Nearly Half of Restaurants Unable to Pay Rent: Tourism Buckles Under Recession

Few are paying attention to a crisis with restaurants and small businesses. Silently, an economic collapse becomes more and more possible in plain sight.

It’s Election Day in the United States. Maybe we should call it Election Month. If that’s the case, what are we going to call the weeks of litigation, unclear counting and backlash that occurs in the weeks after (and which is a new phenomenon)? We’re also in the middle of Elon Musk taking over Twitter, Trump potentially announcing he’s running for president again, the Disney earnings report, video game launches for the holiday season, etc, etc, etc.

In other words, much of the press is focused on things other than the economy and the recession. That will change tomorrow or once the media figures out a way to use it for their own purposes. But here at That Park Place, we’ve come across a story that should send shivers down the spines of all of us. For a year now we’ve been talking about how bad it is getting out there for small businesses, especially those associated with tourism and entertainment. We’ve covered the number of restaurants and tourism companies that went out of business permanently as a result of the lockdowns and we’ve chatted about how many are on the edge now from a one-two knockout blow of a recession following. Yet until the stats came out we’re about to share, even we were probably underestimating just how rocky 2023 is looking. And it’s a real shame the mainstream media has largely been hiding this data from the public’s consciousness. This is the sort of thing that will directly impact many of our lives:

About 37% of small businesses, which between them employ almost half of all Americans working in the private sector, were unable to pay their rent in full in October. That’s according to a survey from Boston-based Alignable, a network of 7 million small business members. It’s up seven percentage points from last month and is now at the highest pace this year, the survey showed.

Chuck Casto, head of research, at Alignable, said that small business owners are resilient but incomes are “basically being eaten away by inflationary pressures.”

— Bloomberg (via Unusual Whales)

The data then goes onto indicate that 49% of restaurants are also unable to pay their rent. Forty… nine… percent. That’s up from 45% in July.

Essentially, we are staring down the barrel of a recession that will disproportionately impact the smaller companies that provide entertainment, leisure and fun to millions upon millions of Americans. And their collapse will absolutely wreck the lives of those who depend upon them. The employees go without a job, the landlords go without rent money. It’s a cascade effect at both ends.

45% of American restaurants could not even pay Rent in July!

One-third of all Small Businesses missed Rent.

It’s a meltdown on Main St. The Biden recession, see the proof in my #ChalkTalk pic.twitter.com/fZtkBePaaE

— Steve Cortes (@CortesSteve) August 5, 2022

Amid growing concerns that the economy could be headed for a recession, some food companies & restaurants continue to raise prices even if their inflation-driven costs are covered. Critics say the moves are about increasing profits not covering expenses. https://t.co/Zej5Ey6LOZ

— CharlotteFLDemocrats (@CharlotteFLDems) November 8, 2022

Competing viewpoints presented in the two tweets for fair reporting.

Basically what we’ve done is shut down small businesses across the world for two years, then let them reopen with policies in place by world leaders that then took us straight into a major recession. We all took note of the inverted yield curve that signals unemployment and recessions ahead in nearly all cases. But then we went into two quarters of American non-growth and now we’re back into another inverted yield curve that hasn’t been seen since the eighties. That’s phenomenally bad to have a second one occur while the federal government is also trying to raise rates to combat inflation. It’s like a perfect storm of stupid policies enacted all over the world which are now going to descend upon the small businesses that fuel half the American economy. Did they do anything wrong? No. But they’ll be the ones who suffer while government officials keep eating their steak, lobster and caviar.

There is a silver lining, however. There is positivity available. Because you know this information while most “normies” have no idea (yet), why don’t we all pick a local restaurant or two… especially those that need the ever-dwindling tourism to survive… and let’s adopt them. Instead of going out to a big chain that can handle recessions better, go give your money to the local family that has been running a mom and pop restaurant for decades. Help the guy out who spent his life savings on his dream of running a restaurant. And you know what? Go visit your local tourism businesses too! Do a staycation and feed money back into the little guys and gals who are about to be whammo’ed by a rough economy (again).

In doing so, that would be a positive response to the nonsense we’ve been watching for years now that is driving our world into less and less for more and more chaos.

For all the latest news that should be fun, keep reading That Park Place. As always, drop a comment down below and let us know your thoughts!