Restaurant owner Paul Kasteel is losing $2,500 a week trying to trade through Melbourne’s stage four lockdown, and that’s despite a 93% rent waiver from a supportive landlord.
Kasteel’s Melbourne venues — Hoo Haa bar and Miss Kuku restaurant — have been operating on survival footing for months as the COVID-19 pandemic has torn through the city, and while news of a $3 billion stimulus pledge from the Victorian government is welcome, the business owner says it doesn’t address the core problem.
“The only thing that’s really going to save us is actually being able to open and have customers,” Kasteel tells SmartCompany.
“Economically, until we can get some significant numbers back inside our venues, we’re all going to be losing money.”
Under a third round of the Business Support Fund unveiled by Victorian Premier Daniel Andrews on Sunday, Kasteel is eligible for a further $10,000 grant in the coming weeks.
The issue is, that’s only enough to cover his losses for about seven of the minimum 10 weeks before hospitality businesses will be allowed to host indoor diners again.
And even then, this timeline is premised on the state recording no new cases of coronavirus for 14 days straight — a threshold that’s generating scepticism across Melbourne.
“Zero cases in November is quite unrealistic. This thing could be popping up and popping down,” Kasteel says.
“If we get there, fantastic, but what’s the plan if we don’t?
“The only solution is to find a way to live with the virus and open up,” Kasteel says.
Kasteel also hopes to be eligible for a $251 million state government program providing grants up to $30,000 for licensed hospitality businesses, but there are still no details about how the grants will be awarded, and under what conditions.
“I am grateful they’ve announced more money; I’m just holding my breath and waiting to see the details,” Kasteel says.
Kasteel’s experience underscores the difficult circumstances facing restaurant owners in the coming months: with the prospect of eased restrictions far from certain, businesses can only map out how long they’ll be able to stay afloat on a mix of government money and whatever revenue they can manage to earn.
Compounding matters, while authorities balance easing restrictions with the potential for a third wave — and with it pressure for another lockdown — Kasteel says the recession is starting to set in, leading customers to keep a tighter hold on their purse strings.
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“Most people that I speak to are doing less business,” Kasteel says.
“There’s a definite tightening of the belt. People are less inclined to buy cook-at-home packs.”
It won’t be until at least November 23 that the prospect of real relief — the ability to open indoor dining rooms — is possible, with a widespread view in the industry that outdoor dining, set t0 kick-off as early as October 26, will be far from a saving grace.
While the Victorian government has floated the prospect of closing metropolitan roads to provide venues with the space to host outdoor diners, Kasteel isn’t sure that would be entirely workable.
“Outdoor dining is a joke. I think they’re clutching at straws,” Kasteel says.
“Do you want to provide 10 seats to a cafe if the density rule is one per four square metres? You’d need to give them 40 square meters of space.
“What we saw when we opened is that, in terms of social distancing, the problems were around the entrances and the streets, not inside the venues.
“People are actually going to be circulating through laneways to see their mates and leaning over pickets.
“Human behaviour is to get close … are they going to have police and security guards in all these outdoor areas?”