New York City Hospitality Alliance (NYC Hospitality Alliance) recently released the results of a survey conducted in the restaurant industry, revealing that more than 70% of operators reported worse business this summer compared to last year, citing reasons such as high labor costs, customer attrition, and overall regulatory environment.
The report indicated that out of 354 restaurant operators interviewed, 72% stated that their revenue between June 1 and August 31, 2024, had decreased compared to the same period in 2023, while 22% mentioned their revenue remained the same as last year.
Among those with worse business performance than the previous year, 43% experienced a decrease in sales ranging from 1% to 10%, 29% saw a decline of 11% to 20%, and 24% witnessed a drop of 21% to 30%. Furthermore, 4% of operators reported a staggering decrease of over 31% in their store’s revenue.
The report further highlighted that the most concerning issue for restaurant owners is labor costs. 53% of operators believed that the high cost of labor was the key challenge in operations, followed by a lack of customers (45%), and issues like the overall regulatory environment (39%), commercial rent (36%), inflation (32%), and insurance rates (31%) were all identified as challenges for the New York City restaurant industry.
Regarding the business outlook for this fall (September 1 to November 30), 41% of operators felt optimistic about the coming months, 33% were pessimistic, and 26% were uncertain about the future.
Executive Director of the Alliance, Andrew Rigie, voiced concerns over the declining revenue, lack of customers, and high operational costs as alarming signs, indicating that many restaurants and bars in New York City are struggling.
“Government leaders should take note of this warning, focusing on policies that support local businesses rather than those that escalate costs and bureaucracy,” Rigie stated.