Boutique PR firms fight for their businesses as the pandemic wallops the restaurant and hospitality industries
ANGELA WEISS/AFP via Getty Images
- Hospitality PR firms have laid off staff, frozen hiring, and cut salaries as the coronavirus pandemic forces people to stay indoors.
- PR firms are fighting to save their businesses by looking for new revenue streams and giving away services for free.
- Some are also hoping to benefit from the $2 trillion stimulus package to help cover payroll and overhead.
- Click here for more BI Prime stories.
The coronavirus pandemic has sent shockwaves across the hospitality and events PR industry as restaurants, hotels and travel businesses shut down.
With more than 110,000 U.S. restaurants likely to shutter in the next month, some prominent PR firms serving that industry told Business Insider they have laid off staff, cut salaries, and frozen hiring as their revenue has shrunk by as much as half.
New York-based Hall PR, with $1.5 million in revenue and whose clients have included the chef David Bouley and New York-based Carmine's, expects more than two-thirds of its billings to disappear. It's laid off a couple staffers, or about one fifth, and cut everyone else's pay by 30%.
"I knew we weren't going to see a lot of client retention," said Steve Hall, owner of Hall PR. "I wasn't afraid of being fired by anyone. They wouldn't have the money to pay us."
New York-based Baltz & Company, whose travel, spirits and restaurant clients include restaurateur Howard Greenstone and the famous Harlem restaurant Red Rooster, also laid off an unspecified number of staffers. The agency employs more than two dozen people, according to its LinkedIn profile.
"The sudden impact on our restaurant clients has been devastating," said Phillip Baltz, president of the Baltz & Company. "Having to let go key members of our team has been equally devastating."
Beyond restaurant PR, the advertising, marketing and comms industries at large are bracing for layoffs while nearly 16 million Americans have lost their jobs.
Some PR firms are pinning hopes on the $2 trillion stimulus package
The $2 trillion stimulus package offers PR firms a potential lifeline as they struggle to meet payroll, but that may not be a silver bullet. After President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act last month, there have been widespread reports of delays and complications.
Last week, New York-based MST Creative PR, facing a 50% drop in revenue, started applying for a loan, said Michael Tulipan, VP and partner at MST.
MST, whose clients include Michelin-starred Sushi Ginza Onodera in New York and the Brooklyn Cider House, reached out to HSBC, only to discover its main contact was laid off. Its inquiry was redirected to another person, who after a couple days of no communication, sent a form to fill out. A few days later, HSBC explained they changed forms and asked him to fill out a new one.
Restaurant PR bosses are looking for new sources of revenue
Small business owners, including PR firms, are bracing for a slow recovery. Dallas Federal Reserve Bank President Robert Kaplan wondered if consumer behavior won't be more cautious.
With a timing of the restaurant industry's comeback up in the air, restaurant PR firms are scrambling to make up for lost revenue by going after new types of clients and giving away services for free.
MST founder and president Magdalena Spirydowicz said she was considering pursuing tech clients. Founded as a firm focused on restaurants and wine, MST often passed on such clients in the past.
Hall said he and his staff are trying to win accounts in the delivery apps and food kit category. In some cases, they're providing their services free of charge, hoping they can turn those prospects into paying clients.
Hall PR helped start the Dining Bond Initiative, which acts as a kind of war bond, selling gift certificates at a discounted price to help restaurant owners.
"What are you going to do?" Hall said. "All of our friends and colleagues are affected in a horrible way. It's devastating, but we have to fight to keep our industry."
Get the latest coronavirus analysis and research from Business Insider Intelligence on how COVID-19 is impacting businesses.
