Jill Tyler, Bill Jensen, and Jon Sybert own two restaurants in Adams Morgan. Tail Up Goat is poised to see the other side of the pandemic while the future of Reveler’s Hour is far more uncertain. The reason has little to nothing to do with Tail Up Goat’s Michelin star. Unlike its sister restaurant, Reveler’s Hour was not approved for a Restaurant Revitalization Fund grant from the Small Business Administration.
These life-changing grants essentially erase pandemic-related losses by replacing 2020 revenue with 2019 revenue minus any Paycheck Protection Program loans a restaurant or other food service entity might have received. RRF grants are a key factor that can propel a restaurant into an actual recovery phase. The Reveler’s Hour team is hoping Congress refills it this month so more restaurants have the opportunity to bounce back. More than 370,000 businesses applied to the $28.6 billion federal relief fund and only 105,000 were approved.
“That is the big difference,” Tyler says. “If it weren’t for that we’d be having the same conversation about Tail Up Goat and the same conversation with our investor at Tail Up Goat that we’re having with all of our investors at Reveler’s Hour and our team at Reveler’s Hour.”
Reveler’s Hour is in the privileged position to be able to turn to its investors in the hopes of securing a fresh round of capital. That’s not ideal, of course, because it means more debt. “If we have to take this debt on, it will be adding to debt that we’ve already accrued over the last 18 months,” Tyler says. “It’s a daunting amount of debt.”
The owners fear other restaurants that did not receive RRF grants are staring down an even starker reality if they don’t have investors willing to open their wallets again. They also recognize that they’re fortunate to be in a position to speak up and candidly ask for help. Other small restaurant owners might not be able to because they’re not media savvy or may not be ready to panic investors or worry staff.
Tyler, Jensen, and Sybert have a message on behalf of similarly situated restaurateurs: The pandemic isn’t over, most aid has dried up, and your favorite restaurants may still be vulnerable to closing for good. “You know how much money you’re losing and how long you can keep losing that money until it’s over and a lot of people are there right now,” Tyler says.
Being shut out of a RRF grant was the biggest blow, but a confluence of other factors have left the romantic pasta restaurant on shaky ground, starting with its address in the District. A recent Lending Tree study put D.C. dead last out of 50 metropolitan areas in terms of restaurant recovery. While the District was near the bottom for almost all metrics examined, it ranked particularly poorly when it came to consumer spending at restaurants and hotels and time spent away from home at retail and restaurants.
“Diners come out on Saturday night at 7 o’clock and see a full restaurant and assume that’s the default state,” Jensen says. It’s not. There’s not always a 5 p.m. rush or a late night crowd shutting down the bar. “People just aren’t eating out the same way they were pre-pandemic. Filling a dining room once is great, but for a lot of businesses to generate the kind of revenue they need to turn a profit, you need to fill the dining room multiple times. We’re not there yet.”
Going from an emotional and financial high in June to a tough August caused whiplash. “To be in a moment where you’re in a space doing a thing you love without a mask again and feeling like, ‘Oh great, there’s a light at the end of the tunnel…” Jensen trails off. (With COVID-19 cases rising again largely because of the delta variant, Mayor Muriel Bowser put a new mask mandate in place for all indoor areas on July 31. Restaurants reported an abundance of reservation cancellations for parties large and small shortly after.) “I thought this was a viable way to earn a living again and then to have it all dashed has been particularly deflating.”
Tail Up Goat and Reveler’s Hour try to create a safe environment for customers and staff by requiring proof of vaccination for indoor dining. But that doesn’t eliminate risk and diners know it. “Washington is an amazing market, but our experience here is that the dining public is more [reluctant] to dine out and particularly to dine indoors,” Jensen says.
Reveler’s Hour doesn’t have viable outdoor space. “We tried to make a post-apocalyptic parking lot thing work last year, and it was fun, but it was never viable as a revenue generator,” Jensen says. “That was more about exercising PPP and keeping people employed for us, which has been a priority.”
The owners are doing what they can to coax people through their doors. Devoted regular customers—so-called ride-or-diners—have been spending what they can or aiding their favorite restaurants in other ways to ensure their existence for a year and a half now. “They need to show up now more than ever,” Jensen says. “I hope they’re not tired of hearing us say that.”
An email to Reveler’s Hours newsletter subscribers sent today isn’t shy: “We cannot continue to operate at a loss indefinitely, and without additional relief, our only lifeline is taking on more debt,” it reads. “If you love what we do, we need your help. Make a reservation, purchase a gift card, or treat us as the neighborhood wine store we’ve always wanted to be. Support your other neighborhood favorites that are equally suffering for business.”
Reveler’s Hour is also at a competitive disadvantage compared to Tail Up Goat because it’s so new. Having opened on New Year’s Eve 2019, they barely had time to introduce themselves to the community or benefit from the bump early restaurant reviews provide. Plus, like most new restaurants, they have investors to pay back.
“Restaurants cost tons of money to open,” Tyler says. “It’s not just about sales in any one month. The percentage of profits on any given month that is profitable is going back to investors for years until those investors are paid off.”
Tack on that restaurants like Reveler’s Hour are stomaching supply chain disruptions and increased food costs. Sybert, the executive chef, has always sourced from small local farms and isn’t willing to compromise on that value despite being in a cash-strapped situation.
“The cost of everything from what we get from small farms to paper towels has gone up either 20 percent or 200 percent,” he says. “We as a restaurant can’t just push all of that cost onto our diners. A diner would not be OK spending $10 more this week for pasta than they did six months ago. This thing has affected everybody.”
Running a kitchen has been precarious because of the unpredictability of the pandemic. Sybert lives in fear that a new mandate impacting operations could come down at any moment. The one right before Christmas Eve didn’t come with much notice. “All of the sudden a weekend you thought you’d be doing 200 or 300 covers, instead you’re doing 100 and you have the food for the 300 you hoped to feed,” Sybert explains.
The Reveler’s Hour team didn’t speak about their own specific rent situation, but other than labor, rent is the largest expenditure for restaurants. Tyler says some of her peers in the industry have avoided paying rent during the pandemic because they secured deferments or abatements with their landlords. Those don’t last forever and not everyone caught a break.
“I know people who took out insane amounts of personal credit card debt and have ruined their credit scores to try to keep their businesses open,” Tyler says. “It’s just so unfortunate this didn’t help everyone.”
“This” is the RRF, which as of today still isn’t included in the $3.5 trillion budget reconciliation package. There’s a mark-up session scheduled with the House Small Business Committee tomorrow morning. Tyler is urging those who can to reach out to their representatives in Congress to pressure them to replenish the fund and notes Senator Ben Cardin of Maryland has been among legislators leading the charge.
(Tyler serves on the leadership team of the Independent Restaurant Coalition, which has been lobbying the federal government to pass restaurant-specific aid throughout the pandemic.)
Even if the RRF is replenished, Jensen isn’t so sure there’s a solidified future for restaurants like his without “a return to normal public life” or additional relief from the federal government. “This style of restaurant—a neighborhood hub that’s high volume and still delivers food and service at a high level—will disappear, at least for independent operators,” he says. “We need more help.”
This story has been updated to reflect that Jensen meant reluctant not reticent in a quote.