NEW YORK (WABC) — New York City won’t look the same after the pandemic is over.
Economists predict a younger, poorer and more eclectic crowd. There will be changes in everything from restaurant dining, to entertainment, to residential and commercial real estate.
“The new, New York City will just look a little bit different,” said Barbara Denham, a senior commercial real estate economist with Moody’s Analytics.
Hundreds of thousands of families moved out of the city in the months after the lockdown started. Many of them won’t return, but others are coming back along with new people who are looking for new opportunities.
“When the lights get turned on, they’re going to want to get back,” said Christopher Heywood of NYC & Company, the city department in charge of tourism.
Denham believes the city won’t get back to pre-pandemic levels until 2025. That sounds far away but that’s for the entire economy. Parts of the city will start getting back to normal much sooner than that.
“Hopefully by the holiday season we will see a return of tourists, a return of all the restaurants, certainly a return of Radio City Music Hall, Broadway shows, because that’s what we really need, to restore hope,” Denham said.
All the experts we spoke with agree the city won’t start to bounce back until Broadway reopens.
“Until Broadway is open, New York is not open,” said Charlotte St. Martin, the president of The Broadway League. “Broadway stands for New York to most of the world.”
St. Martin predicts Broadway shows will return by late summer or early fall. However unlike everywhere else, the seats will have to be full. There will be no social distancing. The theaters can’t afford to have fewer people in the crowd.
“Four out of five shows on Broadway don’t even recoup their investment so we must do everything we can to fill those seats,” St. Martin said. “We can’t spread those seats out; there’s no way to financially make it,” St. Martin said.
They’re working on updating the checkpoints inside the theaters to make them more touch free.
“There is so much pent-up demand to get back. We think we’ll build slowly and then get back better than ever,” St. Martin said.
Once Broadway’s back, more tourists will start to return. Up to 38 million people are expected to visit New York City by the end of the year. That’s about half the normal amount, but much higher than in 2020.
“I see the ship turning later this summer, into the fall and there’s going to be an extraordinary amount of pent-up demand,” Heywood said.
The city needs tourism to survive. All of the major landmarks and attractions aren’t enough to bring people back right away.
“Well, 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,” said Charles Nolan, the general manager of Big Bus New York.
The city’s marketing the “new” New York to people who live within driving distance first, then branching out from coast to coast as more people get vaccinated and eventually selling the city to the world once again.
“We’re going to need a lot of promotion to be able to compete with the world,” Heywood said.
A draw for those visitors are the restaurant patios now lining the streets. Many restaurant owners survived the pandemic by creating outdoor spaces that are now here to stay, giving the city a more European feel.
“New York City’s restaurant industry has been absolutely decimitated,” said Andrew Rigie, the executive director of the NYC Hospitality Alliance. “We’ve lost thousands of beloved restaurants and countless more are teetering on the edge of survival.”
He says, with the right help from local, state and federal leaders, he has optimism for the future.
“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 ’20s,” Rigie said.
Many hotels have not been able to survive. More than 140 hotels shut down in New York City since last March. Some of them will never reopen.
“There is a little light in the tunnel,” said John Fitzpatrick, the owner of two hotels in New York City.
He was forced to close one hotel temporarily last year. The other has only about 10% occupancy, which is the occupancy rate across the entire city right now.
“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,” Fitzpatrick.
He’s optimistic he’ll have enough demand to reopen his hotel this summer. And once inside the hotel, visitors will experience permanent changes. Those changes include touch-free temperature checks, slippers when you walk in the door and a plastic cover for the remote control.
“We’re just trying to think a little bit extra, a little bit different,” Fitzpatrick said.
Bringing Jobs Back
More than 900,000 people lost their jobs in New York City since last March. That’s four times the amount of jobs lost because of 9/11.
“But we did recover from 9/11 with a lot of resiliency so 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,” Denham said.
Economists say the city’s experiencing a much needed “rent reset.” So many people left that rental prices dropped by about 15% citywide. They could remain that way for the next three years.
“Some people will move out and others will happily take their place,” said economist Partha Deb of Hunter College.
“New York has priced them out and this is an opportunity to bring some of those people in,” Deb said.
Multiple economists also predict new businesses will reoccupy the empty storefronts but not with traditional retail shoppin – that was on the decline before the pandemic – but with more businesses that are centered around live experiences.
“I see a lot of potential in New York City’s retail sector for either entertainment use, health use, or dining use,” Denham said.
Commercial Real Estate
One of the last industries that is expected to recover is the commercial real estate market, with so many more people working from home.
“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,” Denham said.
She says the typical office-space lease in the city is nine years, so there’s time for businesses to figure out what to do with the space and for the market to recover.
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