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What happened to Austin’s 24/7 restaurants, cafes and coffee shops?

Thursday, September 16, 2021 by Sean Saldaña

Austin, over the course of its storied history, has developed a thriving hospitality scene. There is no shortage of bars, restaurants, coffee shops, and cafes that show the diversity and breadth of the city. Among this grand selection, some of the most beloved are the places that usually stay open 24 hours a day: Magnolia Cafe, Kerbey Lane Cafe, a whole host of coffee shops, and so on.

But since the outbreak of the coronavirus pandemic, all of that has changed and most businesses now shut their doors by 10 p.m., leaving Austinites with few options outside of fast-food places like Whataburger.

The local leisure and hospitality industry, which had seen consistent growth over the past decade, bottomed out last April when the number of people employed in the industry dropped from 132,600 to 72,800. Since then, the industry has been on the rebound. In July, more than 125,000 people were employed in leisure and hospitality; still far below pre-pandemic levels, but a marked improvement since its pandemic low.

Stephanie Williams and her husband Steve are the owners of Bennu Coffee, a string of coffee shops that, like other famous Austin businesses, used to be open 24 hours a day. Starting in March of last year, their shops have undergone a number of changes in hours of operation.

When asked why the shops have not resumed 24/7 operations, Stephanie told the Austin Monitor that the answer comes down to a few different things: demand, economics and staffing.

As the vaccines have become widely available and some of the early-pandemic requirements have eased, Bennu has slowly begun to extend its hours – at first until 7 p.m. and now until 9 p.m. That said, the extended hours have not translated into more revenue because there simply aren’t enough customers showing up. Stephanie estimates that their highest-volume store still only operates at 65 percent of pre-pandemic levels.

Additionally, coffee shops have on-average lower sale prices than restaurants, making the recovery effort tricky. Coffee shops also rely more on commuters to and from work – a revenue stream that’s been disrupted as working from home has become the norm.

“Margins are very slim at coffee shops in the best of times, and we were just not able to pivot to third-party delivery in the way that many restaurants were able to,” she said.

Staffing has also been an ongoing issue, not just at Bennu, but throughout the industry. One report published in August said the industry is “in a labor shortage and retention crisis,” with pay, a lack of consistent income and demanding hours as some of the primary reasons.

According to Stephanie Williams, it’s been incredibly difficult to find people willing and able to work overnight hours – and things have only gotten tougher recently. In the past eight weeks, Bennu has lost team members who have been with the company for years.

In spite of all this, Bennu plans to resume 24/7 hours at its Highland location in the next few weeks, though no official date has been announced yet. Steve Williams told the Monitor that with the school year back in full swing, they’re hoping to attract a college student clientele.

For Stars Cafe, another formerly 24/7 restaurant, the company’s new closing time of 6 p.m. is a lot easier to explain.

“It’s all staffing,” says Shannon Sedwick, co-owner of Stars Cafe.

She told the Monitor that despite overnights being a source of profit for the business, they’ve been unable to reopen 24/7 because they can’t find the staff.

“We’ve got ads in for cooks and kitchen staff, and we’re not having any luck … we’re looking and we have yet to find anybody who wants to do the late-night shift,” Sedwick says.

Even for businesses that have managed to stay open around the clock, it’s been anything but easy. Tyson’s Tacos has for the most part managed to maintain 24/7 service through the pandemic, but in the words of Jacob Kouhana, a digital consultant with Tyson’s, “Staffing is no joke in this industry at the moment.”

Despite raising its pay, Tyson’s has been short-staffed for six months, and at one point, the business had to shut down its overnight operation for almost a month due to staffing. That said, Tyson’s overnight sales “have grown tremendously over the past couple of years,” according to Kouhana.

However, there does seem to be one business model that’s performed well in the coronavirus era while avoiding many of the industry’s staffing woes: food trucks.

Whereas brick-and-mortar restaurants and cafes usually require a larger staff, various positions to fill and more upkeep of lobby and seating areas, food trucks usually run efficiently with only a handful of people and allow customers to social distance.

Taqueria El Paisita is a food truck located on East 12th Street that opened up in May of this year. During weeknights, they serve Mexican food until 2 a.m. (on weekends, they’re open until 3 a.m.), and thus far, the business has performed well.

Co-owner Michelle Hogan said that in the area, “there are no options unless you want french fries or a burger, and that’s a problem,” which is why staying open late into the night and offering healthier options has always been their business plan.

In a city of nearly a million people, late-night food service can still be a lucrative business opportunity. Between college students, overnight workers and folks who just get hungry at night, the demand is there.

“So much happens in the hours where the majority of us are sleeping,” Hogan said.

Jonathan Funes Morales is head chef at Taqueria El Paisita. “When we started,” he said, “we thought it’d take two to three months for business to pick up, but it actually happened a lot faster, about 15 days. Up until now, we’ve been very busy.”

When or if Austin will see its 24/7 hospitality return to its pre-pandemic state is a bit of an open question at the moment. For now though, Austin’s around-the-clock hospitality businesses are working through logistics, trying to find a balance between service and viability.

Jonathan Funes Morales’ quotes have been translated from Spanish. Photo made available through a Creative Commons license.

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