(see correction below)

By GARRY RAYNO, InDepthNH.org

CONCORD — The economic shutdown due to the coronavirus epidemic has been devastating to the hospitality and retail industries, a legislative advisory committee was told Wednesday.

The hospitality industry estimates it will lose $800 million through May, said Mike Somers, president of the NH Lodging and Restaurant Association, and many restaurant and hotels are likely not going to survive unless the economy reopens.

“This has been catastrophic for this industry,” he said, which will need “hundreds of millions of dollars to prop it up just to come out the other side.”

He, like several other business officials the Legislative Advisory Committee of the Governor’s Office for Emergency Relief and Recovery heard Wednesday, said it would be worse for the industry to reopen the economy too soon and have to shut it down again with another wave of infections.

“We will need a great deal of support from the state for marketing and promotion as we ease into the new normal,” he said. “Without marketing that restaurants are safe to dine in or hotels are safe to stay in, this could get very ugly and very long.”

Tom Boucher, president of Great NH Restaurants, Inc., which owns T-Bones, Cactus Jack’s and other eating establishments, told of reducing operations at his restaurants to take-out, but noted he still has significant expenses such as rent, insurance and utilities even after laying off many employees.

A previous version of this story said some of Boucher’s restaurants are closed and they are not closed.

Many restaurant owners will not be able to pay their property taxes when they come due July 1, Boucher noted.

He urged lawmakers not to entertain a suggestion from some other states to limit restaurant seating capacity to 50 percent as a method of social distancing.

“We have to reopen in a manner where we can at least break even,” he said, “not lose more money than we’re losing right now.”

Steve Duprey, who owns several Concord hotels including one yet to open, said most hotels in the city are closed and most expect it will take five to eight years for the industry to recover.

He said he does not expect to see a return to traditional activity until a vaccine is developed, likely the end of next year at the earliest.

Duprey suggested the state establish a $250 million loan fund for hotels and start from the “button up” that could be paid back over five to eight years and recycle the money for marketing and grants for the arts to continue boosting the economy.

He also said the money should go to New Hampshire based businesses with a majority of New Hampshire owners.

Sim Willey of Hart’s Turkey Farm in Meredith, said “this has been devastating to us and it is destroying our business.”

He said he has lost not only his restaurant’s usual business but also his catering revenue. 

“We need funding,” Willey said. “Our savings are gone and how many loans can you take on.”

Retail

NH Retail Association president Nancy Kyle told a similar tale of locally owned retail businesses suffering under the economic shutdown, adding that a number have already closed and will not reopen, particularly those without on-line sales.

New Hampshire does allow curbside pickup and delivery, which is better than other states, but she said the future “looks especially bleak” with the decline in retail sales in March. “The worst is yet to come,” she cautioned.
Business owners are concerned about their employees’ and customers’ health, she said, but some laid-off employees are making more on unemployment than they could make returning to work, due to the $600 a week federal stipend.

She urged caution in reopening the economy. “If you open too early, businesses may have to close again if there is second wave of virus,” Kyle said. “Retail businesses will not be able to continue with closing a second time.”

She said many businesses will not survive without help. “This is the time to shop locally,” Kyle said.

Construction and autos

Gary Abbott of the NH General Contractors, and Peter McNamara of the NH Auto Dealers Association, said their industries have not been as impacted as the hospitality and retail industries.

Abbott said there have been some supply issues and Vermont’s restrictions have delayed or slowed down some construction projects. There is a domino effect, he noted, and is concerned about the reduction in the highway fund due to a 40 to 50 percent reduction in the sale of gasoline.

He said the highway construction sector has been harmed less than the building sector, which he said is questionable.

“Unlike any other downturns we’ve had, stimulus (programs) always recognized construction would lead us out of the down side,” Abbott said. “What scares me most is if foreclosures start to happen. So much is at stake here.”

McNamara said there has been some impact on the auto industry, with some franchises reducing days and hours and employees, but some sectors like heavy trucks are doing well.

But he said the industry expects to sell 20,000 to 50,000 less cars, and will not bounce back for two or three years.

He said some dealers are going to remote selling, but people “like to kick the tires and do test drives, particularly for used vehicles.”

BIA

Business and Industry president Jim Roche said as the economy reopens, the state needs to establish very clear health guidelines for businesses large and small and across all sectors.

Some small businesses will need help coming out of the shutdown, he said, and suggested the state cover the cost of safety upgrades and testing equipment needed to reopen.

“A growing concern is workplace liability,” Roche said, and what happens if an employee is told to go home but doesn’t and infects fellow workers.

Roche also urged lawmakers not to raise the business enterprise and profits tax rates as would happen under the current budget law because state revenues will be significantly below targets.

“That would be highly counterproductive in the current environment,” Roche said.

The advisory committee meets again Friday at 1 p.m. to hear from educational institutions and non-profits.

Garry Rayno may be reached at garry.rayno@yahoo.com

Correction: A previous version of this story said Tom Boucher, president of Great NH Restaurants, Inc., which owns T-Bones, Cactus Jack’s and other eating establishments, told of closing a number of his restaurants. His restaurants are not closed. They are open to take-out only.