KEY POINTS

  • Landry's CEO Tilman Fertitta forecasts a strong rebound for the restaurant industry in 2022
  • Restaurants that survive the COVID-19 culling will have learned key lessons in staying alive
  • He claims 2022 “could be a spectacular year” for the hard-hit hospitality industry
     

Restaurants that survive the ruthless COVID-19 combing-out and adapt to it stand to witness "a spectacular year" of profitability in 2022.

This guardedly optimistic prediction was made Tuesday by Tilman Fertitta, the billionaire CEO of the dining, hospitality, entertainment and gaming firm, Landry's, Inc.

Fertitta believes survivors of the badly hit restaurant industry should be able to apply the lessons they learned that could make their businesses more profitable in the future. He claims 2022 “could be a spectacular year.”

“I’ve never been one to always look out 15 months, but that’s what we have to do today,” said Fertitta on CNBC's “Power Lunch.” “Because if we can get back, all companies, flat to negative 10% in same-store sales, I think these companies are going to have 10% better profits than they were going to have before this pandemic even started, because we’ve all learned to operate so much more efficiently.”

Fertitta didn't address how this rosy scenario will come about given restaurants will still keep operating at greatly reduced seating capacities until a COVID-19 vaccine enters widespread use. A recent report said it could take until 2024 to complete vaccinations worldwide.

COVID-19 has also given dine-in restaurants a bad reputation. A new study released last week by the U.S. Centers for Disease Control (CDC) suggests a strong connection between the spread of COVID-19 and restaurants and bars.

The COVID-19 pandemic continues to devastate the restaurant and hospitality industries, which have suffered the most from the enforced social distancing measures meant to slow down the spread of the disease. The forced closures of indoor dining in many states saw restaurants having to operate at lower capacities, deeply slashing revenues.

Fertitta's view of the immediate horizon is less optimistic. He warned the fall and winter months will become more challenging as COVID-19 collides with the oncoming flu season in the U.S.

“This could be a very rocky winter," he noted. "But what I’m excited about is if we can get through the winter and see everything start improving, companies, including restaurants and hospitality and casinos, we’ve all learned to operate differently."

Recognizing his sunny outlook might seem unrealistic to the struggling hospitality industry, Fertitta said he's trying to be positive.

"We’re going to get through this flu season, and everything is going to be OK, and we have some type of a vaccine (for COVID-19) or we’re going to continue to know how to treat this disease better."

The industry, however, takes a far more sanguine view of its prospects. The National Restaurant Association (NRA) has repeated its forecast the industry will likely lose $240 billion in 2020 because of the pandemic. It said restaurants around the country lost $120 billion in sales from March to May.

NRA revealed 40% of restaurants offering takeout and delivery said they aren’t ready to resume on-premise service even where it’s allowed because of strict social distancing rules. It said most states that have reopened have set dine-in capacity limits ranging from 25% to 50% of total seating. Diner groups are required to be kept 6 to 10 feet apart.

Andrew Rigie, executive director of the New York Hospitality Alliance, says that restaurants and bars face COVID-related unique problems. Andrew Rigie, executive director of the New York Hospitality Alliance, says that restaurants and bars face COVID-related unique problems. Photo: AFP/Angela Weiss