If people don’t go to the office, then all the infrastructure built to support workers is no longer viable.
Remote and hybrid work is reshaping inner-city economies, and restaurants are among the businesses feeling the most acute impact.
“As remote or hybrid work continues to be popular, office attendance has declined. Less in-person work can increase vacancy rates and reduce foot traffic to other businesses located in dense office areas,” according to data from the Federal Reserve.
That change took place right next door to my former office, where a Starbucks in the adjacent hotel closed after the pandemic.
For business, it’s death by a thousand paper cuts. It’s not the loss of one customer, but thousands of them who visit less often.
Restaurants, cafes and bars have felt the hybrid work situations.
“Even though you might be busy on Wednesday and Thursday, Monday and Friday can be very slow,” Andrew Rigie, executive director of the New York City Hospitality Alliance, told CNBC. “If someone were to walk past a restaurant around lunch or dinner time on a Thursday, they might say, ‘Wow, that restaurant is packed, they’re so busy,’ but it’s not like that every day.”
This is not unique to New York.
“In cities like New York, Los Angeles and Atlanta, the three-day in-person work week has posed challenges for hospitality companies. With fewer workers in the office on Mondays and Fridays — which for some companies were their strongest sales days — many companies have been forced to change business hours or launch initiatives to attract customers at the beginning and end of the week,” CNBC reported.
This shift in consumer behavior has forced an iconic Boston market to close its doors for good.
Food halls have been a growing trend in tourist areas, prompted by the closure of buffets by Covid. In Las Vegas, where there used to be buffets in almost every hotel on the Strip, only a few remain and more food halls have opened.
A modern take on the mall food court, food halls offer multiple restaurants under one roof. Some even offer QR code ordering, making it easy to grab a meal where dishes come from multiple restaurants.
This concept was also adopted in cities as a way to serve workers, and one of the most famous food halls, Time Out Market, located near Fenway Park, decided to close its doors.
“Following the pandemic, we have seen the Boston market recover and grow, and we have focused on initiatives that drive further growth; however, to this day, traffic remains inconsistent in the area due to ongoing hybrid activity and, in addition, operating costs have increased – all of which hinder consistent profitability,” Time Out Market CEO Michael Marlay said in a statement.