According to the July 2020 Rent Survey from NYC Hospitality Alliance, a nonprofit trade organization representing the hospitality industry in New York City, rent – often the biggest fixed cost for small businesses in New York City – continues to be a major problem for restaurant, bar, and club owners during the COVID-19 pandemic.
The survey of nearly 500 owners and operators of restaurants, bars, and nightlife establishments across the city found that a growing number of businesses could not pay rent in July. 83% of businesses could not pay full rent in July and 37% of businesses reported paying no rent at all.
Adding to the challenges that restaurants, bars, and nightlife venues face are inflexible landlords, some of whom have their own set of difficulties. 71% of landlords would not waive portions of rent due to COVID-19, 61% would not defer rent payments, and 90% of landlords would not formally renegotiate leases.
With indoor dining service still on pause and outdoor dining service not generating sufficient revenue to cover rent and other expenses, small business owners in the industry continue to express significant concerns about surviving the pandemic and staying viable in the future.
“Restaurants and nightlife venues are essential to the economic and social fabric of our city, but they are struggling to survive and absent immediate and sweeping relief so many will be forced to close permanently,” said Andrew Rigie, executive director of the NYC Hospitality Alliance.
“While complying with the necessary pause, our industry has been uniquely and financially devasted,” he continues. “Small businesses urgently need solutions from government leaders at the city, state, and federal level, inclusive of extending the moratorium on evictions, extending the suspension of personal liability guarantees in leases, pausing commercial rent taxes, providing landlords with needed support, and infusing small businesses with enough cash to weather the storm.”
The July 2020 Rent Report surveyed 471 restaurants, bars, nightclubs, and event venues in New York City about their rent obligations during COVID-19. The survey data was collected between July 15th to July 28th 2020.
Some of the key findings include:
- 83% of respondents did not pay their full July rent.
- Of the 28.6% of landlords that waived rent during the COVID-19 pandemic, only 1/3 waived more than half the rent.
- 90% of respondents did not renegotiate their lease due to the COVID-19 pandemic.