New York City restaurants face a double whammy of new coronavirus restrictions and the threat that cold weather will reduce patron activity for outdoor dining areas.
Lately, the virus pandemic is on the rise in the NYC metro area, forcing Mayor Bill de Blasio to reimplement curfews and limit capacity at restaurants.
Last weekend, NYPost said citywide restaurant revenues plunged as much as 30% because of the new measures.
To make matters worse, the threat of cold weather next month could be disastrous for the city's beleaguered restaurant owners.
WSJ reports many restaurant operators have stockpiled propane and electric heaters to keep patrons warm during the winter months while dining on outdoor patios or sidewalks. Some operators warned the cost of new heaters and their installation is "hard to stomach."
"God forbid the mayor announces another shutdown now," said Philippe Massoud, the chef at Lebanese restaurant Ilili in Manhattan. "I think we would all march to our graveyards, business-wise."
However, for the next couple of weeks, restaurants in the city will be blessed with warmer weather trends, something we outlined Monday as natural gas futures plunged on a warmer weather outlook report. But come December, temperatures may dive again, and compound colder weather with new restrictions, well, it may result in another wave of restaurant closures.
In a recent report, Goldman Sachs points out that outdoor dining in the metro area has jumped from 10% to 40% between June and September.
Goldman says below the 40°F mark, consumer activity would slump, producing the risk consumer spending would plunge.
The indoor dining ban was dismantled in late September and remains limited to 25% capacity. New restrictions are forcing restaurants to now shutter operations by 10:00 pm.
"Now our last reservation is at 8 pm," Garry Kanfer, owner of Japanese eatery Kissaki on Bowery, told NYPost. "At 9:45 pm, the check drops, and they are out by 10 pm. People are leaving, but they're upset, even though they know it's not our fault. One diner called to tell me his party would have ordered more food, but there wasn't enough time."
A survey of more than 400 restaurants and bars via the industry group NYC Hospitality Alliance found 88% of them couldn't pay full rent in October. About 30% of respondents couldn't pay rent at all for the month.
"We totally understand the concern about increased infection rates, and public health and safety has to be paramount," said Andrew Rigie, the NYC Hospitality Alliance's executive director. "If we can increase to 50% safely, that's going to be critically important to give these businesses a fighting chance."
The city's outdoor dining program has been a lifeline to thousands of restaurants this summer and fall. As soon as temperatures drop below the 40°F mark for a considerable amount of time - that lifeline will evaporate. Compound slumping patron activity with capacity reductions and curfews, well, it's going to be one winter many restaurant operators in the city will never forget.