A record 73 restaurants in D.C. permanently closed in 2024, and a recent survey of restaurant operators by the Restaurant Association of Metropolitan Washington found more than half expect conditions to worsen in 2025. That’s 21% more than said so in a similar survey last year.
Restaurant operators continue to face higher labor expenses, rising costs and lease renewal terms that are pricing them out of business. But an equally large problem is D.C. diners who are growing weary of rising menu prices, tacked-on service fees and confusing tip expectations due to DC.s minimum tipped wage law.
A separate survey of D.C. residents found 47% are eating out less, 32% are selecting less expensive restaurants, 31% are ordering fewer dishes per visit and 24% are skipping alcoholic drinks.
Worse yet for D.C. restaurant operators is that almost half of D.C. residents surveyed say they are now more likely to chose restaurants in Maryland or Virginia.
Restaurant owners are well aware of diner frustrations and changing habits.
“We ask that you continue to be patient with us as we sort out and figure out a path forward. And we will. Our industry is resilient,” said Shawn Townsend, president and CEO of the restaurant association.
Townsend said the association is advocating for change on behalf of the restaurant industry.
“Advocating for streamlined permitting and licensing. Let’s make sure that we reduce the red tape for restaurant owners. Ensuring safe and accessible public transit on the weekends so these folks can use these services to dine out. Tax incentives are a big one. Tax relief and grants for small businesses.”
Finding ways to work with landlords on behalf of restaurant tenants is also an urgent focus for the
association.
This summer could bring a new tipping point for D.C. restaurants.
“We were at $8 an hour from an increase in tipped wage. Now we’re at $10 an hour. We’re due for another increase on July 1. I think our members are quite concerned about what the end of this year could look like if we are to see another increase in tipped wage,” Townsend sad.
The Restaurant Association has forecast that if the tipped wage increases by another 20% in July, restaurant closures will spike by 50%, boosting closures beyond 100 restaurants, and will slow restaurant industry job growth by 21%.
Restaurants continue to cut back on hours of operation and employees to counter rising labor costs. Three out of four have reduced their workforce, even more in the full-service casual restaurant category.
“We’ve already cut everywhere we can cut,” the restaurant association quoted one unidentified restaurant owner as saying. “We’ve reduced hours, eliminated positions, and streamlined our menu, but with another wage increase coming in July and fewer office workers dining out, I honestly don’t know if we’ll make it to 2026.”
How to more broadly appeal to weary D.C. diners, other than ask for patience? Townsend appeals to their willingness to spend money locally.
“Our restaurant scene here are local and independently owned. That’s about 90%. You don’t find that in New York City. You don’t find that in Los Angeles or Miami or Chicago. Yes, we have some chains here, but the makeup of our industry continues to be people who live here, who are from here, who migrated here,” he said.