S2:EP3 - An Update on Restaurants in NY with Andrew Rigie
S2:EP3 - An Update on Restaurants in NY with Andrew Rigie
In this podcast, I interview Andrew Rigie who is the Executive Director of the New York City Hospitality Alliance, an association representing over 2,000 restaurants and nightlife venues throughout the five boroughs of NY.
In this podcast eye interview Andrew Ritchie who is the executive director of the New York City Hospitality Alliance and Association representing over 2,000 restaurants nightlife venues throughout the five boroughs of New York and was born into the hospitality business working 3rd Generation Bakery in Queens, New York easy vocal industry public speaker frequent panelist in moderator host of the hospitality and politics podcast for was in total Food Service news contributing author and recognized commentator on local national International media platforms were about to go deep as to what exactly is going on in the New York Hospitality seen and get the inside scoop as to what policymakers have been thinking about when it comes to hospitality given out World situation with everything and then also what's next and so without further Ado. Let's Dive Right In
Hi, my name is Brett Linkletter CEO and founder of Misfit media best damn restaurant marketing agency on the planet here at Misfit. We help restaurant owners growing scale their business through to teach account online marketing practices right now, you're the Star podcast restaurant Misfits will discuss all things related to restaurant marketing management and everything else in between growing a restaurant Biz. This podcast has also brought to you in collaboration with total food service for over 30 years pull through Services provided the restaurant and Foodservice industry with exclusive interviews. The latest news on products Trends associations and events. You can sign up for a free monthly subscription by visiting total food.com today and from all the Misfits over here. We hope you enjoy the show.
Andrew how you doing? I am hanging in there. What about yourself? We're doing well or doing well. Thank you so much for agreeing to be on a shower. So excited to have you happy to join you. Absolutely absolutely no Andrews kind of diving into it. I mean, I know you are the executive director of the New York City Hospitality Alliance. I was just fantastic sounds awesome. And you represent over 2,000 restaurants bars and clubs in the New York area, right? That is correct. Okay, awesome. Awesome. And that's that's that's that's amazing you doing I damn sure. There's just been so much happening in such a crazy every pad obviously, but just tell me you know, how what are your thoughts on the New York is recovering in the hospital in space during this crazy. How's it been?
Yeah, well, it's the dire situation, you know pre pandemic there more than 25,000 eating and drinking establishments throughout the five boroughs of New York City. They employed more than 300,000 people while we don't know how many thousands have yet closed or likely will close we do not still know that there's about 150,000 New Yorkers that worked in these businesses pre pandemic they're still out of work. So it's a dire situation. It's been 6 Plus months on September 30th, New York City restaurant opened up for the first time indoors and only a 25% occupancy the rest of the state and comparison had been open up since June at 50% and while in most of New York City or infection rate continues to go down, I mean 1% were under there were what we are calling 3 Xbox we're receiving section rates rise not related to restaurants or bars.
Related to other types of activity which is now shut down businesses or limited their operations in those neighborhoods further and there's no end in sight. So, you know, why was my job to be optimistic and fight for the industry, you know, we have a long road to recovery. There's going to be a lot of loss. I have no doubt that one day collectively the industry will recover but it's ice. Unfortunately. We're going to see a lot of loss of a loved business has lost a job and I think long-term it's going to while I should say and a short medium and long-term. It's going to reconfigure the industry in many ways and it's tough no doubt, but we're fighting industry. So we're keeping fight and fight and fight and trucking along absolutely. Of course, you are fighting for the industry which which is fantastic and I will and I love what you guys are doing to me. It's it's awesome. But can you give us a little background specifics behind what you guys do with the alliance?
Sure. So the New York City Hospitality line is a 501 C 6 not-for-profit trade Association that represents the restaurant nightlife industry. So think of us as a Restaurant Association Works your chamber of commerce, but focused specifically on restaurants and nightlife in the five boroughs where as many of the Restaurant Association Interstate Association. So we're an independent organization. We do a lot of advocacy at all levels of government making sure our voices heard when it comes to permitting licensing all the other regulatory issues that we do a lot of Education and Training trainings are related to the regulatory atmosphere. So if it's labor law compliance food safety compliance to do things about technology. So our conference is about how technology is changing the hospitality industry. We do a lot of I called General consulting or Hospitality helpline or members call.
Questions about those different Regulatory and training issues. I just mentioned but really anything I joke around sometimes and say and I guess it's not much of a joke. That's my real job or like a fixer for them trying to help them navigate their way through he's really trying times. I know we do fun things to do in this is pre pandemic but we do different cocktail party different events to try to bring the industry together. You know, everyone is so busy working nights weekends holidays a 24/7 so we will create environments and atmosphere where we come together and get to know each other chat have a little bit of fun and really unite the industry in Orange. Vitality of our industry in 214 switch is the New York City hospitality, and we just celebrated our 8th anniversary and I mean time flies. Wow, got it. Got it.
We have restaurants, you know that we service in three different countries and I'll tell you for a restaurant specifically New York. It seems like things are just starting to really get a lot better. I'm it seems like people are starting to get excited again about the real openings and in all this kind of stuff is it how how are things looking at the last month or so it has a diagnosis Amy many how you said that you're having a restaurant therapist. What's been the overall morale over the last few months are people feeling right now? Well, it's all across the board. I mean there is a lot of Doom and Gloom. So now we have to keep it in perspective the situation that were in you know, we were big Advocate or outdoor dining near New York City and we helped architect that program what's really in provided a Lifeline thousand thousands of restaurant imagine the city streets caped. I think I brought a lot of Vitality and energy back to New York City, which is so critically important because
Or that I mean it was like a ghost town people at Last we are in lockdown and doors are streets are businesses were closed in the streets were dark. So I think the outdoor dining at least brought a little optimism back to people and a lot of optimism back to other people because it gave the impression. They're authentic impression. I believe that New York City was on its way back to recovery and there's this old words than Churchill quote that says, you know, don't let a good crisis go to waste I think with the outdoor dining at helped us take this crisis and bring something good to our city so much so that now there's a huge movement both our mayor de Blasio on her city council and so many Civic leaders and just everyday New Yorkers have been saying let's make the outdoor dining.
Permanent and there's a movement to do that now that which were involved in not just because it helps a small businesses and brings back jobs, which it does in a big way but also because of creating more livable City beautiful eyes are streets and there's so much to contribute to the environment of New York City. So it's been great in that 25,000 eating and drinking establishment about 10400 of them are participating in outdoor dining which is incredible number but still that's about 40 some-odd percent of the 25000. So there's so many restaurants that have been unable for various reasons to participate in outdoor dining 25% indoor died which has helped some others, but you know, 25% indoor dining is not going to hell. We're hoping to get by November 1st to 50% indoor dining and we'll see what happens.
Particularly with you spike in cases in a couple of these neighborhood. I think 50% no way to sustain a restaurant long-term truth being free pandemic and restaurant at 100% in your occupancy. It was difficult enough for many of them to survive. So we're really navigating our way through this. We need the city of New York, which they're in the process of doing unfortunate been taking a while to authorize different types of heat lamps to as the weather starts to drop here, which is already people can sit outdoors more comfortably but there's a huge concern going into the fall which were in and then heading into the winter, which we're going to be in soon that more more people will not be comfortable eating Outdoors. So indoors will be their only option. So we really need to get to 50% indoor occupancy safely and hopefully continue to be old and preset to let these business owners be more optimistic.
Or see a future in which they can potentially survive and we're kind of all over the place right now when we look at what's happening with the federal government and so far the lack of them passing the restaurant act which is a bipartisan piece of legislation that would create a 120 billion dollar Grant fund help restaurants pay their back rent their vendors their payroll and all these other expenses. They're going to need to survive and there's also a similar bill that was passed in the house called the save our seas act which would help more music and nightlife venues. So, you know, I don't want to see anyone's optimistic, but you know, we're Fighters. It's in our DNA and we're going to keep fighting so it's really a mixed bag, but it's a tough time, but we're fighting got it.
That were in Los Angeles and I'll tell you in a lie. If it's been also really amazing to see right. I mean, it's obviously we're not going to we're not going to deal with the same issues as New York as is the weather is going to start getting a lot colder or just so I know it's on everyone's mind in York, which is obviously a huge issue. Of course riding me to man. It's about to get really cold. So yeah, there's some concerns. I'm sure but I'll work on the legal side of all this kind of stuff in your ear kind of like a zombie and those and put the Power. It seems like kind of like your kind of voice of reason kind of back-and-forth visible ones that you know, get get stuff done because I always say, you know, the hospitality industry is vital to the economic footprint of cities in our nation, but really the social landscape in the socialization of cities. So what I asked about New York, there is no way New York City and recover unless the city's Rush.
Toronto nightlife and cultural Industries are the core that recovery and we again like you said, we're going to try to bridge the gap between the policymakers and the business owners.
Got it. Got it. And so all I know I mean it it sounds like I would see how you are a fighter for the restaurant industry which is which is amazing. Right? I mean, I love it Industries while I think it's the coolest industry in the plane. I think it's so funny. Like you said, it's it's a social history of it brings people together and I think young people are craving that social connections, you know this year more than ever right with the quarantine. It's been tough right lot of people stuck inside not seen other people people are sides. Go back out see their friends and family reconnect with people out restaurants and I'll be seeing you mentioned that with in New York City specifically and I dab Rose at 25% capacity 50% outside. Do you think I mean, I mean, I know you been working on the covid-19 committee with Andrew Cuomo and Bill de Blasio. What are you thinking Justified to still be at 25% I mean what what are your thoughts on everything? I'm a lot of restaurants were very upset about this. Right? I mean you think it's Justified you think it's going to open up and what what are your thoughts?
New York City at 50% indoor occupancy like the rest of the state has since back in June and as I said earlier, you know as they've been open up since June we continued to see the infection rate go down down down. So that's a good thing. I think it speaks to the success of the safety protocols that are required of restaurants to be operating in door. So I definitely think we could have done 50% I think public health and safety, of course have to be Paramount that include for those of you know, all the employees working in these businesses, but look, you know, 25% is a very difficult number and especially there so many really small restaurants in the city that 25% pure like, you know, what particular if they didn't have any outdoor seating I can open up at this. It just doesn't make Financial sense. There's no even to get started. So I think we do need to get to that 50% very soon but even though
The industry that's why we need the restaurants that we need to save our stage is out, you know restaurants that were shut that they were not shut down because you didn't like their burger. You didn't like their bowl of pasta you thought they had bad service they were shut down by government. So now we need that same government to enact policies. So the sack types of businesses that he shut down.
Can you reopen and went as they do re open stand a chance of survival? We've got along with the shutdown. We've done everything possible to help service our communities. I mean when we first went to shut down many restaurant stayed open to do delivery and takeout not because they were making money. They're actually losing money, but they knew New Yorkers had to eat so we can get food to them. We help serve and feed the front-line workers. We held yesterday hungry New Yorkers in our community and the workers that cooked in our kitchen is delivered or food. They are also quiroz and we really need government to step up get politics out of the way and enact policies to help these businesses that served our communities and they're not doing enough. We've been asking some policies here in New York that have been helpful, but there's a lot more to do.
Got it. Got it. So yeah, I mean, of course obviously getting aid from the government help pay for a lobbyist would be extremely helpful. I'm sure seems like a lot of restaurants. I mean a lot of businesses in general. I mean from what we've seen a boy we've heard from her clients. Is it a lot of smaller restaurant Concepts specifically have blamed the government in and while I guess those
Woodbury very large corporations, let's say in a corporation with two billion dollar market caps. They've been receiving some p p p money. I mean, I just I'm trying to understand how that all happened. I mean, how do you think it's off? I mean like literally restaurants with 2 billion dollar Mark and caps are receiving a p p p money. I mean, what are your thoughts on that? I mean we've seen it tons of times even criminals. Would you agree or what's your thoughts on that? I think this pandemic it and it was an unprecedented situation and there is a scramble to do something. I think like we've seen over and over again throughout the years the largest corporations and often the wealthiest Among Us get access and get benefits at the expense of those who don't have the same types of money or same types of access or same types of resources.
And it's shameful in many ways. But at the end of the day this has impacted our industry and our country and every segment in so many different ways and the PPP while it may work for some companies. It wasn't designed for the restaurant industry. I mean we are as I said and we just spoke about has been shut down for 6 Plus months and who knows when we're going to get to 100% capacity to give alone like the PPP that is only forgivable and converted into a grant based on hiring employees back to free pandemic levels makes absolutely no set one. Who knows when we're going to be able to hire all of our employees back to pre pandemic and or if we will ever need them because our businesses have been changed and we predicted our style of operation in many ways and who knows if we're going to have the customer base for a long time to
How did the man to hire all those employees back that's 1/2 in the restaurant industry, you know, if you're a cook you need to be in the kitchen cooking food. If you're a bartender or server you need to be on premise. So we're not going to hire people back to do that types of service. If there are people eating inside the restaurant versus other types of Industries, including the work that I do we can work remotely and what was frustrating was we've been hit so hard as an organization as I know many other Chambers of Commerce and Business Association sad because we were actually exempt from the PPP loans. So there are a lot of things about that did not make any sense at all. And that's why I said things like the restaurants make a lot more sense for our types of Industry. So yeah, it was frustrating that these huge corporations were first in line to get all this money when in so many cases they probably didn't need
So many other businesses didn't get it or they got money and it was basically exhausted already or they weren't able to necessarily using your way that converted into a grant so when I said since just become more debt for them, so it's frustrating on so many levels. We need a more thoughtful approach to policy and law making it really takes into account the experience of the people on the ground and I get it, you know, you put these things together fast to try to stand them up. There's going to be some mistakes made but you also need to be nimble enough to Pivot and we work with our Senator Chuck Schumer and other is your New York to get some important changes made to the PPP which allowed more money to go to rent and it still be converted to a grad. We extended the. For forgiveness, which is really important for industry is like the restaurant industry so much more still needs to be done and needs to be done.
With a better understanding of where we are in this pandemic six months later to this specific needs of different Industries. And there's really no excuse to do it other than this horrible politics is happening and national-level. Absolutely. I mean it is but you got through so wild about us, I mean our typical time we work with his is let's just say to 220 locations. Okay, so, you know that they're the SMB restaurants. I mean many many of them would say that this is fraud because some of these buildings are restaurant company and see how they they're taking the PPP and their does applying hundreds of times, you know, because there are 30 ft apply with 500 employees or less. Right? So, you know, they look at what's happened and they say I can't trust the government to make the decisions because they're just getting on money but the wrong people are getting the money and then what they're saying as well is Witchwood. So mess-up about it is then now these restaurant opening committees are are mainly, you know, Basie stacked with these same people who
You know and some people would say I've been committing fraud to get that PPP money and now they're in charge of the opening committees. I mean it is is there some truth to that or what are your thoughts on that again? Listen, I mean we've seen that often people that make the decisions don't have experience in the industries that they are either regulating War supporting or both and people with access to them off and get these policies written in a way that benefit them the most and you can also benefit them at the expense of others and it should be problematic. I think it's one of the reasons you see so much frustration. You can feel it the divisiveness and hatred that's grown in our nation on all sides instead of people coming together speaking honestly about these issues and passing policies that are going to help everyone and listen, I think.
Most thoughtful people if they said okay, here's a bigger Corporation, but they have a legit needs. So we don't lose them they'd understand it but they lose confidence in their lawmakers because they too often over the years have continued to see policies made the benefits of people the very very top at their expense and that feed all this frustration and then when they need support the most like they do right now after they've been suffering after they've been going out on a whim supporting others. Like I mentioned restaurants feeding Frontline workers feeding the hungry, but they can't see our federal elected officials come together to pass something to support them because they're so partisan. It just drives a partisan divide even further angers people even further and then at the end of the day you have people the very top or able to use sophisticated methods to
Extract benefits for themselves while other people cannot do that. It's a huge problem in government. It's pulling us apart. And we need people that are going to come together not just using words to say. Oh, oh, we love our small businesses. We need to preserve our mom and pop shop. We must all be United. You know, where is it? There's more that we have in common is Americans than what divides us and at some point don't mean anything. Don't talk about it be about it. And if you can show people action that supports them then they will start believing those words, but they ring Halo and they often or fueled by not only being hollow, but then seeing people past policies to do the exact opposite of what they're saying supporting the biggest that often may not need the support. Yeah. I mean it
So that's the thing. I know you mentioned like hey, when will we know when we're going to be open again? You know, what a lot of still questions about when that's going to happen. I know back in March the governor and mayor of New York mention that area with New York, New Jersey Connecticut, you know that they mention that they all want to open and close together as a people don't just drive over bridge and then also have different rules why no New Jersey was at 25% Connecticut went to I think what 75% and it specifically the outer boroughs in New York or 50% and then 25% You said like in Manhattan area, right? I think it's 25 for all five boroughs. It was only 25. We were New York City 5 boroughs were basically different than the states of the rest of New York state has been opened at 50% since June but New York City was closed until September 30th when we then got 25% and had additional.
Yeah, you know how to disarm these numbers are for people. They're like, okay, you know the government Aid, you know that there's issues with that. So if we can't rely on the government then just let us open up. I mean, you know, how are they coming up these numbers right where it where is I mean from what you've been speaking with those and put her about what are they saying about the reasonings behind some of these numbers and their reasons why they may be would choose to stick here or when do we decide to open up? When when do we know? How are these decisions being made?
What I can say and out and get you direct dance, right? I think but
No matter what you do. This is an impossible situation. So is policymaker no matter what kind of decisions they make their True Blood are going to be angry. There's people that are going to be frustrated. They're not going to agree some will agree and that's just Mac.
The frustration comes in when people start thinking the decisions are being made arbitrarily and that there isn't science behind them or that they are somehow not being heard where there are issues seem to be on the back burner while other people's or being addressed and I think here in lies the problem is that six months into it as you start seeing all of these different sectors of the economy open up and down again, why is this happening and not that happen and when they can't make sense of things that's when things start to get off the tracks a little bit. So in New York City, there's tons of frustration saying we in New York City have just as low and in some cases and even lower infection rate then the rest of the state and they've been open in doors 4 months. Why are we open and
You can justify it perhaps to some people for a certain amount of time, but when people's livelihoods are on the line and they're taking on all this death and you know, they don't know what to tell their employees when they're going to be opening up. Do you start getting this frustration that boils over? So I think we need our policymakers and I understand they have a limited bandwidth, you know, when they're dealing with so many impossible situation, but you have to be as transparent as possible. You have to speak honestly and then the policies you and you and neck have to reflect that so
What happened in New York City? And you saw lawsuits filed? Why couldn't we open up indoors in New York City? And I think you're seeing that not only around the rest of the country. But you seen that around the globe where certain sector don't understand why they're being treated differently than other sectors when there are similar Health metrics similar operational realities between their industry and another industry that are open up. So it's a tough situation no doubt, but I think our policymakers have to understand that it is that
It is the arbitrary policy decisions of people can't make sense of that really frustrate people people can be angry and they cannot be happy with the situation. But when they start feeling like things are arbitrary or their voice isn't being heard. That's when the anger and frustration really starts to boil over. I know they're what their do, you know and who knows with all this stuff. We know what happened with all these suits but really what I heard from so many people like, you know, they couldn't seem to understand or Justified why they were being treated different than business has a hundred yards across the street because they were just in a different geographic area when the health metrics are the same the operational aspects of the same and that's what happened. So we really need to make sure that people are being treated fairly and if you were treating people differently or treating Industries,
Only then it can be justified by science can be justified by the operational aspects of an industry and at the end of the day, it's Focus also on public health and rest. You also need to be able to support people, you know, people are losing their livelihoods. They're exhausting their personal savings their operating in extremely difficult situation. So if you're telling them that they can't do something like run their business, but then you're not providing them the appropriate support to not run their business, but have the resources to eventually reopen
Andre and your opinion, I mean you do have an interesting position cuz it again you're representing the hospitality space but those and these policymakers right if it was your choice right now, I mean, how would it be if you were the one calling the shots? How how would you go about, you know solving these problems finishing moving forward from this what would be kind of your plan? Well, I would you know allow restaurants at a 50% occupancy very soon in New York City, but at the end of the day of a pandemic is Unser your are you going to see if spikes infection cases?
All these things are going to influence policy long-term. So I try to figure out what kind of certainty can we give small-business owners in an uncertain situation at the end of the day a lot of that is going to come from the federal government because people need money and city government and state government print money and cannot pass these big types of policies. So we need the federal government as I said to pass the restaurant Sac to pass save our stages act that is going to be critically important because those are the big picture policies that can sustain people during these uncertain parrot that I look more locally City level. What can we do to forgive past rent? What can we do to reduce taxes to reduce fees? What can we do to reimagine and we Jigger the end.
History, so as we do start coming back, there's less bureaucracy. There's less red tape. We have a more supportive environment between the regulators and the regulator Community like restaurants and nightlife because one day restaurants and nightlife will come back. So how do we use this as an opportunity to rebuild a stronger Fair more resilient industry as a relates to local government being tired of being State the deal with the nitty-gritty of operating day today Health Department inspections. For example, how do we ensure that all types of non imminent public hazards instead of just issuing a violation if something is a minor technical violation that doesn't pose an immediate risk inspector should come in and say, you know, you don't miss chef.
This is a violation. This is why it's a violation. This is how you correct the violation and given opportunity to fix it for just issuing a fine or some sort of penalty by tapes of people do want to open up a new restaurant or bar in the future. We do everything to get this bureaucracy out of the way so they could open instead of just creating hurdles two people opening new businesses. So, you know, I think we need to look to all types of rice at all levels of government for different types of support. But then we also need to think about how do we rebuild our industry as a relates to government in a more sustainable and Better Way. Absolutely. I mean, do you think the approach to reopening a how how scientifically are those and purple Power looking at all this stuff? I mean it if you think it's do you think they've made some mistakes you think they made the right decisions and and now I mean, I know you said that you won't open if it
If it was your way, right and it was your choice, but I mean how how scientific is all this stuff. And what kind of numbers are we seeing? And you know, how do we move forward from that?
Well, I think it first you know, yes, of course there were mistakes in any situation. Like there's there's going to be mistakes and that's natural. I tend to look at if a mistake is made how quickly do you pivot to correct that you know, that is what we need to understand. You know, if you're a business owner, right if your restaurant owner and you put something that a menu item list of the Cheese's you you put a new dish on the menu and it's not sending you no has a low mortgage and it's expensive for you to keep on the menu and it's not selling well and you keep it on the menu. That's a bad business move. You know, it's going to cost your business. The customers don't like it. It's not a great way to run your restaurant. But if you try something out of you put it on the menu and you realize it's not selling well or there's an issue with it you modify it or you just take it out the off the menu.
And we need government act the same way. You try different things out in an authentic way that you think will have the best outcome and then you have to acknowledge if it's not working and pivot to fix it. So, you know, I think policymakers could learn from restaurant owners in that sense how New York opened our economy. I think in many ways made a lot of sense there were different phases of reopening you had to meet several different Benchmark sustain those Benchmark for 14 days before you can enter a new phase where specters of the economy were able to open those sectors were based on risk the type of behavior based on the best sign to the time and I think it worked and I work by the New York data. We had a horrible situation. I mean, it would happen in New York state was so tragic the loss in the sickness, but we've really
Call Claude our way back. Now. We have Hmong the lowest infection rates anywhere in the country. So I think it worked but as it worked, I think we got a little bit off the rails, which I spoke to earlier how restaurants in New York City were supposed to open up back in July in New York City because restaurant and the Restless date of been open since June, we had start starting to see some infection rates increase around the state. So I think they put it on hold out of reasonable caution many in the restaurant industry said, okay, let's agree. Let's hold it for a week or two. Let's see what happens for the next couple weeks around the country. Make sure in New York City or infection rate doesn't increase but then July went by then August went by and then we're in September and said we're still not opening doors and people couldn't make sense of it. So, yeah, I think that that's where some of the
Frustration started to grow but were open to 25% indoors again. There were some increased cases around the city instead of just closing on the whole city. There was a plan put in place to really close down places in specific areas that song the increase people are frustrated. I got some more people going to be frustrating no matter what you do, but I do think it was a more surgical approach that we need to save instead of just city wide shut down if we can contain something in a specific geographic area. So I think that was good. I think it's science based approach, but we need to continue to modify. We need to continue to monitor monitor and make sure that we're not just doing things.
Out of fear and ensure that it is signs driven. It is data-driven and it is reasonable got it. Got it. Okay, that's good to hear. I mean, it's it's I think I agree with you. Right we've all made mistakes this year, but I think it's it's recognizing and acknowledging when we make mistakes. So I hate that was a mistake, you know, but here's how we're going to fix it. I think that's what people are craving and watching right and I'm sure it supposed to be in New York right space without a spacesuit of course right for a long time and thousands of people in this industry. What do you currently see as as some of the problems right now generally speaking in the food space of course being hit by car.
Well, there was you know, I think I said it before that, you know pre pandemic when you had 100% occupancy. It was so difficult to survive. I think the cost to run a restaurant has become cost-prohibitive for so many and weird seeing this is nothing new all the vacant storefronts in New York City, you know the rent continue to go up go up go up and even though they had started to come down in the commercial real estate industry in New York City had been softening for a little bit better. Sorry. I let a little. Of time it's still hadn't softened to that your astronomical skyrocketing rental market. So rent for still too high, I think the city and state bureaucracy when it came to permitting and Licensing was hugely problematic so we could have cut more of the red tape. I think the laws needed to be reformed.
Particularly when they come to labor and other issues because of a minor violation of a technical labor law for example could result in a major liability, even when there weren't huge damages. So it was just a very difficult atmosphere pre pandemic the competition. There are so many restaurants mean 25,000 restaurants competing against each other so that we had seen kind of the growth of the restaurant group where you see more chains coming into the city. They make it tougher for the everyday individual single unit or have operators only two or three restaurant, you know to compete with those types of dinosaurs from industry Trends to regulations to just General market pressures making it really tough wear.
It wasn't good enough to be just a good cook or hospitable hosts yet to be a real through and through business person and even then it was so difficult to survive absolutely summer class at Mission that you know, covid-19 been just the ultimate gut-check to say, you know, do you really love this business? Do you really love this industry how badly do you want it? Right and I think you know when it's all said and done obviously a lot of restaurants are close to me Yelp has mentioned that 44% restaurants are just not coming back, you know, if it is something I mean, would you agree that mean it has Kobe been just the ultimate got check for this industry.
Yeah, I think so in so many different ways. You know, this is a industry where you work nights weekends holidays. There's very thin profit margins. There's always a million fires you're putting out so it's not for someone to just go into because they think they're going to serve their friends and they're going to throw a fun party. As you know, you are really need to have this industry in your DNA if you want to survive, so I think they're going to be people that are going to say, you know what I'm just definitely not getting back into a right now. I think there's other people that said, you know, I'm just going to get out of the industry now, for example, I spoke with multiple people that had well-known restaurants in have been around for many years. They really want to make it through this but they said, you know what my lease is coming up for Renewal soon. Like I'm just going to take this as a sign that I'm just getting out now. I think there's other people that maybe were thinking about going
The industry clear now reassessing and I think there's a lot of people who are in The Mists of their hospitality industry career that as difficult as a situation as it is Macy future opportunity in the industry and I hope they're taking whatever lessons they can learn by disco bed prices and applying it to how they're going to operate their restaurants in the future. You know, there's always going to be those kind of Essentials. You need to have a good food. You want to have a hospitable and Professional Service, but there may be other ways in which you can learn from this crisis how to operate your business. So it is more resilient. So it does stand a better chance of survival long-term. Absolutely the fittest right now, right because it just seems like right now that they're there so much distrust currently.
Rainbow state and federal governments. It's like, you know that we can put our trust on them. So we got to do this ourselves. And so those who are coming out of this, you know, they're saying I'm right. I have some clients who will not say this publicly but their sales are up 50%. 50% during this time because they found a way to make Take out delivery work and if you can make that work and you can scale that will guess what, you know, you're not being rely on tables at your restaurant now, but you can serve as many people as possible if you can figure it out. So yeah, I know you mentioned earlier don't let a crisis go to waste right quote from amazing amazing quote and I totally agree right? It's one of those things where you know, there's yeah we can talk about all the negativity but what about the opportunities? You know, what can we learn from this and I'm not no, I mean, what would have you learned? What have you seen other restaurants are in what what opportunities do you see in the industry right now?
Well, I think we need to look at how we are running our business. I think we need to understand that something is always known frankly is that there are certain Mart. I think we need to generate revenue from his money different streams as possible sites. For example something that was really interesting when restaurants first shut down money for Kecoughtan delivery to help feed me local homeless shelters, you help feed the local, you know for front-line workers in the different hospital and I saw that many of the restaurants that had local relationships with food banks with hospitals and with other types of community organizations that were able to receive some funding early on to help feed people locally or able to actually get some money coming to their business and then they were able to feed these communities. So what they were doing out of
Wheel of dare good hard actually proved.
To help them in this time of Crisis, you know, they had these philanthropic relationship. They had these local community-based relationships with organizations in other entities that actually relied on them early on in the crisis and I thought it was really interesting because while everyone else was my delivery business people at work working with the local hospitals are working with a local food banks in may have gotten some Grand Tour. Government money to buy food to help feed those people, but I thought that was something that hit at the essence of the industry be community-minded establish relationships with Community organizations and others to make sure that if there is another crisis you're there not only service your community but by service in your community, they may be able to help you by sending business your way. I think that's important.
I think you know I think the uncertainty that is created with workers. It shows how important it is to have a transparent and good relationship with your employees because they were turning to you for guidance in the early days when we're shutting that we weren't shutting down and we were shutting down and then we are pivoting to only take delivery and we didn't know when we're going to open back up, you know employees were looking for guidance from their employers and I think those employers that were connected to groups like The New York City Hospitality Alliance to rely on getting the most up-to-date information as possible and then be able to communicate that to their employees and make their business operating decisions based on that information as difficult as concerned as a time. It was who's better have some information than no information and I think those that had those relationships with their employees self some sort of commitment in May
Is to their employers and they felt that their employers care for their well-being. So I think having relationships with groups like The New York City Hospitality online relationships with your employees allowed for a better flow of communication, which gave people a sense of guidance support and Leadership, which are all things people naturally crave during crisis in times of uncertainty. So that's important focusing on all areas of your operations, knowing your business inside and out because it's a penny business. You need to know where all those pennies are going and then be able to make wise decisions for your business based on
Saving as many of those pennies as possible adding them up because they do turn into dollars and you need lots of hours to run a restaurant. Absolutely when this whole thing head and it has been an uncertainty the whole time through but I think at least at this point we have a better grasp on what's Happening. We we we figure it out ways to make it work again. I said that you had some clients that they just they really put their heads down to reinvent themselves as business owners in this industry and they're absolutely killing it right now. You know, they said hey, you know it, you know Screw the time do this on my own and they figured it out which I think is amazing the resilience in this industry is so incredible to see home deliveries up pizzerias not only selling pizza, but they would do create like, you know, make your pizza at home packages. So he has families were stuck at home together. They send you the pizza dough.
Play send you the different toppings and allow families when they're stuck at home not knowing what else to do to stablish relationships with local community-based organizations that are supporting people and communities in need. So it made me think a little outside the box of what you are a restaurant what you are is a small business and hopefully long-term. It will make these businesses more resilient and have additional streams of Revenue to help support them. So 1 stream of Revenue is knocked out completely four is reduced. You have these other streams of Revenue that can hopefully support you for a. Of time as you get your footing by absolutely. Absolutely. Yeah. I mean even spoke to One Restaurant concert. They were Brazilian Steakhouse.
Sit-down dining experience shut the whole restaurant down at for the dining experience turned their Concepts to specifically e-commerce meat delivery business and they've done better than ever, you know, so, you know go figure it's is crazy. Right? Like I said, hey, you know what? I may never open my doors again as a mall have before me cuz I'm doing much better now, see how people are Reinventing how they approach their customers how they approach their business in this whole industry altogether right industry interesting to see what do you think you've obviously seen so many different scenarios. What do you think restaurants should be doing right now in this moment if they want to continue growing their business as effectively as possible.
Well, you know what? I heard someone say something and I'm somewhat paraphrasing but they said you can't change your tires on a moving car. But now that we've been somewhat at a stop sign or red white time to open up the hood kick the tires see what kind of changes we can make so I'd say use this opportunity to look at what wasn't working in your business or your labor cost too high where there a lot of menu items you weren't selling where their opportunities to pass more takeout and delivery business where their opportunities to modify your business to carpool service part limited service.
And really think of what you are is a business, you know, it's very difficult to be all things to all people to find out what your business is at the core and be the best you can possibly be at the end.
When you're going a million miles an hour like you are pre pandemic it was difficult to stop and often get a full picture of your business operation. So use this to really get under the hood. Look at what was working what wasn't working what you may be able to modify and use it as an opportunity to make those changes and think about as we emerge from this pandemic. What do you want your business to look like as a business owner? What would make you not only profitable but emotionally profitable what would be fulfilling to you? Yes use this as an opportunity to do that and that's the most important very difficult for me or anyone to say, you know, you restaurant owner should be doing XYZ. You need to look inside yourself and say this is what I want to be doing.
This is how I think I should be doing it and this is how I think I should be doing it most effectively and then start to create the infrastructure and lay the tracks to do that because this type of opportunities not going to come along hopefully ever again be mindful of the fact that because it is such a dire situation. You may not have the money to do it. You may not feel like you have the emotional wherewithal to get through it. But again, not everything is just investing or putting money into it. As I said before it could be tweaking your
Menu tweaking your service style tweaking the way your restaurant is set up inside. So if you don't have money to do things, which most people don't are there ways. You can change your business that are not going to cost you money, but met at the end of the day end up saving money.
Absolutely, absolutely anything for a lot of restaurants, you know, they've they've turned to online right? I said, hey we were lying to walk by traffic will guess what we don't have that anymore. So we got to find a way to reach people online if we're not going to reach him in that, you know in person by them walking by to find us. How can we reach them on their phones? Have you seen any specific story that you come across there were some people that did do, you know they crew and they didn't really do any takeout or delivery and they started creating you do know incredible kind of delivery or takeout text. You know, I mentioned the pizzeria is and I know someone else who does a credible Korean barbecue restaurant and they basically create these kids for people to take and start doing at home. So I think there's a lot of different examples of this. I need to find out what works directly for your restaurant.
I think it's important if people start expanding into these segments for example of people into a big delivery business and they tend pivoted to deliver and found out that has been helping them to make sure that they set themselves up for Success. One of the big challenges with companies like GrubHub and seamless ignore Miss fees that they were extracting out of restaurant for their delivery is often. They were taking more money for water than the restaurant was actually making they were also ensuring that the restaurant doesn't have access to their own customer data when it's transferred or processed through these third-party delivery companies. So making sure that as you do start building your delivery business, for example, can you actually own your customer data that you're empowered and you control
Every aspect of it and you're just using these third parties Morris facilitators of the orders or do you have your own delivery widget on your website? Do you process your orders directly through your own system instead of relying solely on a multiple different third party system, you know going and ripping out the stickers for the 12 different delivery platforms you are on that you have posted in your windows and try to drive delivery orders directly through your own delivery platform. So you are not paying the Sky High route. So you have access to all of your customer data for packaging hold the quality of your food. That's as best as possible. Is it sustainable you all these different things or an opportunity to look at not just doing them for your straw.
The try to survive with doing them in a Smart Way. Absolutely I could not agree more. I may not always push her agency. Is he got it on your customer did it? You got to start using it. Please start using it. I mean wait wait, we talked to Pizza condoms all the time who had no idea that their point of sale is actually collecting phone numbers and emails and they have thousands of them and they thought why I didn't know what do I do with this I said will you know, those are lead those are customers Ozark opportunities to generate more cash utilize that you own a data miss. You just incredible angel. Thank you so much. That was incredible. Thank you so much for your insights. You know, you were such a unique position in space for anyone who does want to look you up or you know, look up the New York City Hospitality Alliance and maybe eventually learn more from you guys. How did how did they do that?
Sure, I can go to our website which is the NYC alliance.org the NYC lines. Org. That's where we are at on Twitter. I'm also on Twitter at at Andrew ridgeley. That's at Andrew. Last name Ridge a r i g. I also find all that info on our website, which is the NYC aligned. Org and hopefully I get involved and support the industry, you know what the end of the day? We are really all in this together because I chatted
The city of New York and the country of America will not come back unless our restaurant and nightlife industry is at the core of the recovery. So let's do this together and we'll get through this tough time as best as possible. Absolutely. Absolutely. Appreciate everything again. Thank you so much and will be staying with you real soon. Thank you.