The decision to mandate vaccines among customers or not is on the minds of countless restaurants right now. Is this a dangerous line to walk? Is it an inevitable one? Are there possible benefits?
Since the onset of COVID, regulations have generally been enacted and enforced at the state and local level, and we don’t anticipate we will see a federal vaccine mandate for the restaurant, entertainment, and leisure industries. Rather, vaccine mandates will vary from region to region. Certain municipalities have been more proactive in mandating vaccines for indoor dining (New York, parts of California), while others have been more reactive, in response to the Delta variant.
Like any other COVID restriction, vaccine mandates will be a highly controversial decision, with a visceral reaction on both sides. However, the benefits likely outweigh the costs. While certain customers may react negatively, operational stability is critical to the economic recovery of the restaurant industry. This includes keeping staff safe and continuing to operate without further lockdowns or seating capacity restrictions.
The best way to do this is by taking the necessary steps and complying with federal, state, and local health ordinances.
If vaccinations do get mandated for indoor dining, like in NYC, what advice would you give restaurants trying to enforce them? As we all know, it was difficult enough to get some customers to wear masks.
Restaurant operators have been forced to walk a difficult tightrope over the last 18 months. COVID regulations have been complex and somewhat poorly communicated, the environment has become extremely politicized, and often front-line restaurant workers have borne the brunt of that anger.
Operators have adapted to a myriad of restrictions, including indoor capacity restrictions, social distancing, and mask mandates. They should lean on those past experiences to create an accommodating experience for all. That could include using newly created outdoor dining and offering to-go options for unvaccinated or noncompliant customers. Some may react negatively, but restaurant operators need to balance creating a welcoming and accommodating environment while complying with mandates.
More generally, what do operators and management teams need to be thinking about now as we potentially gear up for more shutdowns?
After the last 18 months, the country can’t afford another period of stringent lockdowns. The economy needs time to stabilize, and Americans are experiencing lockdown fatigue. Politicians and health officials will likely do everything they can, short of shutdowns, to stem the new wave of COVID. This includes vaccine and mask mandates.
Operators and management teams need to be prepared. We at Carl Marks have advised clients as follows:
Every management team should conduct a post-mortem assessment of the last 18 months, looking at what they know now that they wish they knew previously, what they would do the same, and what they would do differently.
This should translate to a documented “Action Plan” for future lockdown (and subsequent reemergence) scenarios including steps they can take in advance, steps they should take immediately after (a “100-day plan”), and how they will we react to a prolonged lockdown (sustainability/survivability/reemergence).
Key considerations to answer in building this action plan are:
1. What level of customer demand (foot traffic for in-person, to-go, delivery) should we expect? 2020 was unprecedented, and forecasting was next to impossible. This time around, there is at least empirical evidence to lean on (foot traffic, average check size, etc.)
2. What level of unit-level staffing can be supported? This depends on the anticipated length of a lockdown. Hiring and onboarding post-emergence has been a significant challenge.
3. How do you manage vendors and landlords? What about other creditors? Vendors and landlords have taken a beating already. Will they accept further concessions?
4. Do we have the liquidity necessary to survive and reemerge? What steps do we need to take along the way to ensure that answer is “yes?"