Study: Indiana Could Lose 41 Percent of Its Restaurants by End of 2020

A Ball State University professor found that nearly half of Indiana's 300,000 restaurant workers face possible unemployment or reduced hours.

More than 40 percent of restaurants in Indiana might shut their doors permanently before the end of 2020, according to research conducted by a professor at Ball State University (BSU) in Muncie.

Sotiris Hji-Avgoustis, a professor of hospitality and food management in BSU’s Miller College of Business, has been studying the impact of the COVID-19 pandemic on Indiana’s restaurant industry. According to a preliminary analysis, 41 percent of restaurant owners reported financial problems so severe that they might have to shutter operations by the end of the year.

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That means nearly half of the 300,000 Hoosiers working in restaurants are facing unemployment or drastically reduced hours as the pandemic surges throughout the state.

“These are very dire times for the industry,” Hji-Avgoustis said. “If Indiana officials decide the state must reimpose restrictions to mitigate the spread of the pandemic—which may include reducing hours or further limiting seating—many restaurants will close for good. Most can’t survive on just providing take-out.”

His research found that restaurant and dining operations pump about $13 billion into the state’s economy each year. Restaurant businesses are often financed through personal credit cards, personal or family savings and through mortgaging the owners’ homes.

The National Restaurant Association has estimated that the restaurant industry is on track to lose $240 billion by the end of the year. It has repeatedly called on Congress and President Trump to provide targeted relief to save the industry.

The Association estimates that at least 100,000 restaurants nationwide will close before the end of 2020, Hji-Avgoustis noted.

The professor also is conducting a research project to examine the impact of the pandemic on the hotel convention industry in Indianapolis and its major competitors (Chicago, Nashville, St. Louis, San Antonio and Kansas City). Hji-Avgoustis pointed out that meetings, conferences and events-related tourism generated more than $752 billion nationwide in 2016 but can be impacted adversely when disaster strikes.

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Indianapolis convention tourism generates $5.5 billion in revenue and $725 million in state and local taxes, according to Visit Indy’s latest annual estimates.

Hji-Avgoustis plans to release his study in early 2021. “We are examining how Indianapolis can create pragmatic policies to react to the economic challenges, illustrating that leveraging innovative policies and looking at new markets may assist in the rebounding of convention tourism in Indianapolis and its competitors.”