Deserted university campuses undercut businesses that rely on student spending

·3 min read

Some days, hours go by without a single customer coming into Renaissance Coffee at Simon Fraser University in Burnaby, B.C.

"We have never seen or experienced anything like this, it has been very devastating for us and the staff who have been with us for 20 or 15 years. Now they're all sitting at home waiting for things to improve," said owner Parminder Parhar.

He has laid off nine staff and is running the coffee shop with his wife, just like the old days. They started the business 25 years ago and have three locations at the Burnaby Mountain campus, but only one is open right now.

Most post-secondary institutions are offering online classes and have shut down lecture halls, leaving campuses empty.

"Right now, it seems like a ghost town," said Parhar.

The lack of foot traffic has put a serious dent in revenue.

"We probably only do, best case scenario, five per cent of what we did before ... or even less," he said. But he believes the university has taken the right approach by limiting the number of people on campus.

Tina Lovgreen/CBC
Tina Lovgreen/CBC

He keeps the one location open to serve the few people that do come by.

"Whoever is here in the community, we are here to serve and we have been part of this community for many years, around 25 years, so we still like to be part of that. Another thing is nothing to do sitting at home, so better to do something meaningful," he said.

Even businesses not located directly on campus are feeling the hit. Rice Burger is less than three kilometres from the University of British Columbia and heavily marketed to university students.

"Our strategy was about 60 to 70 per cent university kids. We took a hit for sure," said co-owner Jackson Uppal about the arrival of pandemic restrictions last spring.

Tina Lovgreen/CBC
Tina Lovgreen/CBC

Uppal and his best friend from high school, Austin Chen, started the concept four years ago. There's a giant graffiti wall, blasting R&B hits and a unique menu offering kimchi fries. Plus the 99 B-Line is just steps away.

"It was a little bit of a kick to the groin at first, because we have invested so much in student life and when not that many students are on campus, we had to MacGyver. How do we get back?"

They've pivoted and started focusing more on drawing in families through various promotions and marketing strategies. Food delivery apps have also been a saviour — the apps are now 70 per cent of their business.

University budgets impacted, too

Universities and colleges have also seen serious impacts to their budgets due to the pandemic. The University of British Columbia is projecting a $100-million deficit this fiscal year, which is $125 million lower than initially expected, due to "strong student demand," it says. The number could still change in February.

Simon Fraser University says it also has lost revenue due to pandemic restrictions, but says it is no longer forecasting the $9-million shortfall projected in its 2020 budget.

"Losses have been offset by stronger than anticipated undergraduate enrolments this past year. Our non-endowment investment income is also projected to be much stronger than anticipated," the university said in a statement.

Universities have lost revenue for a variety of reasons. From reduced occupancy at student residences so that proper safety measures can be carried out, to lost parking revenue, cancelled conferences and the closing of food establishments, museums, galleries.

There have also been additional costs.

"We increased expenditures to support online instruction, additional cleaning, and student financial assistance," read a statement from Peter Smailes, UBC's vice-president of finance.

Smailes said the university has undertaken "a range of mitigating strategies including travel restrictions, a hiring chill, and the reduction in discretionary spending."

Recovering from the deficit will be a multi-year project for the university. While, SFU is also looking to identify administrative saving opportunities and minimize hiring where possible.