Kyiv’s vibrant restaurant scene had been booming. Hundreds of new restaurants, bars and cafes came into existence every year, offering diverse cuisines and flavors for any taste.
But that was before COVID-19. The deadliest pandemic of the century forced restaurants to close indoor dining and then adapt to severe limitations that bled finances.
The virus also showed no mercy to the hospitality business. With domestic transportation restricted and the county’s borders closed for long stretches of time, hotels sat empty for much of 2020.
“It’s been the worst year and the biggest crisis,” says Ukrainian restaurant expert and consultant Olga Nasonova.
Unexpected blow
In an attempt to halt the spread of COVID-19 at an early stage, the Ukrainian government placed major draconian restrictions on social life in March, shutting down indoor dining for almost two months. Restaurants responded by imposing salary cuts and laying off workers. With delivery and takeout as the only options, some establishments lost 80% of revenue.
Poster, developer of a high-tech inventory system for restaurants, found that after only a month into the spring lockdown, over 65% of Ukraine’s cafes and restaurants either suspended their activities or closed for good.
According to OpenDataBot, a site that monitors Ukrainian state registries, nearly 160,000 Ukrainian restaurant workers lost their jobs. But the actual numbers are likely much bigger, since many workers were not officially employed, making their status impossible to count.
The swift and harsh restrictions made it impossible to plan.
Viktoria Parhomenko was about to reopen Klukva & Brukva, with a Ukrainian cuisine menu, in March. She found a new location, completed renovation and stocked up for the reopening scheduled for March 16, the day before the lockdown started in Ukraine.
“We never saw that coming,” Parhomenko says. “Of course, there was no reopening.”
Her team switched to delivery and takeout. There were no layoffs, but chefs and managers took 30% salary cuts.
“We lost around 70-80% of the revenue, but at least we survived,” Parhomenko says.
A sign on the door of the 17.804 Indonesian restaurant reads “Closed,” as pedestrians pass it by during the first harsh COVID-19 lockdown on March 18, 2020 in central Kyiv. (Pavlo Podufalov)
Just like Klukva & Brukva, most eateries had to transform operations to stay afloat. Many launched their own deliveries or joined the big delivery services, like Glovo and Raketa, introduced new dishes suitable for transportation and sold food packages for people to cook from at home. Some cafes even offered thermoses with several liters of coffee for takeout.
Though in late June restaurants were allowed to resume indoor dining, new safety requirements included masks, limited numbers of customers per square meter, decreased working hours and endless cleaning and ventilation.
Klukva & Brukva eventually reopened in July as well. Like others, the restaurant largely relied on outdoor dining in summer and fall – a relatively safer option for diners. Its outdoor terrace, which seats about 80 people, accounted for nearly 80% of the revenue during the warm seasons.
Then the “weekend lockdown” hit. Shutting the non-essential operations including dining-in, the policy took effect on Nov. 14 and lasted three weekends. As a result, Klukva & Brukva’s revenue again fell by 50% and it has never recovered.
“It seems to me that now, no one even thinks about profit as everyone is worried about how to survive and continue operating,” Parhomenko says.
Inevitable decision
According to restaurant expert Nasonova, prior to the 2020 crisis, Kyiv’s restaurant scene had been growing rapidly. Last year, 275 new eateries opened, up from 200 new players in 2018.
“The market increased by 10-15%, and that’s a very high growth rate,” she says.
But 2020 changed all that, marking the first year in a long time when the number of closed eateries exceeded the number of new ones, Nasonova says.
Kyiv lost nearly 150 out of roughly 2,000 of its restaurants, from new ones to established players like Solo Pizza chain.
Mozaika was among the casualties. A café serving breakfast and desserts and a wine bar during the night, Mozaika served guests since August 2019. Owner Oleg Nikolaev said lockdown forced him to send all employees on unpaid vacation. He spent the quarantine making desserts and delivering them.
Despite Nikolaev’s attempts to survive, the cafe’s revenue dropped 90% and Mozaika’s staff dwindled to three employees. Outdoor dining didn’t improve the situation much. By October, it shut down for good. With no savings and only debts, “the decision was inevitable.”
Empty rooms
The fates of the food and hospitality industries are closely connected. “No tourists would want to travel somewhere where restaurants are not working,” Ukrainian hospitality expert Vitaly Fedorchenko says.
The crisis is the most destructive that the hotel industry in Ukraine has seen so far. In 2019, hotels all over Ukraine had about 50% occupancy, Fedorchenko says. As of November 2020, that percentage in major cities dropped to 20-27%. When Ukraine closed its borders and stopped most domestic transportation in spring, hotels all over the country had almost no guests for nearly two months.
Vasily Grogol, executive director of the Bursa Hotel in Kyiv, speaks to the Kyiv Post on April 15, 2020. (Oleg Petrasiuk)
Vasily Grogol, the executive director of Bursa Hotel in Kyiv, says revenue plummeted 90% during the first lockdown. To survive, Bursa had to lower its prices and adjust menus for delivery and takeout. The only guests were mainly Kyivans looking for a change in scenery.
Hotels are still struggling since tourism hasn’t rebounded. Ukraine’s imposition of 14-day quarantines for countries in the “red zone” – those with higher infection rates than Ukraine – made it nearly impossible for travel.
Before the crisis, almost all Bursa guests were foreigners. Now, the hotel hosts around 60-70% domestic tourists, with a much smaller share from the U.S. and Europe.
Every crisis also is an opportunity, and for Grogol, the increase in domestic tourism has become one. He is now working on a new hotel complex outside Kyiv, designed for local travelers.
According to Nasonova, the 2020 crisis is still reshaping the market. Masks, hand sanitizers, social distancing and temperature screenings might remain long after the pandemic subsides. And most hotels will not bring buffets back.
“It’s all about global health now,” Grogol says.
