Hybrid work hurting big city restaurants, bars: Study

Many restaurants and hotels in city downtowns are seeing sales come back to pre-pandemic levels — but only on Tuesdays, Wednesdays and Thursdays.

In cities such as New York, Los Angeles and Atlanta, the three-day in-person work week has posed challenges for hospitality businesses. With fewer workers in offices on Mondays and Fridays — which for some businesses were their strongest sales days — many businesses have been forced to shift work schedules or launch initiatives to pull in customers at the start and end of the week.

Amali, a restaurant on the edge of midtown Manhattan, is pulling in as little as a quarter of midweek business on Mondays and Fridays, said managing partner James Mallios.

Hotels are also seeing slower starts and ends to the week for business travelers. However, hotels throughout California have been seeing more instances of combined business and leisure travel, according to Pete Hillan, a partner at public relations firm Singer Associates, which has clients in the hospitality industry.

WFH Research, which conducts surveys and research projects on working arrangements and attitudes, released findings last week showing that remote work is costing cities billions a year. According to data collected from June to November, the per-person reduction in spending in New York City was $4,661, followed by $4,200 in Los Angeles and $4,051 in Washington, D.C. The study outlined a dozen cities with a reduction in yearly spending of over $2,000 per person.

In-person work days declined the most, 37%, in Washington, compared with pre-pandemic levels, followed by Atlanta at 34.9% and Phoenix at 34.1%. The information, finance, and professional and business services sectors lead in working from home.

According to WFH Research co-founder Jose Maria Barrero, 28.2% of employees are hybrid — working some days in the office and some days remotely — compared with 12.7% who are fully remote. Although 59.1% of workers are full-time on site, hospitality businesses catering to office workers are still struggling to make ends meet, Barrero said. WFH Research found that just 5% of paid work hours were remote pre-pandemic.

Andrew Rigie, executive director of the New York City Hospitality Alliance, said people are more likely to spend more on breakfast or lunch, or go out to happy hour after work, when they are in commercial districts, compared with the amount they spend at restaurants and bars in their own neighborhood when they work remotely.

The demand for corporate dinners and catered meals has in many cases not gone away, though.

“We have found that there is significant demand from the business community, both from a lunch standpoint but really entertaining happy hour later, to many degrees at a higher level than pre-pandemic,” said Steve Simon, partner of Atlanta-based Fifth Group Restaurants.