Six years after the pandemic popularized outdoor dining, restaurant patios continue to be vital revenue drivers. However, operators face new pressures as landlords factor patio space into higher rents, and unexpected factors like extreme weather and major events impact summer traffic. A look at the evolving economics of patio dining in Canada.
Patio dining, once an emergent lifeline during the COVID-19 pandemic, has cemented its place as a fundamental pillar of the Canadian restaurant industry. Yet six years after outdoor seating became a necessity for survival, operators report that these spaces are no longer the unequivocal financial boon they once were, as their value is now baked into steeper rental costs and they face new headwinds from climate and event calendars.
For many restaurateurs, the patio was nothing short of a savior. Keenan Senecal-Junkeer, who owns two Vancouver restaurants through the Birds & The Beets Food Group, credits the city's street-side patio program with transforming his business. His Chinatown location's small patio was expanded in 2020, and the program enabled him to finally build a patio at his Gastown site after years of regulatory hurdles blocked the possibility.
He called the new Gastown patio a "game changer" that allowed the business to stay afloat. The additional space makes his establishments roughly 40 per cent busier in the summer, translating to a significant 20 to 30 per cent increase in sales. This trend is reflected in broader data. According to OpenTable, reservations for outdoor dining in Canada rose 24 per cent year-over-year, with July being the peak month.
Court Desautels of The Neighbourhood Group of Companies, which operates five restaurants, says patios boost summer sales by 10 to 20 per cent and increase beverage revenue by up to 15 per cent. At their pub, an extended patio expands seating by about 50 per cent, creating a packed atmosphere that directly fuels sales growth.
However, the initial "free lunch" era is over. Landlords now comprehensively factor the revenue potential of a patio into lease agreements, driving up the price per square foot. Senecal-Junkeer experienced this firsthand during a 2023 lease renewal, where the patio's existence directly inflated his rent.
Beyond rent, restaurants incur direct costs: Aisling Farrelly, owner of the George Street diner in Toronto, pays the city about $4,000 annually for her patio permit and approximately $9,000 to rent infrastructure like railings and furniture, plus extra staffing costs for the season. These cumulative expenses mean the return on investment is no longer a guarantee. Farrelly opened her 45-person patio in 2020 to navigate the pandemic and it helped her survive.
But on a hazy July afternoon in 2023, with smoke from forest fires degrading air quality, her patio lay nearly empty. She does not expect to recoup her investment this year, citing about 25 per cent less weekend traffic than usual. The causes are twofold: unusually hot weather that deters diners and the FIFA World Cup, which Canada co-hosted, diverting attention and customers away from local patios. The experience underscores a new reality.
While patios remain critical for capturing summer revenue and creating vibrant atmospheres, their profitability is increasingly squeezed by higher fixed costs and vulnerable to external forces beyond a restaurateur's control. The simple equation of adding outdoor seats equaling easy profit has been replaced by a more complex calculus of rent, permits, infrastructure, weather, and competing events.
For Canadian restaurants, the patio is now an essential but expensive component of the business, demanding careful management and resilience in the face of an unpredictable environment
Please follow us on Google to support usRestaurant Industry Outdoor Dining Patios COVID-19 Pandemic Commercial Rent Revenue Canadian Businesses Hospitality Summer Traffic Operating Costs
Canada Latest News, Canada Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Gold remains trapped below $4,000 as housing sector shows mixed signalsGold prices stay below $4,000 per ounce despite uncertainty in the U.S. housing sector. Housing starts rose 19% in June, beating expectations, but building permits fell 3%, indicating limited future recovery. Gold sees little reaction, trading at $3,966.60.
Read more »
Remains of 2 girls who died at residential school brought home to Łutselk'eDeninu Kųę́ First Nation Chief Louis Balsillie escorted Denise Boucher and Alice Abel’s small wooden caskets by plane on Thursday morning to Łutselk'e. The remains were then driven to a graveyard next to the Snowdrift River, where a burial ceremony was held for each of them.
Read more »
SYRUP Token Remains Stable Amid Broader Crypto Market DeclineThe SYRUP token's price declined alongside the broader crypto market, but on-chain performance remained positive, with increasing capital deposited across Maple Finance.
Read more »
Significant Amount of Decentralized Exchange Liquidity Remains IdleA recent report by Dune has found that a substantial portion of liquidity contributed to decentralized exchanges is not being utilized to facilitate faster trades, resulting in significant lost revenue for liquidity providers.
Read more »