Las Vegas Sun

October 21, 2020

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Las Vegas restaurants struggling to survive pandemic

Gino Ferraro

Steve Marcus

Gino Ferraro is shown at Ferraro’s Italian Restaurant & Wine Bar Tuesday, Aug. 11, 2020. He is among many restaurant owners suffering amid the pandemic.

When Gino Ferraro opened Ferraro’s Italian Restaurant & Wine Bar some 35 years ago, he worked grueling hours with little help to get the fledgling business off the ground.

Now, after being forced to cut back on staff to make up for lost business from the coronavirus pandemic, he finds himself in a similar position.

“When we started, we worked almost 20 hours per day,” Ferraro said. “That’s what we’re doing now. My wife is making pastries … We’re basically back to when we started.”

Across the restaurant industry in Las Vegas, things are dire, said Elizabeth Blau, co-owner of Honey Salt, a restaurant near Summerlin.

“There’s only so long that restaurant operations can stay in business,” said Blau, who also runs Blau and Associates, a restaurant consulting firm.

“On average, we’re a single-digit profitability business,” she said. “Something’s going to have to give … We need help.”

Ferraro said he had to cut his staff of about 75 to fewer than 20 employees.

“I had to let go people that were with me for 25 years,” Ferraro said. “I had a manager with me for almost 15 years. I told him he could either work for much less money or go on unemployment. He decided to go on unemployment. My chef, who was making serious money, is making peanuts right now. I’m trying to keep the doors open while minimizing expenses.”

Ferraro, whose restaurant just east of the Strip depends heavily on tourists, said he doesn’t know how much longer he can hang on.

The number of visitors to Las Vegas has plummeted since casinos reopened June 4 after a state-mandated shutdown in mid-March to help contain the spread of the virus.

Las Vegas visitor volume for June was down 70% from the same month last year, according to the Las Vegas Convention and Visitors Authority.

State social distancing regulations also dictate that restaurants can only operate at 50% capacity.

For Ferraro, all of that has translated into a 75% decline in business.

“I can’t even do payroll with that kind of revenue,” Ferraro said. “It’s very difficult. We don’t know what the outcome of this will be. I’m really scared. If we don’t get more assistance from the government, we’re in big, big trouble.”

Ferraro said he received a forgivable government loan earlier this year to cover payroll and other basic business expenses. But another round of assistance is needed, he said.

Nationally, three in five restaurants need help to stay open, according to the James Beard Foundation, a New York-based culinary arts support nonprofit organization.

Blau said restaurant owners also need more help from landlords to ease rent payments.

“Fixed costs, nobody wants to reduce anything. It’s devastating,” Blau said. “It’s going to be a bloodbath. We’re fighting for the survival of our industry right now.”

Ferraro has also been impacted in other ways by the pandemic.

He was set to open a restaurant at the new Allegiant Stadium, but the Raiders announced they will be playing without fans this season. And it’s unclear when the stadium will open for other large events, such as concerts.

His Pizza Forte shops at T-Mobile Arena and Las Vegas Ballpark in Summerlin are also shuttered until the sports and entertainment venues reopen.

Ferraro said he doesn’t see significant improvement in the near future.

“I think 50% of the restaurants in the tourist corridor will not survive,” Ferraro said. “We have a tough road ahead of us in Vegas.”

Joseph Nedel, the laid-off director of operations for the Mabel’s BBQ and Sara’s eateries at the shuttered Palms, said more than 120 of his employees lost their jobs when the off-Strip resort closed in March.

Frank Fertitta III, CEO of Red Rock Resorts, the parent company of the Palms, said the company is unsure when or if the resort will reopen.

“It’s all wait-and-see right now,” Nedel said. “I was talking to a friend I have here in Vegas. He was an executive chef at a pretty prominent steakhouse on the Strip, but it’s still not open. His house is on the market, and he’s going to move to Oregon to look for work cooking there.”

Las Vegas-based Fifth Avenue Restaurant Group has more than 30 quick-serve food court restaurants at Strip resorts and a handful of full-service restaurants in Las Vegas.

Of about three dozen locations, 25 are open, company CEO Frank Bonanno said. Seven restaurants are open only on weekends, he said.

The company furloughed about 850 employees in March, and about 500 of them are now back on the job, he said.

“It’s been tough,” Bonanno said. “We’re forecasting it will take 18 to 36 months to get back to pre-COVID-19 business levels.”

For now, he said, "we’re trying to survive."