U.S. restaurants, especially high-end establishments that rely on reservations, are struggling to stay afloat as the coronavirus pandemic has effectively shuttered their businesses. Nick Kokonas, who runs restaurants including Alinea and the Tock reservations system, says it will take years for the industry to recover.
“Is it recoverable? Absolutely. What’s the time horizon? Who knows,” Kokonas says on the latest episode of the Ad Age "Marketer’s Brief" podcast.
Kokonas is co-owner and co-founder, along with Chef Grant Achatz, of Alinea Group. Their flagship restaurant Alinea, which opened in 2005, is Chicago’s only three-star Michelin restaurant and is consistently ranked as one of the world’s top places to dine. Other Alinea Group restaurants include Next and Roister.
Kokonas is also the founder and CEO of Tock, a reservation system that’s now used by restaurants worldwide, including Alinea, where diners prepay months in advance to reserve their tables. Earlier in his career, Kokonas was a derivatives trader.
“I was used to looking at big, big pools of data and looking for patterns, and also it really trains you to think, to see the world as it is, not as you wish it were,” he says.
As he watched data on the coronavirus unfold, he saw steep declines in reservations at restaurants in cities such as Hong Kong. In early March, he began seeing reductions in reservations in places such as Seattle that were usually sold out. And people were canceling reservations and seeking refunds because they were not traveling.
On March 8, well before the industry was forced to close dining rooms across most states, Kokonas wrote in a post on Twitter, “the hospitality industry is about to get crushed. 4-5% of GDP is restaurant sector and we're just beginning to see the effects of travel restrictions and quarantines.”