New York restaurants and bars have been unable to pay their rents for months. A study found that 87 percent of restaurants had to take hourly rents in August, an increase compared to the 80 percent who couldn’t pay the full rent in June.
New York restaurants struggle for existence
The corona crisis hit the global economy hard, and small and medium-sized companies in particular are still feeling the financial consequences of the pandemic today. But hardly any other industry is suffering as badly from the Corona crisis as the catering industry in the USA. Restaurant operators in New York City have been unable to pay their rent for months and are on the edge of their own existence.
As a study by the New York City Hospitality Alliance found in September, nine out of ten restaurants, bars or nightclubs can no longer pay their rent in full. New York-based restaurant owner Mehenni Zebentout told the New York Times that he was having trouble paying 70 to 80 percent of his monthly rent of $ 11,500.
In addition, the owner of the property also demands the rental losses of the past months. “We only hope for a miracle. I believe, based on my experience, two out of three restaurants will have to close by December and I will be one of them if the city government does not support it, ”explains Zebentout.
Only 13 percent of the companies can pay the rent
In New York the restaurants had to remain completely closed until June, until food could be served again at outdoor tables. But this low income, after a long time without sales, is not enough for the operators to pay both rent and staff.
From September 30th, the City of New York will again allow tables to be offered in the restaurant itself, but only up to a maximum of 25 percent of the total capacity. Added to this is the lack of tourism, which especially in Manhattan filled the tables in restaurants. Accordingly, according to the study, the New York catering industry is at the apex of collapse.
While in July at least 20 percent of the restaurants were able to afford their rent in full, in August it was only 13 percent. This was the result of the aforementioned survey, in which 450 of 2,500 companies took part.
Winter could intensify the rental crisis
The additional indoor tables will only temporarily ensure better business in New York restaurants, because as soon as winter sets in, eating outside will hardly be possible. Because in addition to the hygiene-related restrictions, the city also prohibits heating with propane heaters.
Hospitality Alliance executive director Andrew Rigie predicts grim prospects for the hospitality industry, as he told the New York Times: “This commercial rental crisis is going nowhere and it’s getting worse all the time and we need to be careful with it. Otherwise we will see more late payments and lose more of our beloved restaurants and bars and jobs and nightlife options for New Yorkers. “
But not only the restaurant operators suffer from this situation, the owners of the property are also hit hard by the rental losses. Because they too have to pay loans and property transfer taxes.
Accordingly, the city and the entire industry are walking a very fine line, which will determine livelihoods.
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