Why ‘Dining Out’ Is About To Become A Much More Literal Term

Memorial Day weekend is upon us – which means here in the United States, summer is officially setting up to begin. Sort of. With the outbreak of an international pandemic, our summer plans have been rather modified, as consumers seem to be considering what the safest summer plans might be, and opting to tread a bit differently than they have in the past.

As PYMNTS previously reported, the Great American road trip seems set to make a resurgence, and consumers are increasingly nervous about any travel plan that involves sitting on an airplane with strangers. And as it turns out, Americans’ willingness to be seated next to strangers just about anywhere has been one of the biggest questions during the reopening of the economy that is now underway (in some form or another) in all 50 states.

Yes, stores and restaurants are reopening, beauty parlors are allowed to take appointments and consumers are preparing to get back out there as the summer season is poised to take off.

But will the customers go out?

That is the $22 trillion question attached to the phased economic reopening – whether or not consumers en masse will return to something like the old world of physical commerce, after having spent the last eight weeks at home, reorganizing their lives around digital channels.

According to PYMNTS’ most recent consumer survey, there are some valid reasons to believe that some large and valuable demographics might opt to hold off on getting back out there.

Enthusiasm for re-entering a possibly contaminated world isn’t terribly high among millennials, bridge millennials and Gen Xers, many of whom have shifted to digital habits over the last eight weeks or so – and plan to keep it that way, instead of transitioning back to the real world. And the trend is even more visible among more affluent, free-spending consumers: Among those who said they plan to stay online during the recovery period, 38 percent reported earning over $100,000 per year.

So how to get consumers back out there? According to the experts PYMNTS has talked with over the last several weeks, the race these days doesn’t go to the swift – it goes to the safe. And it goes to the places and service providers that make customers feel safest when they choose to physically interact.

Which is why, for the rest of the summer, finding parking at one’s favorite eatery might be a new challenge for those diners who are motivated to actually eat out. Because parking lots are finding a whole new usage by the restaurants they serve: Instead of providing a place to park cars, they’re now a place to park customers – and serve them dinner.

How the Parking Lot Became a Dining Spot

In Tampa, Florida this summer, restaurateurs are being encouraged to offer more outdoor seating options for consumers, supported by a new pilot program that gives owners more flexibility in utilizing the surrounding sidewalks, streets and parking lots. The goal of the program is to allow restaurants to expand their service offerings while respecting social distancing rules (which require keeping tables six feet apart) and adhering to limited-capacity laws. By adding the parking lot to their countable capacity, restaurants can immediately welcome more guests.

“It was a losing proposition,” Tampa restaurant co-owner Jeff Gigante told CNBC of the indoor restrictions they initially faced in their home state. “[The pilot is] a lifesaver for us.”

The pilot in Tampa is not unique: In Cincinnati, Atlanta, New Jersey, Massachusetts, California and Connecticut, local governments are trying out arrangements to allow restaurants to reclaim space not normally used for serving customers to make reopenings possible. In Connecticut, Gov. Ned Lamont issued an executive order to allow for outdoor dining.

“If we’re going to continue our great renaissance as a city, we’re going to have to open up more streets and public space to restaurants or … they’re not going to survive,” said Cincinnati Mayor John Cranley.

Will Reclaiming the Parking Lot Help Restaurants Survive?

Among the few points of universal agreement is that socially distanced dining isn’t a cost-effective option for a majority of establishments. With dining rooms limited to as little as 25 percent up to a general max of 50 percent, the economics simply don’t work for most restaurants, which are low-margin businesses to begin with.

Too low-margin, in many cases, as big-name restaurateurs have elected to put off their grand reopenings until a solution such as a vaccine allows them to operate more normally.

“We won’t be welcoming guests into our full-service restaurants for a very long time – probably not until there’s a vaccine,” Union Square Hospitality Group Founder and CEO Danny Meyer told Bloomberg. “There is no interest or excitement on my part to have a half-full dining room while everyone is getting their temperature taken and wearing masks, for not much money.”

Union Square Hospitality Group runs 19 restaurants in New York City – including the QSR Shake Shack chain, which can run remotely indefinitely.

Other businesses, like Tampa’s Forbici Modern Italian restaurant, have to reopen at some time in the near future or may never reopen at all. And trying to open at a quarter or half their regular capacity is simply not economically feasible, Co-owner Jeff Gigante explains.

“Running a business at half capacity gives you half revenue – and you still have to staff it as if you’re at full revenue,” he explained.

But the ability to place tables on the street in front of his establishment means they can keep their restaurant open at close to normal capacity – which means reopening enters the realm of economic possibility.

Tampa’s pilot program and the addition of those tables was initially set to run for the next two weeks, but will continue in a modified form, Tampa Mayor Jane Castor said in an interview. The program essentially suspends city code and permit requirements pertaining to outdoor dining, making it easier for restaurants to start offering it.

Cincinnati had a similar variation of the expansion of outdoor seating, which allowed restaurateurs to apply for a fast-track permit to set up temporary outdoor tables for reopenings last week. Indoor seating began this week under social distancing guidelines.

Will Outdoor Dining Bring Back Reluctant Consumers?

As is often the case with data bout the novel coronavirus, much remains unknown about how much difference eating outside will make to its transmission between people. Early studies examining Chinese outbreaks seem to confirm that outdoor dining is less conducive to the spread than eating indoors.

Dr. Jonathan Temte has noted that while there is no proof that eating outdoors is more effective at slowing the spread of the disease than eating indoors, there are many “supporting concepts” around other viruses that lead him to believe the transmission risk is lower in open-air environments – as long as people take precautions, like maintaining social distancing guidelines.

“It has to do with the proximity to other people and the time that you’re in that proximity,” he said.

In a related concern, various critics have noted that eating outside encourages people to start forming crowds. Tampa’s Mayor Castor notes that unless outdoor eating is carefully monitored, it could potentially turn into a problematic issue.

“We can’t have people congregating, waiting on a table. They need to know where they’re going and what time they’re going,” said Castor, adding that the city also has a policy of “no seat, no service.”

Apart from issues with enforcing social distancing, even as diners move outside, Mike Whatley, vice president of state and local affairs for the National Restaurant Association, noted that at best, outdoor eating is a temporary and highly seasonal solution to restaurateurs’ issues.

On its own, it won’t be enough to lift the struggling industry – which has seen nearly 5.5 million lost jobs since April of this year – out of its various difficulties.

“With summer comes thunderstorms and extremely hot weather, and many restaurants may not currently have the equipment for umbrellas or outdoor seats,” Whatley said. “There are some who are doing it, and it’s great. But this is by no means a cure-all solution that’s going to fix all the industry’s woes.”

At best, he noted, the ability to more easily expand outside has been a temporary “lifeline to operators,” who Whatley said will likely end up needing more government assistance at the federal and local level to weather the crisis.

But while operators are waiting on the government to decide whether more assistance will be sent, the ability to allow their customers to eat outside has allowed them to serve up something in person that’s been lacking for almost two months: a feeling of safety while dining outside their homes. That feeling, noted Forbici’s Gigante, will be invaluable as his restaurant tries to put its pieces back together.

“People all want to sit outside,” he said, noting that the ability to get what they want is what will ultimately make the consumer comfortable enough to dine out again.