Nearly half of restaurant owners said they struggled to pay their rent this month since the labor shortage has reduced their revenues

• Restaurant owners say they’re struggling to afford rent amid a devastating labor shortage.
• Two-thirds said they had difficulty finding workers, per an Alignable survey.
• This is despite them offering higher wages to attract new hires.
• See more stories on Insider’s business page.

Nearly half of restaurant owners say they don’t think they can afford rent this month as the pandemic continues to paralyze the industry, according to a survey by Alignable first reported by Pizza Marketplace.

Many of these owners said the US’ current labor shortage, which in some cases caused them to shorten opening hours and therefore reduced revenues, was the reason behind this, Alignable said.

Alignable surveyed 7,774 small and medium-sized US business owners and found that most businesses said they were struggling with rent payments due to inflationary pressures and hiring shortages.

But it found that the restaurant sector was worst hit by the problem, with 49% of restaurant owners saying that they were unlikely to be able to afford rent in May. This is up from 35% the month before.

Read more: How Starbucks is defying the labor shortage crisis with transformative perks, not cash teasers like McDonald’s

“This is sad news for the restaurant industry, which, last month, appeared to be one of the frontrunners in the recovery, slowly rebounding from COVID issues,” Alignable said, noting that many restaurants had “spent the last 14 months struggling just to stay afloat.”

Its surveys showed that restaurants’ ability to pay rent fluctuated much more than small business owners from other industries, soaring in March before sinking in April and then rising again in May.

The latest survey, carried out between April 24 and May 17, showed that half of small business owners said they were struggling to find workers – rising to two-thirds in the restaurant industry.

This is despite many restaurants hiking up wages to attract new workers. Alignable said that half of restaurant owners in the survey said that they were paying workers more now than they had during the height of the pandemic, largely to lure in new hires.

“Based on that data, and hundreds of comments we’ve received, it’s fair to say that much of the setback for restaurants can be attributed to the labor shortage,” Chuck Casto, Alignable’s head of corporate communications and news, told Pizza Marketplace.

It’s not just small businesses that have been affected by the labor shortage. Restaurant chains such as Subway and Dunkin’ to have cut opening hours and closed dining rooms, while Chipotle, Taco Bell, and others are offering lucrative perks such as cash bonuses, raises, and education benefits to attract new staff. A McDonald’s restaurant is even offering free iPhones to new hires.

Insider’s Ayelet Sheffey reported that shortages could be caused by a mix of unemployment benefits, COVID-19 health concerns, caring responsibilities, and low wages.

Danny Meyer, the CEO of Union Square Hospitality Group, said that many restaurant workers left New York City because they couldn’t afford to live there without their usual wages during the pandemic, leading to a major staffing drain for businesses in the city. He added that many laid-off staff got jobs in other industries and may not return to hospitality.