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New paper details impact of stay-at-home orders on restaurants

By: Steve Orbanek
First Published: December 8, 2020
Topics: Faculty, Feature Story, In the News, Research, Sport, STHM School, Tourism & Hospitality, U.S.-Asia Center

Research from Temple University professor details how the COVID-19
pandemic impacted the restaurant industry in every county across the country

PHILADELPHIA, Dec. 2, 2020 — If you were a restaurant owner in 2019, chances are that you had a good year as sales across the industry reached a record high of $863 billion. However, the same cannot be said for restaurant owners in 2020.

The COVID-19 pandemic has impacted a number of businesses, but few harder than the restaurant industry.

“They’ve had to basically adapt and change their entire business model,” says Yang Yang, an associate professor in the School of Sport, Tourism and Hospitality Management (STHM) at Temple University. “Even the restaurants that have succeeded and done reasonably well with pivoting to a takeout operation have still suffered considerable losses. There’s just not the same amount of volume in takeout as there is in in-person dining.”

A new journal article from Yang details how specifically the restaurant industry was affected in the early parts of the pandemic. It also could provide a future outlook for the industry, especially if more states implement stay-at-home orders in response to rising COVID-19 cases.

Co-authored by Hongbo Liu from The University of Surrey and Xiang Chen from the University of Connecticut, Yang’s article “COVID-19 and restaurant demand: early effects of the pandemic and stay-at-home orders” was recently accepted for publication in the International Journal of Contemporary Hospitality Management. Looking at data sources that include foot traffic data and credit card translation data, the paper analyzes restaurant demand in every county in the U.S. from February 1 to April 30, 2020, during the early part of the pandemic.

According to the study, COVID-19 significantly affected restaurant demand as a 1% increase in daily new COVID-19 cases led to a 0.0556% decrease in restaurant demand while stay-at-home orders were associated with a 3.25% demand decline. 

Additionally, the results indicate that the negative effect of COVID-19 was smaller for fast-food restaurants compared to full-service establishments. 

As part of the research, Yang had also created the Restaurant Resilience Index by COVID-19. The index details the average household expenditure for food away from home in 2019 compared for the early part of the pandemic for every county in the U.S. 

“The data we collected was from the first couple months of the pandemic, but from a long-run perspective, we hope the restaurant industry can develop contingency plans to improve its resilience to pandemics,” Yang said. “While we might not see a pandemic like COVID-19 again in the near future, challenges will continue to arise. This index helps ensure that the hospitality industry remains flexible and adaptable when faced with uncertainty.”

About the School of Sport, Tourism and Hospitality Management

Established in 1998, the School of Sport, Tourism and Hospitality Management (STHM) at Temple University has a distinguished tradition preparing leaders in the sport, recreation, tourism and hospitality industries. 

Thoroughly committed to providing student-centered education and professional development relevant to today’s thriving sport, tourism and hospitality industry — STHM integrates applicable, real-world experience into the curriculum and classroom through its global network of industry partners and well-connected alumni network. Our award-winning faculty and cutting-edge research institutes engage in pioneering research, informing business practices and providing students with the knowledge and skills to succeed in these fast-growing industries. 

The School offers undergraduate degree programs in sport and recreation management and tourism and hospitality management; traditional graduate degree programs in sport business, and hospitality management; and two online graduate degree programs in executive sport business and travel and tourism. STHM also offers a PhD program in business administration with a concentration in tourism and sport.