New York City economy takes another hit with Delta variant

For New York City and its trillion dollar economy, September was supposed to mark a return to normalcy, a time when Broadway theaters re...


For New York City and its trillion dollar economy, September was supposed to mark a return to normalcy, a time when Broadway theaters reopened, shops and restaurants were buzzing, and tourists and office workers once again filled in. streets.

But this long-awaited step has been turned upside down by the Delta variant of the coronavirus. One large company after another has postponed plans to return to the vertiginous towers of Manhattan. Trade shows have been canceled. Some small businesses have seen their orders evaporate.

It’s a setback for a city that is lagging behind the rest of the country in its economic recovery, with an unemployment rate of 10.5% which is almost double the national average. Now, rather than seeing the fuller rebound it was counting on, New York is facing new challenges.

“The Delta variant is a significant threat to the city’s takeover,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s not going to be easy. It will be a long time before New York City regains its economic rhythm. “

Covid-19 cases have risen sharply in the city since early July, reaching the highest level since April. Hospitalizations did not increase as sharply and the death rate remained low. The situation is worrying enough, however, that the city has started to require customers and employees of bars, restaurants, gyms and indoor entertainment venues to show off. proof of vaccination – an unforeseen development when the summer started.

There are signs of hope, or at least determination. Broadway shows, a major tourist attraction, are on track for a September reopening, as is face-to-face teaching at schools across the city, which will allow some caregivers to return to the health care market. job. But even though the city sponsored an official reunion week, crowned by a concert on Saturdays in Central Park it was cut short by lightning, cancellations of trade fairs and other major events have multiplied.

The recovery could be painfully slow. James Parrott, an economist at the Center for New York City Affairs at the New School, expects the city to create 20,000 to 30,000 jobs per month in the fall, instead of 40,000 to 50,000, because of Delta.

Overall employment remains below more than half a million jobs compared to before the pandemic, with significant losses persisting in the leisure and hospitality industries and other areas blue collar workers. Part of getting those service jobs back depends on the return of white-collar workers who have worked remotely – and even left town.

Many companies aimed to get employees back to the office soon after Labor Day, at least part-time. But those plans were scrapped. Facebook, which employs 4,000 people in New York, postponed a return to january, while the financial giants BlackRock and Wells Fargo are now planning a return in October.

“Data, not dates, is what drives our approach to getting back to the office,” Facebook said in a statement. “We continue to monitor the situation and work with experts to ensure that our return-to-office plans prioritize everyone’s safety.”

Boston Properties, which owns nearly 12 million square feet of space in the New York City area, said about 40% of pre-pandemic occupants had returned to its buildings earlier in the summer, based on sweeps of badges in the lobby. By August, amid Delta’s boom and vacation getaways, that number had fallen to about 30 percent, said Owen Thomas, the company’s chief executive.

“I think returning to the office is a ‘when’ question, not a ‘if’ question,” he said. “The delta affects the when.”

There are still “if” questions. As remote work lasts for up to a second year and much of the contact between professionals and clients continues to be online, it is less clear whether some suburban workers will ever return to town and city. their sometimes painful journeys.

Greenberg Traurig, a global law firm, planned to move into four floors of a new building near Grand Central Terminal in October. But many Greenberg attorneys and investor clients moved to Long Island during the pandemic, prompting the firm to downsize its offices in Midtown to three floors. It plans to open two new offices on Long Island, including one in Bridgehampton.

“For me, it’s a no-brainer,” said Richard Rosenbaum, executive chairman. “We accept that this is probably a permanent change in the way people work.”

At the same time, company meetings are again under threat. Moody’s economist Mr Zandi had two in-person speaking engagements scheduled for September and October, but they were recently turned into remote events.

“People are nervous about the variant,” he said. “At the very least, it hinders New York’s recovery, and if cases continue to rise, it will delay the recovery. “

The intermittent situation of large corporations, as well as events such as weddings and parties, has been destabilizing for the businesses that depend on them.

Patrick Hall, co-owner of Elan Flowers in Manhattan’s SoHo neighborhood, had to deal with a wave of change as customers grew fearful of the virus.

Brides-to-be halve their guest lists and change locations at the last minute. A client, who has yet to pay a deposit, emailed Mr Hall about a nonprofit’s gala in October for 300 people and recently shut up.

Some large companies had asked Mr. Hall to prepare flowers for the back-to-office parties in the fall, but Mr. Hall wonders if he can bank on those. He had planned to increase his staff by seven people to handle an increase in business in September, but he does not yet know how many employees to hire.

“I’m trying to hang on and not lose it,” Mr. Hall said. “I need these bigger events in September for my business to survive. “

New York’s huge travel and entertainment industry is also experiencing a patchy recovery.

More than any other American city, New York relies on international tourists. Thus, the decision of the Biden administration at the end of July to continue prohibit entry to visitors from Europe and several other parts of the world has been a blow.

“This only reinforces the fact that the recovery will not come in a straight line,” said Fred Dixon, general manager of NYC & Company, the city’s tourism promotion agency.

After canceling most of the foreign tourism in August, when New York City is usually teeming with European vacationers, tourism industry officials fear the Delta variant may also keep visitors away during the crucial holiday season.

Domestic travelers have returned to New York in increasing numbers, Mr Dixon said – pedestrian traffic in Times Square has exceeded 200,000 per day, more than in May and June – but they don’t stay as long or not spend as much as foreign tourists.

At Loews Regency, a Park Avenue hotel known as a gathering place for local energy brokers and tourists, the occupancy rate was around 75%, according to Jonathan M. Tisch, general manager of Loews Hotels. But reaching full occupancy levels of late 2019 and early 2020, he said, would require a return from business travelers and especially international tourists.

“If you could tell me the impact of the Delta variant, I could tell you the occupancy rate for the rest of the year,” Mr. Tisch said. “She’s a big unknown.

The Javits Convention Center was preparing to host its first trade show in over a year when organizers of the New York International Auto Show announced in early August that they were canceling their 10-day event there. A week later, the Specialty Food Association announced that its annual Fancy Food Show, scheduled for late September in Javits, would not take place.

“Given the current significant national boom in Covid-19 cases due to the Delta variant, we believe it will be nearly impossible to organize a large indoor event and protect the general safety of all participants in the show, “said the organizers of the food show.

New York’s largest hotel, the 2,000-room Hilton in Midtown, began taking reservations with a plan to reopen in August. But hotel managers canceled those reservations and tentatively reset the reopening for September 1.

Yet some companies have worked hard. Genting Group, a Malaysian casino operator, opened a 400-room Hyatt Regency hotel in its Resorts World gaming lounge in early August near Kennedy International Airport.

After spending $ 400 million and three years to build the hotel, the company didn’t want to wait any longer to open it, said Bob DeSalvio, president of Genting Americas East.

“We understand that it will take some time for the trip to fully resume,” he said, so the hotel was 50% occupied. But there was clearly pent-up demand, as the hotel’s first weekend was full, Mr DeSalvio said.

Caroline Hirsch, the owner of Carolines on Broadway, hasn’t canceled any shows at her comedy club and is moving forward with the New York Comedy Festival, which is set to debut on November 8 and feature more than 100 shows across the city.

But this month, she noticed for the first time since it reopened in May that some people who bought tickets for the club had not turned up.

“We got off to a good start,” Ms. Hirsch said. “We thought we were going to get past this bump. Now there is another bump. We are all in the air again.

Mrs Hirsch hopes that the new city decree requiring proof of at least one vaccination to enter many covered establishments will make members of the public more comfortable. The mandate went into effect on Tuesday, and on September 13, the city will begin imposing fines on businesses that don’t comply.

Other business owners are less optimistic about the mandate; he produced at least one legal challenge. And as September approaches, the prospect of the status quo, which seemed incredibly close a few months ago, is proving elusive.

At Shambhala Yoga & Dance Center in Prospect Heights, Brooklyn, a wave of students signed up after in-person classes resumed in late April, as vaccination efforts were in full swing. But in recent days, attendance has fluctuated with news of the Delta variant outbreak, said Deanna Green, owner of Shambhala.

“Once we saw the uncertainty around the vaccines and the Delta variant, I noticed a slight lull,” Ms. Green said. Some yoga classes that typically had 10 students fell to six or seven last week, she said.

“We really depend on a constant flow of people coming through the doors,” she said. “I wish there was more certainty. “

Eduardo Porter contributed reports.

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Newsrust - US Top News: New York City economy takes another hit with Delta variant
New York City economy takes another hit with Delta variant
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