Denver Restaurants Struggle to Stay Afloat Amid Rising Costs

New report cites tipped minimum wage hikes, high insurance and utility costs, and public perception issues as major challenges for the industry.

Published on Feb. 28, 2026

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A new report from Denver's Restaurant Liaison Project reveals that running a restaurant in the city has become increasingly expensive, with factors like nearly doubling tipped employees' wages in less than a decade while profits have remained stagnant. The report highlights the struggles faced by local restaurants, with one long-standing establishment, the Blue Bonnet, aiming just to "keep treading" this year.

Why it matters

The restaurant industry is a major economic driver in Denver, accounting for 1 in 12 local jobs and 13% of the city's sales tax revenue. Experts warn that without changes, the future could be bleak for independent restaurants, with the potential for more empty storefronts and a reduction in full-service dining options.

The details

The report found that since 2019, the tipped minimum wage in Denver has increased by 95%, while the tip credit that allows restaurants to pay tipped employees less than the full minimum wage has remained the same at around $3. This has led to a doubling of labor costs for restaurants, even as they've had to cut staff. Other factors impacting the industry include rising insurance and utility costs, as well as public perception issues that are keeping customers away from certain parts of town.

  • The tipped minimum wage has increased by 95% since 2019.
  • In 2018, the Blue Bonnet had 98 employees, but by 2024 that number had been slashed to 48.

The players

Blue Bonnet

A 58-year-old restaurant in Denver that is struggling to stay afloat amid the industry's challenges.

Chrissy Strowmatt

The general manager of the Blue Bonnet, who says the restaurant's goal this year is just to "keep treading".

Delores Tronco

A former owner of two restaurants in Denver who now owns one in New York City, and says it is easier to operate in the Big Apple.

Denver's Restaurant Liaison Project

The organization that produced the new report on the challenges facing the Denver restaurant industry.

Visit Denver

The organization that reports that 1 in 12 local jobs in Denver comes from the restaurant industry, which contributes to 13% of the city's sales tax.

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What they’re saying

“Our motto last year was 'Survive 25' and this year is basically just keep treading.”

— Chrissy Strowmatt, General Manager, Blue Bonnet

“Any business person can say, when do you forecast an almost 100% increase in your labor for part of the house?”

— Delores Tronco, Former Restaurant Owner

“We're going to see empty storefronts, we're going to see a reduction in full-service restaurants, especially independent restaurants.”

— Delores Tronco, Former Restaurant Owner

What’s next

The report's authors are calling for changes to the city's tip credit system, as well as a more streamlined process for opening new restaurants in Denver.

The takeaway

The struggles faced by Denver's restaurant industry highlight the need for policy changes and support to help local, independent eateries survive in the face of rising costs and other challenges. Without intervention, the city risks losing the vibrant dining scene that has been a draw for residents and visitors alike.