August 12, 2020
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The recovery in seated dining has started to roll over, according to OpenTable reservation data.

An increase in coronavirus cases threatens an already shaky recovery in American restaurants

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Just as many restaurant owners might have thought that the worst is over, things are going the wrong way.

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After the states removed the coronavirus lock, data from the OpenTable restaurant reservation platform showed a slow but steady recovery of sedentary restaurants in a number of restaurants open for booking across the country. But how number of reported cases continues to rise in Florida, Arizona, California and Texas, the data shows an alarming change in the outcome of the sit-down diner, which is starting to roll over.

For example, in Texas, which last week lowered its room capacity limit from 75% to 50%, last week the number of people sitting at dinner recovered to an average loss of about 60% last year, but only to decrease to a 75% drop over compared to last year by July 4.

States that were more cautious with reopening plans, such as New York, did not see the destruction of their more modest rebounds at the table. It is noteworthy that New York still has not opened the dining room indoors and postponed plans because of precautions to avoid the risk of reducing the number of cases of coronavirus.

Data recovery in a seated dining room has begun to migrate, according to OpenTable reservation data.
Data recovery in a seated dining room has begun to migrate, according to OpenTable reservation data.

According to OpenTable, nationwide, the disruption to restaurant restaurants has not been as dramatic, although recovery has certainly stalled. OpenTable CEO Steve Hafner last month warned Yahoo Finance that long-term pain for restaurant owners who are already struggling with a low margin could lead to the closure of one of four restaurants forever,

As Florida, Texas, Arizona, and California continue to experience an alarming increase in cases, this could lead other states to weigh the risks of reopening and especially returning to crowded restaurants too quickly. As JPMorgan Chase recently noted in a new research note using credit card transaction data, the surge in purchases made in person was positively correlated with a lag in per capita coronavirus cases.

According to JPMorgan analysts, the data showed that “a positive correlation between activity levels three weeks ago and the spread of COVID-19 since then indicates that the resumption of economic development really coincided with the resumption of the spread of the virus.”

To be fair, the correlation does not prove a causal relationship, and the data show that only about 32% of the variability in growing cases seems to be due to a revival of personal expenses for the restaurant. This category of expenses, however, showed the strongest correlation compared with other categories of expenses and seems to be consistent with researchers emphasizing additional risks of reduction during long visits in crowded enclosed spaces.

Given the delay it took in states such as Texas and Florida to resume business to turn into a worrisome number of cases, JPMorgan also calculated that the surge in card transactions could cause problems for Midwestern states.

“These factors suggest that states such as Kansas, Kentucky, Indiana and Missouri are at greatest risk of the next acceleration in cases,” they wrote.

Zach Guzman is the host YFi PM as well as a senior writer and reporter covering entrepreneurship, cannabis, startups and the latest news at Yahoo Finance. Follow him on twitter @zGuz,

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