Dinner and a Show: Broadway’s reopening boosts business for restaurants in the Theater District
The closing of Broadway was almost a death knell for local restaurants, but the re-opening has even not fixed all the ills.
For Alan Rosen, the third-generation owner of Junior’s restaurant and bakery, the 18-month closure due to the COVID-19 pandemic marked an unprecedented time at all three of their locations. The two locations in midtown re-opened recently, and Rosen explained that business has already crept up 10% since the first wave of Broadway’s reopening at the start of September. Rosen says his business is slowly recovering and is now only down 30% from before the pandemic. Although he is grateful Junior’s survived the pandemic, Rosen hopes to be back to 100% soon with new influxes of business.
When Broadway reopened on September 14th, it was a big day for New York City. Performers lined the stage mask-free for an emotional return to the stages that characterize the Big Apple. Inside theaters, precautionary measures included upgraded air filtration systems, digital tickets, ubiquitous disinfectant, and frequent testing, and audience members had to show proof of vaccination and wear a mask throughout the show. After 18 months of closure, raising the curtains again on Broadway took a lot of time, energy, and money. But, the reopening is re-igniting surrounding local businesses, which also rely heavily on theater-goers from all around the world.
Unlike Broadway theaters, restaurants in Times Square were able to stay open during the height of the pandemic and survive on take-out orders and delivery. However, this new model was not as profitable as pre-pandemic sales, and many businesses are “still feeling the hit of Broadway being closed despite the city slowly coming back to life,” according to Zachary Schmahl, owner of Schmakary’s bakery located in Hell’s Kitchen. Schmahl estimates that about 40% of his customers are either coming from or going to the theatre and “not having Broadway open did leave us high and dry.” Schmakary’s is one of many food businesses in the Theater District that felt the direct impact of Broadway’s closure on their profits — and the overall economy of New York.
With a GDP of $1.21 trillion, New York City’s economy is the largest of any city in the United States. So, when a national crisis happens, millions of people and industries — particularly the arts and entertainment sector — are hit. As The New York Times’s Michael Paulson wrote,
“Broadway — which has been a point of pride for New Yorkers through the fiscal crisis of the 1970s, the cleanup of Times Square in the 1990s, and the recovery after the Sept. 11 attacks 20 years ago — has also come to function as a sort of barometer of the city’s health.”
Broadway shows account for a significant portion of the city’s economy, contributing $14.7 billion worth of economic impact from things like ticket sales and hotel and restaurant revenue. In 2019, upwards of 14 million people spent nearly $2 billion on tickets alone at 41 theaters. According to the Broadway League, the national trade association for the Broadway theatre industry, attendance and gross profits at all Broadway theaters peaked during the 2019 holiday season, with more than 350,000 audience members and total gross profits nearing $56 million for the week of December 23rd.
President of the Broadway League, Charlotte St. Martin, said, “Broadway is often called the beating heart of New York City, but it also provides real jobs that deliver real benefit to not just the Times Square area, but to the entire city.” When all Broadway productions were halted due to stay-at-home restrictions in New York City on March 12, 2020, 97,000 people — from ushers to producers to performers — lost their jobs. This shutdown caused a ripple effect that devastated restaurants in the surrounding area.
But not all restaurant owners are as optimistic as Rosen. President of Westway Diner Peter Dafnos told NBC News that their business was down 95% at the beginning of the pandemic. The diner is still hoping to earn back 50% of pre-pandemic profits, but Broadway’s reopening means a lot for the business. Dafnos explained the diner hasn’t added additional operating hours because he wants to wait and see how everything plays out, citing his concern about slow hours during September and the uncertainty of the COVID-19 delta variant as we near winter.
According to a report released by New York State Comptroller Thomas P. DiNapoli in September 2020, “The Chelsea/Clinton/Midtown Business District, which includes the New York City Theater District, had the highest restaurant employment among all the City’s 55 Census-defined neighborhoods (nearly one in four jobs citywide)” in 2019. From February to April of 2020, there was a 71% decrease in New York City’s restaurant employment. Although there was an uptick in jobs as restaurants opened outdoor dining, restaurant employment began to plateau after August 2021 (see graph below).
Mary Hattman, general manager of Joe Allen restaurant on West 46th Street, said they’ve “experienced a very steady increase in business since Broadway reopened” and are busier every week as more shows start. Joe Allen — which reopened on August 18th — and Broadway “are glued to the hip!” and “if Broadway has a good season, so do we.” according to Hattman.
The opposite is true as well. During COVID, Joe Allen reopened at 25% capacity in October of 2020. Hattman explained that it only lasted for seven weeks because the operation cost too much money. Because the “Joe Allen staff is a family,” most of the staff — who’ve been with them for more than 20 or 30 years — was eager to come back after “a very stressful time.” But, now that the business is still growing, they are finally reaching out to hire new staff, and it’s challenging. Hattman said it’s hard to know the causes of staff shortages at the moment, but she thinks it’s a combination of many variables. Nandita Khanna, owner and manager of the Indian restaurant Utsav, echoed this concern about the difficulty of retaining staff due to increasing competition in the area. However, with slight salary increases, Khanna confirms that “the front of the house is fine,” and she hopes to see business increase as more shows begin to open.
Liberal French economist Jean-Baptiste Say’s believed that “supply creates its own demand,” but how does this concept hold when there is no supply? Filling job positions for waiters and other restaurant staff has been difficult as it has been for many industries. According to the data from the Bureau of Labor Statistics, 722,000 restaurant and hotel workers have quit since June, leading to over 1.4 million job openings in the industry. Additionally, some of these same workers who quit are moving to higher-paid jobs in the same industries. This may be due to the fact that companies are offering sign-on bonuses and incentives like free meals and cash for interviewing.
According to the National Restaurant Association, 75% of restaurant owners said recruiting and retaining employees was their biggest challenge recently. In order to retain employees, restaurants have raised minimum wages for waiters and waitresses, which allows them to earn more than cooks. Hourly pay for workers in leisure and hospitality averaged $16.71 in September, a 13.5% increase from the $14.72 wage they earned just last year, according to the US Bureau of Labor Statistics. But an increase in wages doesn’t protect workers from the inevitable of dealing with irritable customers and long work hours, especially on the night of a show.
Unfortunately, theater-goers won’t find all of their old favorites reopening for business. Maura Consedine, who studies Public Relations and Hospitality Management at St. John’s University, said one of her favorite spots in the Theater District, City Kitchen, closed in March of 2020 and has yet to reopen. For Consedine, the city seems to be full of life and energy that is comparable to what she experienced pre-COVID since so many shows have resumed performances. She also noted that more restaurants have wait-times and the need for reservations because there’s a lot more demand.
The last 18 months have been a big reminder that Broadway and restaurants in the Theater District work in tandem with each other. In addition to the emotions felt by performers and audience-goes, most restaurant owners are grateful that Broadway finally reopened. “Joe Allen is a wonderful family to be a part of. These past two years have been trying to say the least, and now we are back together working hard side by side again with Broadway. It’s tremendous!” said Hattman. “We are all so happy to see Broadway open again. We made it through hard times, and we’re all back!”
Bibliography:
https://www.nytimes.com/2021/09/13/theater/broadway-reopening.html
https://spoonuniversity.com/lifestyle/broadway-midtown-restaurants-covid
https://newyork.cbslocal.com/2021/09/14/broadway-business-impact/
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