Downtown San Antonio restaurants navigate low tourism, financial losses

by Brigid CooleySeptember 30, 2020
Diners seated on the outside patio along the Riverwalk at Casa Rio Sept. 24, 2020. Photo by Victoria Martinez
Dining groups are socially-distanced along the River Walk at Casa Rio. Photo by Victoria Martinez | Heron contributor

Downtown restaurants, especially those on the River Walk, continue to take a financial hit during the pandemic due to low tourism and new social distancing protocols.

Although Texas Gov. Greg Abbott loosened restrictions beginning Sept. 21, allowing restaurants to reopen at 75% capacity, businesses are finding they must sacrifice seating space in order to create socially-distanced dining rooms.

“Once you start seriously socially distancing your tables, that means removing a large portion of the seating capacity,” said Terry Corless, CEO of Mad Dogs Restaurant Group. “We’ve lost more than 50% (of seating). So if the governor says you can go from 50% to 75%, it’s negated by the loss."

Mad Dogs Restaurant Group is composed of well-known establishments Maddy McMurphy’s, Mad Dogs British Pub, Bier Garten Riverwalk and On The Bend. Because of their large alcohol sales, the restaurants were categorized as bars during the government mandated shutdown.

Food establishments are classified as bars if over 50% of sales are made from alcohol, otherwise known as the 51% rule. Because they cater to late-night crowds, the Mad Dogs restaurants’ liquor sales exceed the percentage despite making over $1 million in food sales. Loosening previous restrictions in late August, the Texas Alcoholic Beverage Commission (TABC) began allowing bars to reclassify as restaurants by increasing their food sales.

On Sept. 22, all of Corless’ restaurants received approval to reopen, and are now required to only sell alcohol when combined with a food order, to keep liquor sales below 50%. Having to limit these sales results in less profitable workdays, making it difficult to pay rent and other operating costs, Corless said.

“We’ve had very little or no assistance from landlords in terms of our long going obligation to pay rent,” Corless said. “We’re some of the highest real-estate rent in San Antonio being on the River Walk.”

The Mad Dogs restaurants have been serving guests at 10-15% capacity on weekdays while having to turn diners away on weekends to keep their dining areas properly socially distanced and below capacity, Corless said.

For The Republic of Texas, a family owned and operated restaurant, the tourism downturn has resulted in steep losses.

"Ninety percent of our business is made on tourism and conventions; it’s not locals,” said owner Will Grinnan, whose father Rick opened the River Walk staple in 1975.

Before the pandemic, people visiting The Republic of Texas and other River Walk restaurants had to weave their way through crowds of diners and pedestrians. Now, the sidewalks are mostly empty while the patios of some riverfront eateries, like Boudro’s Bistro, are closed until further notice.

“It’s a scary, eerie situation down here: People are not walking around and we’ve seen businesses open up and then have to close back down because there’s just not enough revenue,” Grinnan said.

The Mad Dogs restaurants and The Republic of Texas received funding from the Federal Paycheck Protection Program (PPP), a federally-funded coronavirus relief program allowing small businesses to apply for loans to keep staff employed. As of Aug. 8, businesses are no longer able to apply for these loans. Politicians and small business owners across the country are calling for a second round of PPP to continue the aid.

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Grinnan said the PPP funds The Republic of Texas received made it possible to keep them open. However, they continue to struggle to make a profit and keep their staff, which has shrunk from 95 to 24 employees as of Sept. 25. In addition to payroll, restaurants must pay for personal protective equipment (PPE), operational costs and rent. Without crowds downtown, restaurants will not be able to pay their bills, Grinnan said.

“We have to get the convention center back open and we have to get airplanes back in the air, people traveling,” Grinnan said. “Without that (the River Walk) may not survive.”

Last week, the Women of Joy conference was hosted at the Henry B. Gonzalez Convention Center, the first large event since March. Most events on the convention center’s 2020 calendar have been postponed until next year, with few exceptions.

While advocating for restaurants, the Texas Restaurant Association worked with the state government to create the Texas Restaurant Promise, a set of guidelines restaurants must follow to meet the Minimum Standard Health Protocols enacted in Texas on May 1.

Requirements include providing guests with disposable menus, spaced out tables and hand sanitizing stations. These new guidelines bring additional costs to businesses.

Diners have a meal at La Panadería located Downtown Sept. 24, 2020. Restaurants can increase occupancy to 75 percent of capacity according to Gov. Greg Abbott. Photo by Victoria Martinez
People dine at La Panadería on East Houston Street. Photo by Victoria Martinez | Heron contributor

When La Panaderia’s East Houston Street location closed its doors in March, the business relied on its Broadway location up north to keep it afloat by delivering bread and selling baskets of eggs, beans and other hard-to-find grocery items, at the time.

Since reopening, the location is taking advantage of its large dining room and newly added outdoor patio to accommodate customers and increase sales. Location manager Tiffany Cabrera said they are hopeful the loosened capacity restrictions will continue to benefit the business, but won’t know for some time.

“Overall, we are hoping things get better by the end of the year, like November or December,” Cabrera said. “We’re just hoping everything gets more stable.”

For Casa Rio’s, the oldest restaurant on the River Walk, and Schilo’s, the oldest restaurant in San Antonio, the absence of tourism and big conventions has impacted profits. Both locations are only meeting 30% of their regular sales despite their historic reputations, said Tom Furgerson, director of operations for both restaurants.

Two people sitting at each end of the bar at Schilo’s Sept. 24, 2020. This restaurant offers dine-in, takeout and no-contact delivery. Photo by Victoria Martinez
Schilo’s on East Commerce Street has made every other table available for dine-in. Photo by Victoria Martinez | Heron contributor

Unlike La Panaderia, Casa Rio and Schilo’s were unable to adopt food delivery or curbside pickup services during the lockdown because of their East Commerce Street and River Walk locations.

“You can’t drive down, park on Commerce Street, get out, run in and get food,” Furgerson said. “The logistics of it made it impossible.”

Neither restaurant can rely on local support to sustain them as many San Antonio residents are unwilling to pay expensive downtown parking fees, Furgerson said.

To safely bring in more customers, Schilo’s will be placing barriers between tables to lessen the distance required between them. Casa Rio will hang similar barriers from the umbrellas covering the tables on their riverfront patio. The restaurants will also offer guests free parking in their small lot if they spend at least $20 inside; they hope waiving parking fees will encourage guests to attend.

“We’re going to have to operate under these circumstances for quite a while longer,” Furgerson said. “It’s a whole combination of things: people have to feel comfortable and safe about going out and we have to figure out ways to operate within the guidelines we’ve been given.”

Related
» Looking back: The week downtown San Antonio became a ghost town
» San Antonio landlords now obligated to inform tenants of rights
» Downtown economy struggles to return to the new norm, much less the normal norm
» City Council narrowly rejects proposal to give renters 60 extra days to pay overdue rent
» A commission of renters? In San Antonio, the debate rages early on
» Landlords asked to forgive 25% rent for tenants impacted by coronavirus

Brigid Cooley is a Heron intern this fall. She is pursuing a Bachelor of Arts degree in communications at Texas A&M University-San Antonio, where she also serves as editor-in-chief of The Mesquite newspaper. She can be reached at brigid@saheron.com, @brigidelise1 on Twitter

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