, there will be a higher public demand for hygiene and cleanliness in the restaurants. Restaurants need to proactively show and communicate a stronger protocol on hygiene and food safety. Have their staff go through certifications such as ServSafe or Foodshap.”
And from a business perspective, he continues, “it’s now important more than ever to set aside a percentage of the profit for business continuity. A fund that will only be utilized in times of calamities and crises. Also, those who are thinking of putting up a physical shop might want to consider cloud kitchens. The market of food delivery will definitely grow in the coming years. Cost-cutting will be drilled to everyone as soon as restaurants reopen. I think it is prudent to look for direct suppliers and avoid middlemen and additional costs.”
Perez agrees, saying that this crisis will bring about new business models like investments in online trade, better safety nets for all employees and better supply chain management. But, he warns, efforts from the industry are futile if the government doesn’t review and reconsider their existing policies on employment and mass transport.
“These policy changes should become the white paper in crafting new business models, and I hope all points are taken into consideration, ushering a new age to allow SMEs to flourish versus limiting SMEs.”
Whether or not these ideas are already being considered behind closed doors by the national government remains to be seen. But one thing is certain: Bold and boundary-pushing choices are necessary to secure the future of the industry.
Subscribe to our weekly newsletter to receive all the tools and solutions entrepreneurs need to stay updated on the latest news in the industry