After Inslee address, Seattle-area business community braces for new coronavirus restrictions

Gov. Jay Inslee stopped short of announcing new stay-at-home orders in his speech Thursday but many businesses and trade groups are already bracing for a new round of potentially costly restrictions as early as next week. 

“I can’t imagine that we’re not going to have more restrictions coming up, with the number of positive cases surging,” said Seattle restaurateur James Weimann, co-owner of Rhein Haus and seven other Seattle-area eateries.

While Weimann thinks such restrictions may be necessary, he fears what it’s going to mean for a company that has already laid off nearly two-thirds of its staff and is currently running at 30% of its 2019 revenues. “Right now, we’re looking at a really potentially devastating winter,” Weimann added.

He could be speaking for much of Washington’s business community at a moment when the 9-month-old pandemic appears to be moving into a more intense and uncertain phase.

Although new restrictions have been widely expected as coronavirus cases have soared, there is little consensus among businesses, trade groups or economists over what the governor might propose.

So far, Inslee’s announcements have laid out only voluntary measures related to private gatherings and out-of-state travel.

But the governor’s speech Thursday left open the possibility of “further measures” that “will affect what we do outside of the home”— language widely read as signaling some kind of renewed restrictions.

“That’s been the governor’s style — to kind of set it up,” said Tom Norwalk, president & CEO of Visit Seattle, the trade group representing the region’s already battered tourism industry. What’s unclear, Norwalk said, is “exactly what next steps might be in terms of severity.”

That has only added to an atmosphere of uncertainty hovering over the business community. On top of questions about rising coronavirus case rates, businesses also don’t know when, or if, Congress will extend the pandemic relief measures, such as the Paycheck Protection loans, that allowed many businesses to survive since the start of the pandemic.

Despite those unknowns many businesses and trade groups are already laying out grim scenarios, especially in public-facing sectors such as food service, tourism and accommodation. These businesses have experienced a disproportionate share of the layoffs and losses related to COVID-19 — and may bear the brunt of any new state and local restrictions.

Even without new restrictions, industry estimates suggest that 35% of the state’s restaurants and 49% of the state’s hotels will permanently close due to the pandemic, according to the Washington Hospitality Association (WHA).

During a Friday press conference, WHA president Anthony Anton warned that a new set of restrictions could erase the gains that surviving hotels and restaurants have clawed back since the spring.

Of the 191,000 jobs the industry initially lost to the pandemic, “we were able to bring back 100,000 jobs,” Anton said. But “if we have to shut down again, that means we’re going to lose those hundred thousand jobs.”

Even restrictions that don’t close businesses but instead merely reduce business capacity — for example, ordering restaurants to go from 50% of indoor capacity, as is currently allowed, to just 25% capacity — are likely to be devastating, he said. “It’s really, really tough to make a full-service restaurant work at 25%,” Anton said. “The difference between 25% and closure is — it’s about the same. “

That concern was echoed by well-known Seattle restaurateur Ethan Stowell, whose business is at just a third of its pre-pandemic level. “If we roll back and business goes down, that means layoffs,” he said. “That’s just how math works. There’s not a scenario where they limit indoor dining, or shut down indoor dining, and nobody loses a job.”

Given those vulnerabilities, business leaders have been making the case against a repeat of this spring’s severe restrictions. Instead, they’ve repeated Gov. Inslee’s message about the importance of individual consumer behaviors on the spread of the virus.

At Friday’s press conference, Anton said infection data from Pierce, Clark and Walla Walla counties showed that most of the cases could be traced to households, social gatherings or workplaces that were outside the food service sector, while “less than 1% is coming from restaurants.”

That emphasis on individual behavior is shared by other business leaders. “Wear a mask, save a job, take personal responsibility for your actions at home,” Kris Johnson, president of the Association of Washington Business, said in an interview Thursday, shortly after the governor’s speech. “We need to find a way to knock the virus down so small businesses don’t have to get closed.”

The governor’s office has been “reaching out to stakeholders in various sectors and industries for their input on proposals to restrict activities,” wrote spokesperson Mike Faulk in an email.

Still, even if any forthcoming restrictions are less severe than they were last spring, many public-facing businesses face a challenging winter, economists say.

Economist James McCaffrey, co-director of the Center for Economic and Business Research at Western Washington University, said enterprises face not only potential government restrictions, but also consumers who, regardless of restrictions, will become more reluctant to patronize businesses as COVID-19 cases rise.

Last April, McCaffrey said, consumer mobility — the number of people “out and about” — fell from previous levels by 53%. Although it’s since recovered somewhat, he expects it to fall again by about 40% from normal as coronavirus cases continue to rise and consumers “start to personally know people impacted” by the disease.

That points to an even deeper uncertainty: whether government restrictions can help curb the spread of the disease while also encouraging consumers to feel safe — or whether “consumers decide to avoid those businesses no matter what the governor says,” said Jacob Vigdor, an economist at the University of Washington Evans School of Public Policy and Governance.

“There’s sort of a three-dimensional chess game going on involving consumers, businesses, and Governor Inslee,” Vigdor said. “So from one perspective this means there is less riding on the governor’s decision than we might think. But it also means the outlook is pretty gloomy.”