Millions of bottles of beer, liquor, and wine are being sold, delivered, and consumed in boisterous amounts around the country right now, as a result of the staggering state-by-state stay-at-home orders issued to fight the coronavirus pandemic. At-home drinking is up — perhaps dangerously so — yet in many ways the industry still sits at the fringes of the greater economic conversation, having been deemed nonessential and left out of much of the federal loan funding (which just went to a lot of big companies anyway). Now, a future for dive bars and nightclubs and first-date wine bars is more uncertain than ever.
Los Angeles Mayor Eric Garcetti ordered the immediate closure of restaurant dining rooms back on March 15 (California Gov. Gavin Newsom followed suit two days later). Bars and nightclubs, deemed nonessential, were told to go dark entirely. Literally overnight, an industry valued at $3 billion in California disappeared — and may be among the last to return, even as Newsom considers a phased rollout of eased restrictions across the state.
“I wish the mayor or the governor would actually have real conversations with real small-business bar owners,” says John Terzian, co-owner of LA’s H.Wood Group. “I can assure you they’re not.”
In other parts of the country and world, mandatory reduced staff and customer capacities have been seen as a tradeoff for reopening, and as a means of potentially avoiding community spread of COVID-19. That’s hard when every empty bar stool, every taped-off velvet booth, means thousands of dollars in lost revenue. “They’re not actually thinking of this business if they believe that we can reopen at 50 percent [capacity],” says Terzian, whose company operates 13 bars and restaurants across Southern California, Chicago, and Aspen, Colorado, including nightclub hot spots like Poppy, the Peppermint Club, Shorebar, and supper club Delilah. “There’s no rules on the rent or the utilities, so landlords are going to be demanding that. How is that at all fair? I don’t think anyone’s thought through it in the minds of an actual operator. It’s not right.”
Even chefs and restaurant owners skating by (if at all) on delivery and takeout agree that without more federal and state intervention on things like utilities, payroll tax, and rent — not just temporary abatement, but long-lasting financial forgiveness — more and more operations will close forever. For bars and nightclubs, there isn’t even any current income to buoy the choppy seas, which has meant an almost immediate wave of furloughed employees, lost health care, and past-due bills. Restaurants with alcohol licenses were approved to sell takeout and delivery cocktails (as long as they sell food with it) more than a month ago, but bars doing the same? The government says no thanks.
“I don’t think we even knew we’d be shut down for this long,” says Marc Rose, co-owner, along with Med Abrous, of spots like the Spare Room in Hollywood, Genghis Cohen on Fairfax, and bars and restaurants in Seattle and Nashville. “Your initial thought is, ‘How can we start to think about what we’re going to do when we reopen?’ and then as time goes on, you start wondering if you even can reopen. Is there a way for this industry to rebound at all?”
It’s difficult to say. Face coverings and latex gloves will likely become the norm, as will limitations on the number of total customers permitted inside at any one time. For nightclubs built on bottle service, live entertainment, and great vibes, it can be hard to see a prosperous future filled with happy customers or happy employees. “You spend so much time in hospitality becoming better at service,” says Rose, “becoming a warmer place to be, more welcoming, super inclusive. And now our staff is going to wear masks, but maybe the customers aren’t? Does that make our staff feel like they have the scarlet letter?”
Terzian isn’t sure if gloves, masks, and mandated distancing make sense for his nightlife business model, which has historically attracted a wealthy West Hollywood clientele, including plenty of celebrities. “I never want to sacrifice the integrity of our places,” he says. “If it’s something that isn’t going to come off right, I’d rather just stay closed until we can have the doors open properly again.”
Serial restaurateur, bar owner, and landlord Anat Escher (Banditos, Trophy Wife) takes an even stronger approach, echoing the sort of pro-economy loss-of-life-be-damned sentiments coming from the White House and #LiberateLosAngeles corners of the internet. “It’s been a month and a week,” she says. “What will come out of not opening the economy will be more devastating than people actually dying from the coronavirus. I’m not saying open Disneyland tomorrow, but we can open some businesses.” Health experts have repeatedly warned against broadly reopening sectors of public life again until testing becomes more widespread.
Escher and others say their businesses may not have that long. She has given temporary rent easements to her multiple restaurant tenants across the city, but worries that if they can’t start paying again soon, the whole system could collapse. “Even if it’s not going to be a huge money-maker,” Escher says, “it’s about our sanity. People need to feel good waking up in the morning, getting dressed, and going to work.”
Not everything is doom and gloom. Marc Rose believes that “the bar model is currently set up a bit more stable” than restaurants to succeed long term during a protracted reopening, even with the smaller customer base and precautionary measures in place. “You have less perishable items, you can operate with less labor. I think that’s the way we’re going to be needing to look at things as bar owners. How do you create menus that are a little bit more streamlined? It may mean less jobs, but it could allow the bar to sustain.”
The markup on alcohol is better than for food, too, but the whole industry still relies on a volume of customers — something the government is reluctant to allow for months, if not more than a year, to come. Rose and others are considering potential changes to their entire model, like turning to a more curated, intimate — though distanced — bar experience, complete with reservations. “The way to survive is to not think how we have been thinking normally,” says H.Wood’s Terzian. “You can’t just sit back.”
Corissa Hernandez of Xelas in Boyle Heights says that it’s her customers and her internet savvy that are keeping her business going. Hernandez has closed her bar and transitioned the company’s Instagram page into a hub for people who still want to connect, albeit virtually, over discussions of plant-based Mexican cuisine or at-home DJ sets. “We’re a predominantly Latinx community,” Hernandez says. “We saw that this virus was affecting black and brown communities at a higher rate, and we wanted to be good neighbors and use our platform to raise awareness not just for ourselves but for what’s happening here.”
Hernandez says that she’s been able to curate a sense of trust with her customers as a result of all that social media outreach. “After this is all over, I think that trust is going to be really important for us,” she says. The bar opened just 18 months ago and still carries significant debt, but Hernandez believes that, even during a pandemic with no firm end in sight, Xelas will remain. “I think we’ll be okay. We’re doing our best to stay ahead of the situation as much as possible. But looking at the very real statistics out there, it’s scary.”
Eastside Establishment’s Dustin Lancaster is trying to stay rosy as well. “You have to hold on, to believe that some help is coming,” he says. “All we have is optimism right now. What else are we going to do, give in to the bleakness of it all?” Lancaster has collaborated with a number of co-owners and investors over the years to produce hit Los Angeles spots like wine bar Covell, craft beer bar Hermosillo, and the Hi-Hat and Holcomb, both on York. Now many, if not all, are in danger of disappearing.
Some business models could work with reduced hours or with Lancaster himself again stepping back behind the bar, such as Covell or Augustine Wine Bar in Sherman Oaks. The same cannot be said for the Hi-Hat. “It’s a music venue,” Lancaster says matter-of-factly of the Highland Park property he co-owns. The Hi-Hat has been instrumental in launching the careers of many notable musicians in just a few short years, including Billie Eilish; Lancaster no longer believes the venue will reopen post-pandemic. “When do you think that they’re going to allow 400 people to gather shoulder-to-shoulder in a music venue again?”
Lancaster says that his properties rely on “the intimacy of the space” to draw in repeat customers, like at his neon-tinged Chinatown wine bar Oriel. A lot of that feeling goes away when gloves and masks and half-full rooms become the norm — especially if the bar itself is still going to lose money anyway. “Is that better than nothing? I’m not sure that it is.”
Here & Now owner Sarah Meade is struggling with “better than nothing” herself at her Arts District cocktail hangout. The space has a full kitchen, which has allowed Meade and her staff to transition to takeaway items and limited other goods — including takeout cocktails for $11 — but it hasn’t been enough to pay the bills, particularly with so much more robust actual restaurant competition in the city right now, and consumer dollars spread thin. She worries about what a gradual reopening could mean for her drinking clientele.
“Not being able to reach capacity, not being able to use all of your tables and chairs, the bar stool area nonexistent — it’s a half death,” says Meade. “That vibe and that energy that we’re so accustomed to, I don’t think we’re going to see that for a while. That’s terrifying.”
Or as Marc Rose puts it: “Are people really just going to even walk into a bar anymore?”