John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association (PRLA) announced his plans to retire from the association in July.
Longstreet joined the association of over 7,500 restaurants and lodging locations in 2014. Since joining PRLA, he has played a “significant role in transforming the organization into one of the country’s leading hospitality associations,” PRLA wrote in a statement to its membership on Friday.
“It’s been my great honor and privilege to serve as the leader of PRLA. I was blessed to lead a terrific team and work for amazing members, both of whose grit, determination, and innovation have been on full display over the last two years. I am excited to see what comes next for the organization,” said Longstreet. “While this was a difficult decision to make, I look forward to making new memories in this next chapter of life.”
Longstreet has more than 40 years of experience in various leadership roles across the hospitality industry. Prior to joining PRLA, he led Mercer County-based Quaker Steak and Lube as its president and CEO for four years and was senior vice president of Bristol Hotels and Resorts for 16 years.
Outside of his experience in restaurants and lodging, Longstreet served two terms as Mayor for the city of Plano, Texas from 1996 to 2000.
Tom Neely, chairman of PRLA’s board, thanked Longstreet for his leadership and impact over his tenure at the association on behalf of the board on Friday.
“While we’re certainly going to miss John, we are a much stronger organization and industry as a result of his vision, innovation, and leadership,” said Neely. “We wish him the best in his retirement and look forward to the road ahead.”
PRLA is currently organizing a search committee and vetting executive search consultants and said it plans to release details soon.
“John’s announcement gives us plenty of time to prepare the organization for his departure. The board is moving quickly to find the best qualified candidate and allow for a healthy transition period,” said Neely.
John Longstreet, president of the Pa. Restaurant and Lodging Association (PRLA)
This has been a tough year for the hospitality industry and few organizations are more aware of that than the Pennsylvania Restaurant and Lodging Association (PRLA). Lehigh Valley Businessrecently sat down with John Longstreet, president of the PRLA, to talk about how its members are coping with the pandemic and what the organization is doing to help.
Q: As cases of Coronavirus rise, how can restaurants and bars protect their patrons and employees?
A: The Governor has guidelines that are very helpful at the Pennsylvania Department of Health website. We refer to those and guidelines created by the CDC and the National Restaurant Association. The ServSafe program developed by the National Restaurant Association has a COVID addendum added to it, which extends to all 52 states. We say that because we have a unified partnership agreement in Puerto Rico and DC.
The most important aspects of safety are sanitation of surfaces, masking and social distancing. There were many protocols already put in place prior to COVID due to regulations put out by the FDA, the Department of Agriculture and the Department of Health, so that the [hospitality industry] arguably has more safety regulations and protocols than any retail business
Q: How were business models tweaked to cope with this crisis?
A: The first thing our industry did was pivot to take out, delivery and curbside pickup. Historically, 50 percent of food purchased away from home is at restaurants. Some people don’t cook, others lack kitchen facilities, so restaurants became essential businesses. When restaurants reopened, they found ways to maximize their capacity, while making sure there was social distancing. For instance, Red Robin converted their waiting areas to seating areas to increase capacity and asked that customers wait in their cars.
Restaurant guidelines allowed for plexiglass barriers on the backs of booths and bar barriers, but bar seating is prohibited now, which makes it difficult to get to 50 percent capacity at some eateries
Q: Is ‘take out only’ going to carry restaurants through this difficult period?
A: No, it won’t. Restaurants operate on a 5, 7% margin. Before the pandemic, takeout was 10 percent, at best. Now some have gotten up to 30 percent, but that’s not enough to sustain businesses through the winter. They need two things: to open at a reasonable capacity and to receive a significant amount of financial help from the state—a tall order when we have 26,800 restaurants in Pennsylvania.
Q: Please talk about the July 15 mitigation order and some of the issues it created.
A: The mitigation order that went into effect on July 15 limited private parties to no more than 25 people. Most hotels ballrooms have the capacity to seat 2,000, so think about that.
In addition to that, restaurant capacity was reduced to 25 percent and bar seating was eliminated. This caused many restaurants to close to indoor dining. Imagine a 100-seat restaurant being cut down to 25 people and that includes the staff.
Q: What about self-certification—the optional program by which restaurants can assure employees and customers that they are adhering to COVID guidance?
A: We heard time and again that some restaurateurs think that the Wolf administration is trying to entrap them. There’s no evidence of that, but because they feel targeted, they are understandably wary.
Q: Has the Wolf administration Worked with the PRLA?
A: Early on, we reached out to the Governor’s team and said we’d like to work with them in any way we could and it became a collaborative relationship, until a week prior to July 15, when we were on the phone with them again and at that time we talked about ideas to further stop the spread. Then, on July 15, we were scheduled to speak again and they said that they were thinking of doing some things which were different than those we had discussed a week prior.
They ended up reducing restaurant capacity to 25 percent and when we asked if there was evidence to justify the reduction they said, “We don’t want to become another California or Arizona.” CBS News later asked for data and never received any.
At that time the Wolf administration also announced that private parties would be reduced from 250 inside to 25, so you can imagine all of the events that had to be canceled. This is when the restaurant industry began to lose faith in the administration. We heard stories about restaurants that had ordered thousands of dollars’ worth of food. You could also argue that pushing parties out of regulated places into unregulated places could also cause the spread.
Q: Has waiving liquor license fees helped?
A: It means almost nothing because the average fee is between $600 and $1,500. This year’s fees were deferred, but if they want next year’s deferred, they will have to pay this year’s fees. I’ve heard operators say that they could make that up in one evening at 50 percent capacity.
Q: Which types of restaurants have the best chance at weathering this storm
A: Quick serve, like McDonald’s, Wendy’s and Burger King since they are already set up for drive through. Some are eliminating overhead by keeping their dining rooms closed.
Q: How are mom and pop’s doing, compared to chains?
A: Both are in the same boat because they are all suffering and can’t spread money over their portfolio.
Q: How has the PLRA’s Advocacy Fund helped business owners through this crisis?
A: Initially, hotels were not included as essential businesses and we were influential in getting the administration to update that list. We learned quickly that information flow was very important. We became a news organization and published “The Daily Update.” We also created a weekly webinar to pass on information. We wanted to help furloughed employees, so we worked to expedite unemployment compensation and enhanced unemployment compensation. We also waived dues for non-members and have had 145 new restaurants join PRLA since the pandemic started because they recognize the value of what we’re doing and that’s been gratifying.
Q: How might another lockdown affect the hospitality industry?
A: The July 15 mitigation orders certainly hurt business. The administration thought they were doing the right thing, but I would be surprised if they go into further mitigation. Everyone knows that, for the most part, they are making it up as they go and so they keep trying new things but I’m not sure that a lockdown will happen again.
Q: What more would you like to have seen from the state and federal government?
A: There’s a billion dollars in federal money from the CARES Act that has yet to be distributed here in Pennsylvania and we’d like to see that expedited.
We are also watching HB2615 sponsored by Rep. Todd Stephens (R-Montgomery) which will provide community assistance grants for restaurants and will create a 250 million grant fund with up for 50 thousand dollars per location.
Q: How would you say the future of the industry has been affected and how will that affect other businesses?
A: Financing could be an issue for future restaurants. In the past, you saw a restaurant close and another new one would take its place, but that isn’t going to happen now. Cities could also be affected. In Pennsylvania, 63 percent of the operators said that it’s unlikely that they would be in business six months from now if conditions do not change.
This has been a tough year for the hospitality industry and few organizations are more aware of that than the Pennsylvania Restaurant and Lodging Association (PRLA). Lehigh Valley Business recently sat down with John Longstreet, president of the PRLA, to talk about how its members are coping with the pandemic and what the organization is doing to help.
Q: As cases of Coronavirus rise, how can restaurants and bars protect their patrons and employees?
A: The Governor has guidelines that are very helpful at the Pennsylvania Department of Health website. We refer to those and guidelines created by the CDC and the National Restaurant Association. The ServSafe program developed by the National Restaurant Association has a COVID addendum added to it, which extends to all 52 states. We say that because we have a unified partnership agreement in Puerto Rico and DC.
The most important aspects of safety are sanitation of surfaces, masking and social distancing. There were many protocols already put in place prior to COVID due to regulations put out by the FDA, the Department of Agriculture and the Department of Health, so that the [hospitality industry] arguably has more safety regulations and protocols than any retail business
Q: How were business models tweaked to cope with this crisis?
A: The first thing our industry did was pivot to take out, delivery and curbside pickup. Historically, 50 percent of food purchased away from home is at restaurants. Some people don’t cook, others lack kitchen facilities, so restaurants became essential businesses. When restaurants reopened, they found ways to maximize their capacity, while making sure there was social distancing. For instance, Red Robin converted their waiting areas to seating areas to increase capacity and asked that customers wait in their cars.
Restaurant guidelines allowed for plexiglass barriers on the backs of booths and bar barriers, but bar seating is prohibited now, which makes it difficult to get to 50 percent capacity at some eateries
Q: Is ‘take out only’ going to carry restaurants through this difficult period?
A: No, it won’t. Restaurants operate on a 5, 7% margin. Before the pandemic, takeout was 10 percent, at best. Now some have gotten up to 30 percent, but that’s not enough to sustain businesses through the winter. They need two things: to open at a reasonable capacity and to receive a significant amount of financial help from the state—a tall order when we have 26,800 restaurants in Pennsylvania.
Q: Please talk about the July 15 mitigation order and some of the issues it created.
A: The mitigation order that went into effect on July 15 limited private parties to no more than 25 people. Most hotels ballrooms have the capacity to seat 2,000, so think about that.
In addition to that, restaurant capacity was reduced to 25 percent and bar seating was eliminated. This caused many restaurants to close to indoor dining. Imagine a 100-seat restaurant being cut down to 25 people and that includes the staff.
Q: What about self-certification—the optional program by which restaurants can assure employees and customers that they are adhering to COVID guidance?
A: We heard time and again that some restaurateurs think that the Wolf administration is trying to entrap them. There’s no evidence of that, but because they feel targeted, they are understandably wary.
Q: Has the Wolf administration Worked with the PRLA?
A: Early on, we reached out to the Governor’s team and said we’d like to work with them in any way we could and it became a collaborative relationship, until a week prior to July 15, when we were on the phone with them again and at that time we talked about ideas to further stop the spread. Then, on July 15, we were scheduled to speak again and they said that they were thinking of doing some things which were different than those we had discussed a week prior.
They ended up reducing restaurant capacity to 25 percent and when we asked if there was evidence to justify the reduction they said, “We don’t want to become another California or Arizona.” CBS News later asked for data and never received any.
At that time the Wolf administration also announced that private parties would be reduced from 250 inside to 25, so you can imagine all of the events that had to be canceled. This is when the restaurant industry began to lose faith in the administration. We heard stories about restaurants that had ordered thousands of dollars’ worth of food. You could also argue that pushing parties out of regulated places into unregulated places could also cause the spread.
Q: Has waiving liquor license fees helped?
A: It means almost nothing because the average fee is between $600 and $1,500. This year’s fees were deferred, but if they want next year’s deferred, they will have to pay this year’s fees. I’ve heard operators say that they could make that up in one evening at 50 percent capacity.
Q: Which types of restaurants have the best chance at weathering this storm
A: Quick serve, like McDonald’s, Wendy’s and Burger King since they are already set up for drive through. Some are eliminating overhead by keeping their dining rooms closed.
Q: How are mom and pop’s doing, compared to chains?
A: Both are in the same boat because they are all suffering and can’t spread money over their portfolio.
Q: How has the PLRA’s Advocacy Fund helped business owners through this crisis?
A: Initially, hotels were not included as essential businesses and we were influential in getting the administration to update that list. We learned quickly that information flow was very important. We became a news organization and published “The Daily Update.” We also created a weekly webinar to pass on information. We wanted to help furloughed employees, so we worked to expedite unemployment compensation and enhanced unemployment compensation. We also waived dues for non-members and have had 145 new restaurants join PRLA since the pandemic started because they recognize the value of what we’re doing and that’s been gratifying.
Q: How might another lockdown affect the hospitality industry?
A: The July 15 mitigation orders certainly hurt business. The administration thought they were doing the right thing, but I would be surprised if they go into further mitigation. Everyone knows that, for the most part, they are making it up as they go and so they keep trying new things but I’m not sure that a lockdown will happen again.
Q: What more would you like to have seen from the state and federal government?
A: There’s a billion dollars in federal money from the CARES Act that has yet to be distributed here in Pennsylvania and we’d like to see that expedited.
We are also watching HB2615 sponsored by Rep. Todd Stephens (R-Montgomery) which will provide community assistance grants for restaurants and will create a 250 million grant fund with up for 50 thousand dollars per location.
Q: How would you say the future of the industry has been affected and how will that affect other businesses?
A: Financing could be an issue for future restaurants. In the past, you saw a restaurant close and another new one would take its place, but that isn’t going to happen now. Cities could also be affected. In Pennsylvania, 63 percent of the operators said that it’s unlikely that they would be in business six months from now if conditions do not change.
Pennsylvania business owners could lose their state licensing credentials and eligibility for liability insurance if they do not comply with the governor’s mandated three-phase reopening process, according to a statement from Gov. Tom Wolf Monday.
A 13-county cluster in the state’s southwest region this Friday is set to join the 24 that moved from the red to the yellow phase last week, allowing their business communities to resume limited in-person operations. State health officials say a county is considered for this transition when it experiences less than 50 new confirmed cases per 100,000 people in a day, a threshold many counties around the commonwealth have met.
However, State Department of Health Secretary Rachel Levine told the State Senate last week that this requirement was “necessary but not sufficient,” and that there are other factors the health department will consider — availability of testing and transmission data, among them.
The governor’s phase-in plan to reopen the Pennsylvania economy is losing legitimacy among small businesses who say waiting for state authorities to grant them the green light could cost them their company.
“People are questioning the validity of the order,” said John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association (PRLA), in an interview Monday.
“There are some people who are going to lose their businesses,” he said, noting that many small business owners are having to dip into their mortgage to sustain their business through the ongoing recession. “When you get into situations like that, people are going to do what they can to survive.”
County officials in Lebanon, Dauphin, York, Cumberland and Perry counties issued statements saying they would not prosecute businesses for failing to comply with the Wolf administration’s three-phase, county-by-county reopening process.
“Enough is enough,” wrote Dauphin County Board Chairman Jeff Haste. “It is time to reopen the commonwealth of Pennsylvania and return our state to the people and not run it as a dictatorship.”
Lancaster County public officials penned a letter to Gov. Wolf that said they would move the county from “red” to “yellow” designation on May 15, which would allow companies to resume limited in-person operations, with or without the governor’s cooperation. The letter charged Wolf administration officials with failing to be transparent about why Lancaster County isn’t allowed to resume operations despite meeting state guidelines.
“We have consistently called for a data-driven, collaborative and transparent approach to getting through this crisis,” according to the letter, signed by County Commissioners Josh G. Parsons and Ray D’Agostino, Sheriff Chris Leppler and state lawmakers representing Lancaster. “In refusing to do so, you have lost the will of many people to continue on the extremely narrow path you have outlined.”
In his Monday briefing to the press, Wolf condemned efforts by public officials to speed up the process of reopening commerce, calling them “cowardly acts” that endanger the lives of Pennsylvanians by encouraging companies to resume in-person business functions before contact tracing and widespread testing are available.
“I cannot allow residents in a red county to get sick because their local officials can’t see the invisible risk of the virus in their community,” Wolf said Monday. “So, I must and I will impose consequences if a county locally lifts restrictions when it has not yet been given the go-ahead by the state.”
Wolf said non-compliant counties would not be eligible for federal stimulus discretionary funds, businesses would no longer be eligible for business liability insurance and restaurants that resume operations could lose their liquor license if they resume operations ahead of the Wolf administration’s authorization.
Longstreet said many businesses could lose business permits and liquor licenses if the state law enforcement authority trumps county law enforcement officials in disputes over violations to the state’s phase-in approach.
“I respect their [county officials’] authority, but their authority is at a different level than the state,” he said. “It’s about what the state wants to enforce for those who hold state permits.”
Business advocacy groups say they don’t urge any employer to violate the governor’s order, but they are preparing member businesses for some of the safety issues that confront a business attempting to reopen. David Black, president and CEO of the Harrisburg Regional Chamber, said he’s telling businesses to “use caution, be safe and check with your insurance carrier.”
PA Chamber President and CEO Gene Barr said his message to business owners is: “Whenever you open, wherever you open, you need to do it safely.
“We’d never encourage anyone to break the law,” he said. “There are some things businesses can be doing, to go along with the governor’s comment, to use common sense.”
Requirements for small businesses to be forgiven for federal paycheck protection loans are at the center of lobbying efforts to revise the program’s guidelines by industry leaders who say the aid package fails to address sector-specific challenges of the coronavirus recession.
The Paycheck Protection Program (PPP) provides small businesses a loan that can be forgiven if they use it to keep employees on their payrolls for eight weeks until the economy rebounds and they can return to work. But industry leaders say the restrictions on how employers can use PPP money could make it so there’s no work to which employees can return.
Officials from the Small Business Administration (SBA), the federal agency responsible for overseeing the program, say the loan can be 100% forgiven as long as borrowers use the money under specific requirements, many of which weren’t finalized until after the program began accepting applications.
The SBA is requiring borrowers to use at least 75% on payroll costs and no more than 25% for certain overhead expenses. The money needs to be deployed for rehiring full-time equivalent employees over the course of eight weeks following loan disbursal, whether or not they’ve been deemed “life-sustaining” by state officials and can conduct in-person business operations.
A reduction in full-time equivalent employees or payment below pre-pandemic levels at the end of eight weeks would result in the same percent reduction in how much of the loan is forgiven. Unforgiven loan funds would have to be paid back with a low-interest loan term — a 1% rate over the course of 24 months.
Small business and industry trade groups, such as the National Federation of Independent Business (NFIB) and the Pennsylvania Restaurant and Lodging Association (PRLA), are pushing for an easing of restriction on how employers can use fully-forgiven PPP loan funds.
According to letters submitted to Washington D.C. policymakers and Congress this past week, NFIB and PRLA officials are asking policymakers to extend the eight-week window to give companies more time to spend PPP money and still be forgiven. They are also asking lawmakers to alter the 75%-25% ratio of forgivable payroll to overhead expenses, respectively, that can be used with PPP loan money.
“We are going to continue to press for these items,” said NFIB Pennsylvania State Director Gordon Denlinger said in an interview last week.
Ben Fileccia, director of operations and strategy for the PRLA, said it’s going to be a while before the public feels comfortable returning to restaurants after a public health crisis. Fileccia said a recent National Restaurant Association poll shows some 2% of restaurants across the U.S. say they won’t be able to open after the crisis.
“Everything is going to ramp up but it’s going to take some time,” Fileccia said. “Eight weeks is not going to be a solution.”
More time needed
Forgiveness requirements will disadvantage businesses forced to cease operations if they can’t use the money to transition to normal operations after eight weeks, said Drake Nicholas, a partner with the Lancaster-based legal firm Barley Snyder. Shuttered PPP borrowers should have the option to use the loan money for payroll expenses once in-person operations can resume and employees can come back to work.
“If it’s shut down for two to three months, it’s not like a business is ready on day one to ramp up,” Nicholas said. “It puts that particular business at a disadvantage because once they’re able to reopen again, they’re probably going to have to draw on other lines of credit or other resources to start up again, where they could have used these [PPP] resources to support their payroll to get them ramped up again.”
Most member businesses surveyed by the NFIB said it will take longer than eight weeks for them to financially recover from the coronavirus-induced economic recession. The survey, conducted after lenders stopped taking PPP applications on April 16, showed 63% of respondents believed recovery will take them into next year.
Only half of small-business PPP borrowers who responded to the survey said they expect to have their loan be fully-forgiven. About 27% said they expect to have at least 75% forgiven, and 3% said they plan to use more than half as a loan.
But that’s not how the program is meant to be used, said SBA Eastern District Spokesperson Sonia Smith. The program was designed for employees to bring workers back onto payroll regardless of whether or not social distancing orders allow the business to resume operations.
“Some businesses might be able to recall their employees, and they may be able to work,” she said. “There are other businesses where you might just be paying [the worker] to sit at home. That is the intent of the program — to bring employees back onto the payroll.”
Nicholas said it is important employees receive wages while mandatory closures are in effect, but employers should have the option to use a greater share of PPP money to support revamping business operations.
“Some would argue that wasn’t what the law was intended, that it was intended to get employees back on the payroll as soon as possible,” he said. “I don’t see how you could take that position and say this program supports small business.”
A top Pennsylvania trade group raising grant money for beleaguered restaurant staffs reached its 1,000-application limit in 12 hours Thursday, a sign of how imperiled the hospitality industry is amid the protracted economic fallout of the coronavirus pandemic.
The Pennsylvania Restaurant and Lodging Association (PRLA) launched a fundraising campaign to raise grant money for hospitality-sector employees who have lost work because of social distancing orders instituted to contain the spread of COVID-19. Known as Hospitality Assistance Response of Pennsylvania (HARP), the association’s initiative offers eligible restaurant employees a one-time grant of up to $250.
Fundraising will continue to supply a second round of emergency funding, PRLA officials said, as the trade group seeks to fill what the PRLA identifies as a gap in government aid programs that don’t address industry-specific needs of restauranteurs. The overall fundraising goal for HARP is $1 million, according to the PRLA website.
Fundraising kicked off with two high-profile donations by Yuengling, $35,000, and Tito’s Vodka, $30,000, said Jon Arons, a senior account executive at Philadelphia-based communications firm Food Shelter working with the PRLA. The online application portal went live at 12:01 a.m. Thursday and reached maximum capacity by noon, Arons said.
Arons said the high volume of applications indicates how much the hospitality industry is impacted by the mandatory closures instituted by public health officials to slow the spread of COVID-19. The latest report released by the PRLA said 96% of Pennsylvania restaurant operators laid off staff since the onset of the crisis and suffered an 82% decrease in sales between April 1 and April 10. The trade group expects the industry to lose $1.8 billion statewide by the end of April, according to a recently published study by the National Restaurant Association.
A fundraising campaign to support struggling restaurants and hospitality sector employers is set to go live this week.
The Hospitality Assistance Response of Pennsylvania (HARP), the brainchild of officials with the Pennsylvania Restaurant and Lodging Association, will raise money for a first-come, first-served grant program directed at restaurants and other hospitality sector companies affected by business closures spurred by the coronavirus pandemic.
PRLA officials said they will begin accepting applications for HARP on April 23, and the application portal will end May 5. Only the first 1,000 applicants will be accepted during the first round.
The restaurant and lodging industry, the commonwealth’s second-largest employer next to agriculture, has seen precipitous drops in revenue in the past month, and federal loan programs haven’t been designed to address their industry-specific challenges, PRLA Director of Operations and Strategy Ben Fileccia said in an interview Wednesday.
Restaurant operators in Pennsylvania reported an 82% decrease in sales between April 1 and April 10, and the industry is projected to lose more than $1.8 billion in statewide sales by the end of April, according to the latest report from the PRLA.
Nationwide, restaurants lost $30 billion in March and are on track to lose $50 billion by the end of April. If the industry is on schedule for a gradual reopening of the economy in June, the nationwide expected forecast for restaurants is $240 billion in losses by the end of the year, according to the National Restaurant Association.
The idea for the fund was inspired by calls to PRLA from community members asking what they can do to give back to what Fileccia called “one of the most generous industries” in their time of need.
“Restaurants are the lifeblood of your community, of your small towns and of your big cities,” Fileccia said. “I am seeing a lot of communities stepping up and paying them back now.”
Fileccia said PRLA has an immediate goal of $250,000. So far, roughly $100,000 has been raised, with major contributions coming from Tito’s Vodka and the Yuengling family.
“As we continue to navigate this crisis, the wellbeing of our employees, business partners and local communities remain our top priority,” Wendy Yuengling, chief administrative officer and sixth generation family member of the Pottstown-based beer company, said in a statement released by the PRLA. “As a founding donor of HARP, we are proud to work alongside PRLA to support Pennsylvania’s hospitality workers, including bartenders, servers and waitstaff, who have been impacted by COVID-19.”
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