The pandemic is hopefully almost over but it is unlikely that NYC will look the same as it did prior to it. It is predicted by many, including economists, that many changes are going to happen, from residential and commercial real estate, to entertainment and eating out. NYC is likely to attract a poorer, eclectic and younger group of people.
What can we expect NYC to look like?
According to Barbara Denham, senior commercial real estate economist with Moody Analytics “The new, New York City will just look a little bit different.”
People have gotten used to a different way of being, new modes of entertainment, perhaps have become more solitary, using gaming platforms like an EasyBet Casino for entertainment.
The city emptied out during the pandemic with lots of families moving out of the city during the time of lock down. Not a lot of these families will likely return. However, some will, along with lots of new people interested in the opportunities offered by the city.
Christopher Heywood of NYC & Company, the department in charge of tourism in the city, says that “When the lights get turned on, they’re going to want to get back”. It is thought that the city won’t return to pre-pandemic levels, perhaps until the year 2025 which is some time away although this refers to the whole economy. Some parts of the city will return to normal earlier than that. Denham is optimistic and says “Hopefully by the holiday season we will see a return of tourists, a return of all the restaurants and certainly a return of Radio City Music Hall, Broadway shows, because that’s what we really need, to restore hope.”
The opening up of Broadway
According to Charlotte St Martin, the president of the Broadway League “Until Broadway is open, New York is not open.” And she goes onto say that “Broadway stands for New York to most of the world.” And most people agree that the city is unlikely to return to normalcy until Broadway is open.
St. Martin expects to see Broadway shows reopen at the end of summer or failing that, early fall. But that means that all seats will have to be taken. It will not be possible to ‘social distance’. The theatres can’t afford to have half-filled venues. St Martin asserts that ‘Four out of five shows on Broadway don’t even recoup their investment so we must do everything we can to fill those seats. We can’t spread those seats out; there’s no way to financially make it.” She emphasizes “There is so much pent-up demand to get back. We think we’ll build up slowly and then get back better than ever.”
The restarting of Tourism
It is expected that tourists will return just as soon as Broadway reopens. It is predicted that 38 million people will visit New York City by the end of 2021. Much higher than in 2020 but still only half the normal amount prior to 2020.
Heywood predicts “I see the ship turning later this summer, into the fall and there’s going to be an extraordinary amount of pent-up demand.”
In order for NYC to survive, tourism must flourish. People need more than the NYC landmarks and other attractions to draw them back to the city right away.
Charles Nolan, general manager of Big Bus New York, says “We are placing a lot of hope into the third quarter of 2021 simply because of the vaccine rollout and the enthusiasm of people to travel.”
Currently the city is marketing New York to those people who live within driving proximity and then plan to branch out further as more people receive the vaccine. After that they will begin targeting the world again. According to Heywood “We’re going to need a lot of promotion to be able to compete with the world.”
During the pandemic many restaurants and cafes created outdoor spaces and patios which are likely here to stay. Visitors enjoy this addition as it gives a European feel to the whole dining experience. However, according to Andrew Rigie, executive director of the NYC Hospitality Alliance, “New York City’s restaurant industry has been absolutely decimated. We’ve lost thousands of beloved restaurants and countless more are teetering on the edge of survival.”
But he does believe that with the support of local and state and federal authorities there is reason to be optimistic. He says “If we seize the moment among all the tragedy, among all the doom and gloom, we can rebuild ourselves back into a restaurant renaissance and a new roaring ‘20’s.”
The hotel industry
We have seen the shutting down of many hotels in NYC and many of these will not re-open. John Fitzpatrick, the owner of two hotels in the city, says “There is little light in the tunnel”. He had temporarily close down one hotel last year. The other hotel has a very low occupancy, about 10%, like all other hotels in the city. Fitzpatrick states that “We can’t open this hotel until we see that hotel at least at 50 percent. Why would we, we’re losing money even open.”
But he is feeling optimistic that soon, perhaps by the summer there will be increased demand and he’ll be able to open the hotel. Changes have taken place. Now visitors will be greeted with sleepers when they enter. They will also find plastic covers on the remote control and touch-free temperature checks. Fitzpatrick says “We’re just trying to think a little bit extra, a little bit different.”
Bringing back employment
Since March 2020 more than 900,000 people have lost their employment. That is way more than the number who lost their jobs after 9/11.
Denham points out that “We did recover from 9/11 with a lot of resilience. I think there’s a lot of faith in our New York City economy that we can come back from this like we did then.”
According to economists, the city is having a “rent reset”. Rental prices went down by approximately 15% across the city because so many people left. It could be they will stay this way for the next few years. Partha Deb, economist at Hunter College says “Some people will move out ad others will happily take their place.”
Many economists also believe that new businesses will take over the now empty storefronts but there will be a difference in what these shops are providing. According to Denham, “I see a lot of potential in New York City retail sector for either entertainment use, health use of dining use.”
With so many more people now working from the comfort of their homes, the commercial real estate market is likely to be one of the last industries to recover. Denham suggests that “A lot of people will want to come back to work but in terms of needing office space, we’re just not going to be needing to expand and, if anything, most companies will probably shrink their footprint, their office footprint, over the next few years.”
However, there is time for businesses to make changes and decide how and what to do with their office space as most leases in the city run for around 9 years, so there is some time for the market to recover.