This is leading to a huge drop in revenue for restaurateurs, for which they are unable to pay bills
A lack of customers owing to the Covid-19 pandemic is crippling the restaurant industry despite receiving permission to open the front doors for diners three weeks ago.
This is leading to a huge drop in revenue for restaurateurs, for which they are unable to pay establishment rent, utility bills, value-added tax (VAT), or pay off loans, said industry insiders.
They also said that dine-in for customers resumed from May 23, but customer attendance has been below expectation.
Ashfaq Rahman Asif, owner of Tarka restaurant and publicity secretary of Bangladesh Restaurant Owner Association (BROA), said that restaurants are getting fewer customers since the re-opening, and the number is significantly lower than usual.
"Moreover, owners must keep operating the restaurants at 50% capacity at best and have to close by 10pm, depriving us of getting more customers. Most restaurant owners have no other option. As a result, many have been forced to leave or sell their businesses,” he also said.
He also said that it is nearly impossible to overcome the losses caused by the pandemic by running restaurants this way.
“Rather, it may be possible for us to turn around only if the demands we made at the post-budget press conference are implemented properly,” said Rahman.
Ashiqur Rahman Ayat, owner of Platted restaurant at Old Dhaka's Lalbagh area, said that sales have risen slightly since his restaurant reopened, but there has been no visible improvement of the situation.
Since they have to run the restaurant with half the seats vacant, they have not been able to start their restaurant with adequate staff like before.
“I had to let go of a considerable number of employees from my restaurant, from 15 to three, to meet the expenses. But the situation is still the same,” he said.
He also said that at least 13 organizations under different ministries and departments are involved in restaurant management and seven organizations monitor the restaurants. They want a single organization to monitor the sector.
Syed Mohammad Andalib, organizing secretary of BROA said that with the income the sector is earning since the re-opening of the restaurants from last month, they can only pay their utility bills.
“The number of guests is very low because people have become indifferent to go outside and to have food in restaurants. Moreover, the restaurants have to be kept open at 50% capacity,” he added.
He also said that it is impossible to overcome this crisis by just allowing restaurants to remain open.
“It may be possible for us to recover only if our logical needs are met. Therefore, the government should pay attention to this sector and extend maximum cooperation to turn us around,” he also said.
According to BROA, there are currently about 60,000 restaurants across the country, with more than 8,000 in the capital alone. Close to 2.8 million people depend on the restaurant industry for their livelihoods, while the number is several times higher if it includes the supportive sectors.
Trouble began after the outbreak of Covid-19 last year when several restaurants began letting go of staff, while many sold off their businesses. Some were unable to survive and closed shop entirely.
Nearly 25-30% of the restaurants closed permanently after the first wave of Covid-19, and 50% of ownerships were transferred as their original owners could not survive, said the BROA.
Earlier, restaurant owners demanded long-term loans with easy terms and low-interest rates from the SME Foundation to revive their businesses after incurring massive losses due to the Covid-19 pandemic.
Moreover, they also demanded reducing VAT for all types of restaurants and wanted a three-slab VAT system for the FY22 budget.