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State eateries not faring well, see little light at end of tunnel, survey finds

by Andrew Moreau | December 13, 2020 at 2:18 a.m.

Revenue and employment in the hospitality industry, primarily hotels and restaurants, have declined sharply this year with the spread of the coronavirus.

More details on how the Arkansas restaurant industry is coping with the pandemic emerged last week. Not well, according to a survey by the Arkansas Hospitality Association in cooperation with a national trade association.

The association reports that many restaurants -- which were restricted to 66% occupancy last week under pandemic rules -- are making significantly less money than they did a year ago, and owners are pessimistic about the future as their profit margins are squeezed. About one in every three is considering closing as covid-19 continues to spike in Arkansas.

The state association polled restaurant owners in conjunction with a survey conducted by the National Restaurant Association. The survey was held Nov. 17-30.

Findings revealed that 84% of Arkansas restaurant operators say their total sales volume in October was lower than it was in October 2019, declining 28% on average.

Even more troubling: while sales fell, costs increased. Nearly three of every four restaurant owners said total labor costs, as a percent of sales, are higher than they were before the pandemic. Only 15% of restaurants reported lower costs.

Under those conditions, 85% of Arkansas' restaurant operators said profit margin is lower than it was before the spread of the virus.

Most restaurant operators said business conditions will likely continue to decline, and 64% of the owners in Arkansas expect sales to continue decreasing over the next three months.

The owners also said that financial support from the government is vital for them to survive.

"With business conditions deteriorating, more federal government assistance is critical for the survival of many restaurants," the Arkansas association said in a news release.

And, as sales drop, so does employment. The industry has lost nearly 15,000 jobs in the state from a year ago, according to the latest jobless statistics from October. And the U.S. Restaurant Association reports that unemployment in the industry is at 15%, double the national unemployment rate.

Those losses are reflected in survey responses from the eateries.

They reported overall staffing levels remain well below normal, and 79% of Arkansas operators say their current staffing level is lower than what it would normally be in the absence of covid-19.

And the job losses are projected to continue. About 38% of Arkansas operators expect staffing levels to decline in the next three months while only 2% expect staffing to increase over the same time period.

BROADBAND ODDITY

Who could have guessed that the company with a goal of delivering humans to Mars would be involved in taking high-speed internet to some of the most uninhabited areas of Arkansas?

Well, it's happening.

Space Exploration Technologies Corp., commonly known as Space X and founded by Elon Musk, has been awarded more than $11 million from the Federal Communications Commission to connect rural Arkansans in 54 counties to the world at large.

SpaceX was one of the winners announced last week in a broadband auction conducted by the Federal Communications Commission, which said its rural connectivity initiative will take high-speed Internet to more than 388,000 Arkansans who otherwise would not receive the service because it is costly to deliver. The FCC is investing more than $424 million in Arkansas and $9 billion nationally to subsidize broadband build-outs.

SpaceX's private investments, in partnership with NASA, have helped revive the U.S. space program, and the company's commercial rocket launches have sent astronauts to the international space station.

Musk, who also helped commercialize the electric car industry with Tesla, is the founder and chief executive officer of SpaceX and has a stated goal of colonizing Mars. The company is developing the Starship, a spacecraft designed to reach Mars.

So far, the effort hasn't been successful. The most recent launch test conducted last week ended in failure when the rocket exploded when attempting to land.

CHAMBER ANNUAL MEETING

The Little Rock Regional Chamber of Commerce is offering various viewing options for its 155th annual meeting from noon-1.30 p.m. Thursday. The meeting will highlight economic development accomplishments this year and look ahead to 2021.

University of Arkansas Athletic Director Hunter Yurachek is the featured speaker. He will be interviewed onstage by Steve Sullivan of KATV-Channel 7.

The chamber is encouraging watch parties, with costs ranging from $50 for individuals, $750 for a party of 10, and $1,250 for the chairman's circle watch party, which includes one seat in the studio for the live event and a catered lunch. The other pricing options include free lunch delivery.

More information is available at littlerockchamber.com.

NEW NEIGHBORHOOD

Bear Den Estates, promoted as an environmentally friendly project, is scheduled for residential development in the Chenal Valley area. The 80-acre tract was sold for nearly $1.2 million to an investment group led by Drew Holbert and Bradford Gaines of Colliers International of Arkansas.

The master-planned community on Gordan Road borders Chenal Valley, and homes will be built within Bear Den Mountain nature preserve and will feature hiking trails and community-gathering spots. Initial plans include more than 100 residential lots that will be developed in four phases beginning early next year.

"Bear Den Estates will offer residents a unique opportunity to live in a beautiful, natural setting in the heart of west Little Rock," Gaines said.

PANDEMIC SUPPORT

Still suffering financially from the coronavirus?

Business owners looking for additional financial support can take advantage of two free webinars this week to learn about available aid.

From 2-3 p.m. Tuesday, you can learn more about federal assistance available to address supply-chain challenges and other problems created by the pandemic.

Edward Haddock, head of the Arkansas office of the U.S. Small Business Administration, and Rudy Ortiz of Arkansas Manufacturing Solutions, will lead the discussion. Officials with the Arkansas Small Business Technology and Development Center also will participate.

Register by emailing ccausey@arkansasaerospace.com.

Details on state economic support will be available at 10 a.m. Thursday during a workshop conducted by the Arkansas Economic Development Commission.

Community and economic development leaders across Arkansas can learn more about applying for grants from the state agency, which has financial aid available through funding provided by federal coronavirus legislation.

State grants can support cities and counties that need money for public works and public facility projects. Money is available to support projects such as residential water and sewer, drainage, streets and roads, child care centers, battered spouse shelters, child advocacy centers and facilities for severely disabled adults.

Grants ranging from $75,000 to $1 million are available. Details are available at arkansasedc.com/grants.

Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at amoreau@adgnewsroom.com or at 501-378-3567.

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