Researcher: Pandemic devastating state’s restaurant industry

MUNCIE, Indiana – The COVID-19 pandemic is devastating the food industry in Indiana with 41 percent of restaurant owners reporting financial problems so severe that they may shutter operations by the end of the year, a Ball State University researcher said.  

Sotiris Hji-Avgoustis, a professor of hospitality and food management in the Miller College of Business, said a preliminary analysis of the industry finds that almost half of the 300,000 Hoosiers working in restaurants are facing unemployment or drastically reduced hours as the pandemic surges throughout the state. 

“These are very dire times for the industry,” Hji-Avgoustis said. “If Indiana officials decide the state must reimpose restrictions to mitigate the spread of the pandemic—which may include reducing hours or further limiting seating—many restaurants will close for good. Most can’t survive on just providing take-out.” 

His research finds: 

  • Restaurant and dining operations pump about $13 billion into the state’s economy each year. 
  • Hospitality has been the hardest hit industry, staffing levels are currently at 70%. 
  • Eight out of 10 owners started out in entry-level industry positions. 
  • Restaurant businesses are often financed through personal credit cards, personal or family savings and through mortgaging the owners’ homes. 

The professor pointed out that the National Restaurant Association estimates that the restaurant industry lost $120 billion in the first three months of the pandemic and is on track to lose $240 billion by the end of the year. The association also estimates that at least 100,000 restaurants will close before the end of 2020, Hji-Avgoustis said.  

The professor also is conducting a research project to examine the impact of the pandemic on the hotel convention industry of Indianapolis and its major competitors (Chicago, Nashville, St. Louis, San Antonio, and Kansas City). These cities were identified by Visit Indy, a non-profit organization that markets the City of Indianapolis and the Indiana Convention Center.   

Hji-Avgoustis pointed out that meetings, conferences and events-related tourism generated over $752 billion nationwide in 2016 but can be impacted adversely when disaster strikes.   

Indianapolis convention tourism generates $5.5 billion in revenue and $725 million in state and local taxes, according to Visit Indy’s latest annual estimates. 

Hji-Avgoustis plans to release his study in early 2021. 

“We are examining how Indianapolis can create pragmatic policies to react to the economic challenges, illustrating that leveraging innovative policies and looking at new markets may assist in the rebounding of convention tourism in Indianapolis and its competitors.” 


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