The restaurant industry is essential to New York City. From small, family-owned restaurants and food carts to four-star world-famous establishments, the City abounds with restaurants that offer cuisines from every corner of the globe. New York City's restaurant industry had 23,650 establishments in 2019.*
Since March 2020, the restaurant industry has been hit very hard by the COVID-19 pandemic. Mandatory closures, stay-at-home and social-distancing orders, the onset of a severe economic recession, and travel restrictions have resulted in unprecedented upheaval for the industry. As a result, many restaurants and bars have closed or significantly reduced their operations.
The New York City restaurant industry accounted for about 1 in 12 private sector jobs and establishments citywide in 2019 (8.1% of jobs and 8.7% of businesses). Most restaurant employment in the City (77%) was in full-service restaurants that offered wait-service dining, and in limited-service restaurants such as fast-food locations, pizzerias and cafes. Bars accounted for another 5% of the jobs, and the rest of the industry included establishments such as snack bars, buffets and caterers.
Reflecting increased demand for both full-service dining and takeout services, the net number of restaurants and bars in the City increased by more than 7,000 from 2009 to 2019 to reach 23,650 establishments. This represented a net increase of 44%, more than double the rate of growth of businesses citywide (19%). Most restaurants and bars are small and reflect great diversity. In New York City, 80% have fewer than 20 employees (less than 1% have 500 or more employees).
In February 2020, more 315,000 people were working in New York City's restaurant industry. In March 2020, New York City became the epicenter of the pandemic in the nation, causing unprecedented effects, and by April, restaurant employment had dropped to 91,000 jobs as severe restrictions were imposed on business practices. As rules loosened and outdoor dining was permitted, employment rose, reaching 174,000 jobs in August.
Restaurants that remained open during stay-at-home orders experienced substantial declines in revenues. Womply - a software services company which tracks credit card transactions from hundreds of millions of cardholders - estimates that average daily revenues at these establishments began to decline on March 10 and reached their steepest drop on March 22, when they fell by 81% compared to a year earlier. Revenues at the City's bars had even steeper declines, falling by 94% on March 22 and, again, by 94% on April 26.
Since the pandemic began, many restaurants have explored new business models in order to generate revenues. Some establishments that had not offered takeout and delivery began those services. Others operated as specialty food markets offering items not available at local stores. Still others sold do-it-yourself kits with menu items such as pizza and tacos, or offered gourmet meals requiring minimal preparation. With outside financial support to cover costs, some restaurants became food banks.
Another strategy involved obtaining permits for safe outside dining. On June 19, 2020, the City started the Open Restaurants program, which issued special sidewalk and roadway permits. At the end of June, the City expanded its Open Streets program (which closed off streets to vehicle traffic) to allow restaurants that participated in the Open Restaurants program to set up tables in the traffic-free streets. Throughout the summer, new locations and additional hours were added to the Open Streets: Restaurants program. While the programs were slated to end in the fall, the Mayor intends to make them year-long and permanent.
As of the first week of September, a total of 43% of restaurants and bars citywide had received sidewalk and/or roadway seating permits. This included 50% of establishments in Manhattan, and more than 40% each of those in Brooklyn and Queens. The ratio of establishments in the Bronx and Staten Island were lowest at 30% and 20% respectively.
While the Womply data shows a rebound for open restaurants, Open Table data shows reservations have been slow to recover in the City, most likely because indoor dining has not yet been implemented and closures remain higher among “fine-dining” establishments. As an example, of 15 Michelin two- and three-starred restaurants, only two are allowing reservations for outdoor dining. Five of the 15 remain closed, and the remaining eight are operating for takeout and delivery only. As of August 18, Open Table reservations were more than 80% lower than a year earlier, and much lower than globally, nationally or statewide.
Restaurants are one of the keys that make New York City a world-class metropolis. Restaurants are essential to defining what New York City and its neighborhoods are, from a tourist and international business destination to the City’s rich cultural identity and immigrant communities. These businesses are a vital element that helps draw concentrations of retail and arts and entertainment to thrive in the City.
The COVID-19 pandemic has affected this sector to an unprecedented extent and in ways that have never been seen before. It has impacted individuals’ jobs and income, business owners, restaurant patrons and neighborhoods. A key driver of New York State’s recent success in keeping case rates down (while reopening) is its clear parameters for the phased reopening, and closure where necessary. These parameters are backed by data that is available to policymakers and the public to use to make informed decisions. Reopening has also been aided through defined protocols that can be easily followed by individuals and businesses.
We have analyzed sparkling wines listed in Italian restaurants in New York City.
These same lessons hold for indoor dining in New York City. Guidance that follows from general success in reopening food and drink establishments across the state should, where needed, be refined for the unique challenges that New York City's density can pose, and should be provided to owners in a manner that is easy to follow and adhere to. The guidance should also change as public health conditions allow. Recent reopening guidelines for 25% of indoor dining capacity provide a step forward in this direction and can and should be enhanced based on feedback from businesses. New York City should also continue to leverage innovative programs to support new or developing operating models where possible, including outdoor dining, commercial lease assistance, and support for takeout and delivery operations.
Author: David Beck
Excerpt from Regions report. To learn more CLICK HERE