New York City’s economic and tourism recovery remains a cause for “celebration” for city and state authorities. But behind these figures are some less than encouraging data: more visitors continue to come to spend in restaurants, hotels and entertainment centers, but the number of employees in this hospitality sector remains low compared to the period before the pandemic crisis.
Despite the ongoing recovery of the tourism industry, there are still nearly 30,000 fewer workers in this sector that potentially employs Hispanic labor, compared to pre-2020 levels, according to a report by New York State Comptroller Thomas P. Napoli.
The recovery of jobs has been very uneven.
“Comparing 2023 to 2019, jobs in restaurants, bars, hotels and entertainment venues were still down by more than 16,500 (10%) and tourism-related retail jobs were down by 9,172 (16.8%).
From 2019 to 2022, wages for tourism-related jobs grew more slowly than other private sector wages.
“The recovery of this industry will not be complete until we see a full return of international and business travelers, and a full recovery of local jobs. Our City and State leaders must focus on keeping New York a desirable and safe destination for people and families from around the world,” Napoli recommended in his report this July.
Less profits, less staff
According to tabulations from the NYC Hospitality Alliance, before the pandemic, 44% of workers in this sector were of Hispanic origin.
Other figures from the organization, which brings together hundreds of bars and restaurants in New York, show that half of its members reported a reduction in income in 2023 compared to the same period in 2022.
Operating costs and inflation seem to be taking their toll on the industry, which by definition reduces the possibility of hiring more staff.
“Full recovery from the pandemic continues amid higher operating costs, even lower foot traffic than pre-pandemic levels, and changing food and beverage consumption trends,” detailed a survey conducted at the end of 2023, which points out that of 281 restaurant owners surveyed, 72% said they are struggling primarily with “high labor costs.”
“It costs a lot to operate”
For her part, Sandra Jaquez, president of the Hispanic Restaurant and Bar Association of New York, acknowledges that there have been incentives on the part of the city government to support nightlife and remove certain regulations that were stifling the industry. Although in the particular case of small family-run Hispanic restaurants, it is difficult to show “a complete picture” of what is happening.
There is only consensus that overwhelming inflation is taking energy away from the possibility of offering more jobs.
“There are Hispanic business owners who have been able to open other restaurants and grow over the last year. And others are still dragging debts from rent and services due to the pandemic. There is an economic reality to which we are trying to adapt and we always want to bet on growth. Unfortunately, this reality prevents us from having the same number of employees as before,” said the union leader.
Jarquez refers to the sustained increase in operating costs.
For example, the bill for basic products to prepare meals has more than doubled in some cases. Electricity bills and statutory insurance have continued to skyrocket.
So many owners have decided to cut staff and even do work themselves, doing tasks they didn’t do before, in order to sustain themselves and not continue to “charge” customers’ bills.
Hard in Lower Manhattan
In a city this big, there are obviously neighborhoods that have benefited more than others from this tourist recovery.
On the map of the Big Apple, some once-vibrant areas of Lower Manhattan have suffered a heavy toll that means corporate and executive travel is far from what it once was.
Indeed, as the state comptroller’s report rightly points out, “in both domestic and international tourism, business travel has recovered more slowly than leisure travel, due in part to the impact of remote work.”
International travelers make up about 20% of the city’s visitors, but their return has been slower.
It is concluded that changing patterns among international travelers have affected visitor spending and the City’s tax revenues.
For example, visitors from China, which in 2019 accounted for the majority of total international spending in New York City, were overtaken by the United Kingdom in 2023, accounting for $1.9 billion or 9% of international tourist spending.
In addition to a decline in the number of visitors from China, their average spending in New York City fell from $3,000 in 2019 to $2,036 in 2023. Overall spending related to international tourism is down 20.4 percent in 2023 from pre-pandemic levels.
In this scenario, Colombian bartender Jesús Fermín, 45, who has 12 years in the hospitality industry in New York, has personal experience. The migrant works in a restaurant on Ann Street in Lower Manhattan. He has been spared from several staff cuts. In reality, he does not believe that the bar-restaurant, where he has worked for more than a decade, will tolerate being open any longer.
“That place was full of foreign executives who came to training and meetings in the corporate towers. After the pandemic plague, they never reopened and we lost our clients. This is just in the afternoon, because most of the people who worked here never returned to their offices. And tourists hardly ever pass by,” he said.
“Nobody wants to work in shelter hotels”
Anyone planning a few days in New York City on a budget should forget about downtown hotels for less than $400 a night. According to experts in the field, it all has to do with the fact that exactly 121 hotels were converted into shelters for migrants. This translates into 16,000 fewer rooms on the market.
Nicole Gelinas, a researcher at the Manhattan Institute, told local media that “there is no doubt that removing a massive supply of hotel rooms from the market is driving up prices.”
By becoming shelters for migrants, the hotels bring in a steady stream of revenue and the City keeps all of its rooms full at facilities scattered across the five boroughs that would otherwise have remained nearly empty due to reduced corporate travel.
Dominican Luisa Santiago, who has worked as a waitress in a chain of hotels in Long Island City, which has become a shelter for new arrivals, says that many of the workers in these hotels “are leaving those jobs, because obviously there are no tips and there is a lot of violence.”
“Normally you would go and clean a room and it would be a normal cleaning. Now it is a disaster. Hotels think they are doing great business, but when this crisis is over, these hotels will have to tear it down and start over. Because these tenants destroy everything. Nobody wants to work in these hotels,” Luisa admitted.
Very expensive hotels
Based on averages maintained by data corporation CoStar, the average daily rate for a hotel stay in the Big Apple rose to $301.61 in 2023, up 8.5 percent from $277.92 in 2022.
During the first three months of 2024, when rates always drop, the average stay was still 6.7 percent higher than during the same period last year: $230.79 per night, compared to $216.38 in 2023.
“The higher cost of hotel rooms is due to inflation, which is a deterrent for meeting planners looking to book New York City as a destination,” reasons Vijay Dandapani, executive director of the Hotel Association,
Mayor Eric Adams also denied that the migration crisis had had a negative impact on tourism.
Good omens
The state comptroller’s office projects a record $4.9 billion rebound in sales and other tourism-related tax revenue for the city in fiscal year 2024, a 16% increase from fiscal year 2020.
This is DiNapoli’s third report on the tourism industry following the abrupt shutdown caused by the pandemic in 2020.
During this health crisis, New York lost $10.9 billion in economic activity from travel and tourism, but by 2023, it had fully recovered and was $792 million higher than in 2019.
In a report released in May, DiNapoli found that tourism-related industries in New York City were nearly in a full recovery, as visitor spending and tax revenues have surpassed pre-pandemic levels.
The safety factor
For the Sanchez family, who enjoyed an extraordinary vacation last week in New York, the news about gunshots and violence in Times Square, where they were staying, was one of the issues that made them think about caution.
“Ultimately, New York is New York, it is fascinating and always exciting. When you come here you must understand that nothing should surprise you. We have had a great time. No incidents. But we have seen garbage, bad smells and scary people here in the center. There is a perception that you have to take care of yourself. So far everything has been excellent,” said the Chilean-Nicaraguan family.
Most expensive NYC:
- 62.2 million people visited New York City last year, down about 7% from the 66.6 million who visited in 2019. Although fewer, these visitors spent more than $48 billion in 2023, up 1.3% from 2019, as prices have risen over that time, including average daily hotel room rates, which exceeded $300.