The market couldn't serve indoor diners all month.
New York City’s return to indoor dining right before Valentine’s Day arrived at a critical juncture. When Gov. Andrew Cuomo cleared operators for 25 percent capacity, reservations for the popular dining-out occasion quadrupled, according to OpenTable. While still half of 2019 numbers, a positive turn nonetheless for the Big Apple, and one it sorely needed.
One out of every six restaurants has shuttered since COVID-19’s arrival, per the New York State Restaurant Association. And data released Tuesday by the NYC Hospitality Alliance painted a troubling picture for the future of the “Restaurant Capital of the World,” it said.
A survey revealed 92 percent of more than 400 respondents couldn’t afford to pay rent in December—a number that has steadily increased throughout COVID. In June, it was 80 percent. By July, 83 percent. In August and October, 87 and 88 percent, respectively.
Pre-coronavirus, New York City housed some 25,000 restaurants, bars, and nightclubs, employing north of 325,000 people.
In the Alliance’s survey, only 40 percent of tenants’ landlords reduced rent in relation to COVID. Just 36 percent deferred rent. And 14 percent of businesses said they were able to successfully renegotiate leases (61 percent have not; 24 percent are in good-faith negotiations).
Throughout December, New York City’s restaurants and bars were restricted to outdoor dining as temperatures dropped. Restaurants outside the five boroughs, however, were able to operate with highly regulated indoor dining at 50 percent occupancy, as they have since June.
“A return to indoor dining at 25 percent occupancy offers a glimmer of hope for New York City’s struggling restaurants, but business owners and industry leaders insist a path to reopening at 50 percent occupancy is necessary to continue treading water, and that only robust and compressive federal stimulus can truly save the industry, which nationwide has lost some 110,000 restaurants and 2.5 million jobs, 372,000 jobs of which were lost in December alone,” the Alliance said.
“We’re nearly a year into the public health and economic crisis that has decimated New York City’s restaurants, bars, and nightlife venues,” added Andrew Rigie, executive director of the NYC Hospitality Alliance. “While the reopening of highly regulated indoor dining is welcome news, we need to safely increase occupancy to 50 percent as soon as possible, and we urgently need robust and comprehensive financial relief from the federal government. We will continue to work with Senator and Majority Leader Schumer to ensure that the $25 billion restaurant industry recovery fund is passed as part of the Biden administration’s emergency relief plan, and advocate for the enactment of the RESTAURANTS Act to save as many local eating and drinking spots and jobs as possible.”
A deeper look at the survey:
In December 2020, your business paid how much of rent?
- Paid none: 45.2 percent
- Paid some: 46.4 percent
- Paid all: 8.4 percent
From the respondents who paid some rent, what percentage did you pay?
- More than 50 percent: 22.8 percent
- 50 percent: 49.5 percent
- Less than 50 percent: 27.2 percent
Waived rent during the pandemic in relation to COVID-19? Nearly 40 (39.7) percent did so.
Of those, what percentage of rent did your landlord waive?
- Less than 50 percent: 41.4 percent
- 50 percent: 41.4 percent
- More than 50 percent: 17.2 percent
Has your landlord deferred any of your rent in relation to COVID-19?
- No: 63.5 percent
- Yes: 36.5 percent
Have you renegotiated your lease in relation to COVID-19?
- No: 61.6 percent
- Yes: 14.1 percent
- In good-faith negotiations: 24.3 percent