Should You Keep Your Restaurant Open on a Federal Holiday?

Should You Keep Your Restaurant Open on a Federal Holiday?
It may only be profitable if you have higher-than-average traffic coming through the door.
by Mallory A. Russell Aug 28, 2018 — 3 min read
Should You Keep Your Restaurant Open on a Federal Holiday?

Who doesn’t love a federal holiday? For consumers, it’s all three-day weekends, parties, vacations, and amazing retail sales.

If you run a restaurant, the prospect of a federal holiday may not be quite as exciting. Overtime requirements mean that staying open on a holiday costs more than the average weekday. So it’s only profitable if you have higher-than-average traffic coming through the door.

To get an idea of how restaurants across the country approach this issue, we looked at Square seller data from Labor Day 2017 to see how many restaurants in each city closed and how many stayed open during the holiday.

Stay Open or Close Data

Let’s start with cities that closed their doors for Labor Day last year. More than half the restaurants in Phoenix closed for Labor Day last year. That was the highest percentage in the country. It was followed by Orlando (41 percent), Minneapolis (38 percent), Salt Lake City (37 percent), and Atlanta (36 percent), to close out the top five.

Many of the cities in the top 10 are well-trafficked tourist destinations. Four of them were among the 10 most-visited cities in the U.S. in 2017, and four were among the most-visited cities on Labor Day in the same year. So the percentage of closures might have less to do with how many people frequent those destinations than it does with overtime requirements or cultural norms.

Among those cities where the most restaurants are open, San Antonio comes in at number one — 96 percent of its restaurants are open. It’s followed by Brooklyn (89 percent), Sacramento (85 percent), Washington, D.C. (84 percent), and Seattle (83 percent) rounding out the top five.

Many of the cities that remain open at high percentages aren’t surprising. New York and Brooklyn, Las Vegas, San Francisco, and Washington, D.C., are also among the most-visited cities in the country (whether it’s Labor Day or any other time of year).

Should you stay open on a federal holiday?

While broad trends like this can help you determine what is relatively normal in your region, you shouldn’t base your decision on trends alone. You need to look at the norms in your area, labor costs, and the performance of your business during similar periods.

Here are a few questions to ask:

How much business did I do on the same holiday last year?

Your point-of-sale system should provide built-in analytics so you can pull sales reports by day or weekend (and location if you have more than one shop). If you don’t have data from the holiday in question, pull data from a similar holiday. If you’re a new business, that’s when you want to look at broader trends — in your county, city, and neighborhood.

Are there activities in my area that bring in a lot of visitors? What do locals do during the holiday?

If you’ve lived in your city or town for a while, you probably have a good idea of what’s going on during a holiday weekend. Maybe your area hosts a special event or festival that brings a lot of people into town. Or maybe it’s very quiet since a lot of locals leave.

If you haven’t lived in your area for long, read through local newspapers, community calendars, etc., to get an idea of what goes on during the three-day weekend.

What are your neighbors doing? What is your competition doing?

Talk to your neighbors, especially if you are a new business. They could provide a valuable point of view as to whether or not it’s worth it to stay open.

You should also check up on what your competitors’ plans are. If they’re open, it doesn’t mean you have to be also, but it could inform your opinion.

How much staff do I need to stay open?

Based on your data and your community research, think about how much staff you want on hand if you stay open. Do you need to be fully staffed or could you get by with fewer workers? (Err on the side of caution here — you don’t want to be understaffed.)

Do I want to stay open all day?

Just because you’re open on a holiday doesn’t mean you need to keep regular hours. If you usually serve breakfast, lunch, and dinner, do you want to just stay open for breakfast and lunch? If you’re a cafe, could you open later?

A shortened day could not only be more profitable but also could make your employees quite happy.

If I stay open, what are the labor costs?

If you’re considering staying open on a holiday, make sure you’re up to date on all the overtime and holiday labor requirements by consulting an attorney or an accountant. These laws vary by state and, in some cases, by county and city.

Come up with an estimate for your labor costs. Add that to your other operating costs and determine what kind of revenue you would have to bring in to make a profit. If it seems reasonable, based on your research, go ahead and stay open. If not, close up.

Whichever way you go, make sure you communicate it to your customers via email, social media, your website, review sites, and any other communication channels available to you. Whether or not you plan to stay open, this keeps you top of mind.

Mallory A. Russell
Mallory Russell is the Head of Content Marketing at Square.


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