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Tuesday, 21 July 2020

Landry’s CEO: Not Letting Restaurants Open Fully Is a ‘Taking By The State’

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Landry’s CEO: Not Letting Restaurants Open Fully Is a ‘Taking By The State’

“Until we fix this occupancy problem, even though you are open, it is not possible to pay full rent,” says Landry CEO and reality TV host Tilman Fertitta. “How do you pay a mortgage when you only operating at 25 percent or 50 percent? To all of you judges out there, this is a taking by the state and the government when you take 50 percent of my occupancy.”

Tilman Fertitta, Landry’s chairman, and CEO talks about his frustration with the incompetence of the State of New York and the City of New York in dealing with restaurant reopenings:

It’s Unbelievable That New York Won’t Give Us A Metric To Reopen

We love to complain about leadership on a national level and on some state levels but nobody knows what to do. Everybody wants to blame DC right now but we are sitting here in New York and they can’t even give us the metics and say if the pandemic only has this much hospitalization or cases for a 14-day rolling average. Then you can plan on opening your restaurants at 25 or 50 percent. We get absolutely no information at all out of the State of New York and the City of New York. The City of New York is unbelievable that they will not give us a metric when they can open these restaurants.

Just think about it. Everything is a metric and everything is data points. We all want to blame everybody else for the data points and not making decisions. Wouldn’t you look at four or five key data points and say as soon as we hit these data points you are going to open? What is so difficult about that? We hear about the great leadership of New York and up east in New Jersey while we are treating the rest of the country like they’re from other countries that they are quarantining us and they can’t even go visit up there. It’s ridiculous right now. Yet they won’t even give us business and data points to operate. In New Jersey, you still can’t have a drink of water in the casino unless you are dehydrating and you are about to pass out. It’s extremely comical to me.

Lack Of Unions In Regional Casinos Enabling Them To Thrive

All the regional casinos are doing extremely well, take out New Jersey of course. I hate to say this but the reason the regional casinos are doing so much EBITA right now is that number one, people are moving around, they don’t have to fly in, and you don’t have the union wages in the regional casinos. They are also not opening their buffets and all their full service restaurants. You are really able to watch your costs in a regional casino that you can’t in Vegas or in New Jersey where you have the high union wages. It’s tremendously helping us all.

But we are doing 100 percent of the same gaming revenue in the regional casinos where in Vegas you are doing below 50 percent and in Atlantic City, you are doing about 40 percent. Regional is where you want to be right now.

Not Letting Restaurants Open Fully Is a ‘Taking By The State”

The State of Missouri is one of the few states that lets us open 100 percent of the occupancy of our restaurants as long as we keep six-foot distancing, which we 100 percent do and abide by. They’re for it because you are able to open the establishment and can seat your seats and still be careful. That’s why you are running the best same-store sales comps in that particular market right now.

Until we fix this occupancy problem, even though you are open, how do you pay full rent? How do you pay a mortgage when you only operating at 25 percent or 50 percent? To all of you judges out there, this is a taking by the state and the government when you take 50 percent of my occupancy.

Disney Is Not Even Hitting 20% Occupancy Target Right Now

We are down 70 percent in Orlando and we have some of the biggest stores at Disney. They are coming out now and saying it. The traffic is just not there. I give Disney a lot of credit for going out and putting great protocols to protect their guests. They were only going to let 20 percent of the park’s occupancy come in. I don’t think they are even doing 20 percent.

This is a problem all over America right now that you can’t even do the business. I’m not speaking for Disney but I know my restaurants aren’t doing 20 percent down there right now. We usually do a lot more than the parks do when it comes to percentages.