The restaurant industry as a whole has been hurting ever since the coronavirus outbreak began. But in New York City, the damage has been substantial. It's estimated that 75% of New York City restaurants lost more than half of their revenue in 2020, and this past January, almost half of the city's restaurants were still reporting average weekly revenue declines of 90% to 100% compared to a year prior.
A big part of the problem is that in-person dining was off the table in New York City for much of the pandemic. And even once it was allowed, there were restrictions in place. Not only were dining establishments forced to maintain capacity limits, but they were also subject to a midnight curfew. Plus, bars that don't also serve food were not actually allowed to seat customers.
But now, these rules are changing, and it could be the jolt New York City restaurants and bars need to spring back to life.
Will the bleeding finally stop?
On May 3, New York City bars were given the green light to allow customers to come in, sit down, and have a drink. And that, frankly, is huge. Many bars in the city were forced to close temporarily due to the previous restrictions, but now, as more and more city residents get vaccinated, the demand for a seat at the bar is apt to explode.
The midnight curfew on New York City restaurants is also being lifted for outdoor dining starting on May 17, and for indoor dining beginning May 31.
Now for anyone not familiar with New York City, a midnight curfew may not seem like such a big deal. But in a city that never sleeps -- one in which it's common practice to first head out for the night after 11 p.m. -- the lifting of that curfew is significant. It means restaurants are apt to enjoy a greater stream of revenue -- not only from late-night diners, but from bar patrons who need a good meal at 2 a.m. to help absorb the beverages they've just finished consuming.
Great news for investors
The lifting of these restrictions is very positive news for commercial landlords, many of whom have struggled themselves over the past year as restaurants have either shut down completely or sought to defer their rent payments due to a lack of revenue. Now that dining establishments can operate more freely, there should be fewer closures to worry about, and restaurants may soon be better positioned to catch up on missed rent and make their landlords whole.
Of course, these loosened restaurant restrictions are coming on the heels of a big announcement by New York City mayor Bill de Blasio, who's confident that by July 1, the city will be in a position to reopen in full. That means no capacity limits in stores and restaurants, and a return to what city life looked like before the pandemic -- or the closest thing to it.
It's still unclear what masking rules will be in effect when July rolls around and whether restaurant guests will have to mask up when using the restroom or walking to and from their tables. But either way, things are looking up for New York City's dining industry and the investors who rely on that industry to make their own money.