Though the coronavirus pandemic has battered the U.S. economy on a whole, some industries have been hurt worse than others. And it's certainly fair to lob restaurants into that category.
But while eateries across the country have felt the pain of the pandemic, New York City restaurants took an exceptional beating. The majority of New York City restaurants -- 75% -- lost more than half of their revenue in 2020, according to a survey from New York City Hospitality Alliance, a trade organization. Worse yet, things didn't pick up much in early 2021. Nearly half of restaurants reported average weekly revenue declines of 90% to 100% in January compared to what revenue looked like a year prior.
Now to be fair, that January data was compiled before Governor Cuomo allowed indoor dining to resume at a limited capacity in New York City. (Indoor dining was approved to resume in September, but it was shut down in December and reopened again in February.) Still, those capacity limits are making it very difficult for restaurants to recover from an extraordinarily tough year.
Will targeted restaurant aid help?
In mid-March, the American Rescue Plan was signed into law, and it includes $28.6 billion in restaurant relief. Eligible dining establishments can apply for grants totaling $10 million for restaurant groups and $5 million for individual restaurants. That's effectively free money to help eateries recoup their losses. But many New York City restaurant owners insist that aid alone isn't enough to keep their doors open, and 46% say that in the absence of additional relief, they'll be forced to shutter.
Of course, losing restaurants could cause untold damage to New York City's economy, which has been extremely sluggish over the past year. Furthermore, widespread restaurant closures could hurt commercial landlords, who will have a major vacancy crisis on their hands if even a small fraction of New York's eateries call it quits.
Now the good news is that as things improve with regard to the coronavirus outbreak and the rollout of vaccines, New York City restaurants may be given more leeway as far as capacity goes. In March, restaurants got the green light to open their dining rooms at 50% capacity, which marked an improvement over the previous 25% limit. The sooner that limit goes up, the more revenue restaurants can start to recoup.
What may also help matters is that more companies are making plans to have workers return to the office in the coming months. That could, in turn, bring loads of customers into local restaurants, particularly those that typically rely on the lunchtime rush for the bulk of their earnings. Plus, as tourism in the city opens up, restaurants could enjoy an uptick in demand, and the recent lifting of New York's quarantine mandate should help bring more out-of-towners into the fold.
All told, there's reason to be hopeful that New York City's restaurants will manage to stage a comeback and that many will stave off permanent closures. But commercial landlords should still continue to brace for the possibility that some dining establishments will succumb to the pandemic before it's over.