Restaurateurs are taking notice. To persuade diners to visit their other locations outside New York City and make up for lost sales in the dining capital, business owners are offering promotions and shifting workers to New Jersey, Connecticut and other parts of New York state.

Call it a kind of pandemic arbitrage, said Jeffrey Bank, chief executive officer of Alicart Restaurant Group, which owns destination eateries including Carmine’s in New York and in the Tropicana Atlantic City.

“It makes no sense that indoor dining is not safe in New York City, but it is safe in Long Island, in Albany, in Westchester,” said Bank, who is promoting a deal the Tropicana is offering to get New Yorkers to drive down to Atlantic City.

“It’s only 1 hour 45 over the GW Bridge, and you can eat the same great food at Carmine’s with a discounted room,” he said.

A series of indoor dining bans have popped up around the U.S. as Covid-19 cases surge again. New York City was the latest city to stop indoor service since most states rolled back restrictions from the spring meant to stymie the spread of Covid-19.

However, the difference this time around is that other parts of New York State, and surrounding New Jersey and Connecticut, still allow indoor dining at various levels of reduced capacity. For instance, New Jersey restaurants can operate at 25% of indoor capacity while Connecticut eateries can run at half capacity.

Conflicting Orders

The discrepancy has prompted complaints from diners and business owners over regional regulations intended to stop a virus that knows no geographic boundaries. It’s also caused public confusion over the health reasons of why it’s safe to sit inside a restaurant in, say, Jersey City, or Greenwich, Connecticut, but not in Manhattan.

“It certainly is more effective to have a coordinated response that’s regional rather than ends at the state line,” said Scott Braithwaite, a professor of population health and medicine at NYU Langone Health.

Restaurants and bars account for 1.4% of coronavirus exposures, Governor Andrew Cuomo said in a recent briefing, while local gatherings drive three-quarters of exposures. That suggests the move to close restaurants could have unintended consequences, Braithwaite said.

“If people were to say, ‘Let’s not go out to the restaurant, let’s go to my home,’ and they didn’t wear masks and sat close to each other, then it could even be worse,” he said.

Because of the latest round of restrictions, business owners are scrambling to move workers and investment away from New York City. Sati Sharma, owner of Brick Lane Curry House in Manhattan and in Jersey City, moved three of his workers to New Jersey after the ban came in to effect Monday. Five of Bank’s New York City employees moved to the Atlantic City Carmine’s the same day.

Bridge and Tunnel Deals

Restaurants are also promoting deals at locations outside of New York City to get New Yorkers into those dining rooms. The Tropicana Hotel is offering a $44 room rate on Thursday nights for Carmine’s patrons in Atlantic City.

Chef David Burke, whose restaurant empire includes three spots in New York City, said he’d offer any New Yorkers who dine at his New Jersey restaurants 10% off their check. “It’s too cold to eat outdoors now, people want to be indoors,” he said.

Edward McFarland, the owner of Ed’s Lobster Bar in New York and Sag Harbor, N.Y., says that the problem is a lack of consistency from Governor Cuomo. “You’re telling me that indoor dining is causing an uptick in cases in New York City, but nowhere else in the state? I haven’t seen anyone produce numbers that support this closure. In Long Island I can still have 50% seating.”

Others are trying to rejigger their New York City operations to keep serving food. Osteria Morini in Soho will increase delivery, while Little Beet Table on Park Avenue says it may just close up shop on slow days. For some iconic establishments, such as 21 Club and Bistro Le Steak, it’s already too late. They say they are closing their doors after decades of serving city patrons.

Already more than 110,000 restaurants have closed permanently or for the long-term across the country, with New York State seeing more than 8,000 closures, according to the New York State Restaurant Association. More than half of those are in New York City, the industry group said.

‘Living Room Spread’

New York City Mayor Bill de Blasio on Dec. 14 said he recognized the pain the restaurant industry has endured throughout the pandemic, but that he agreed with Governor Cuomo’s decision to shutter indoor dining to stem the disease’s spread.

That’s despite the fact that household gatherings, not restaurants, are driving exposure in New York.

“Restaurants have done their part, and the state’s own numbers reflect this fact,” Fleischut said Melissa Fleischut, president and CEO of the New York State Restaurant Association, in a statement. “This action is unfair and devastating.”

The risk that gatherings would move from restaurants to people’s homes is the reason New Jersey Governor Phil Murphy said he decided not to follow New York City’s lead in shutting down indoor dining.

“We’re not going to do something to make us feel good if we don’t have the data that supports it,” Murphy said of his decision to keep indoor dining at 25% capacity in New Jersey, among the last U.S. states to return to indoor dining in the spring.

Cuomo’s office said the decision to close New York City was a calculated one. “New York City has one of the densest populations in the nation and as we saw in the spring, that can cause infections to spread rapidly,” said spokesman Rich Azzopardi.

Azzopardi said the state also banned indoor dining in other dense population centers, including Buffalo, Rochester and Syracuse. “This is about saving lives and we know this makes some people unhappy, but better that than sick or worse,” he said.

Pennsylvania has also taken action. Governor Tom Wolf suspended all indoor dining through Jan. 4, along with salons, casinos, museums and gyms in the state, which has averaged 10,000 new cases a day for the past week.

The decision drew fury from some restaurateurs who vowed to defy the order and risk hefty fines.

Saucony Creek Grille and Catering in Kutztown, Pennsylvania, said it would remain open seven days a week, according to a Facebook post.

“Sorry if this upsets anybody, but we still have bills to pay, and I refuse to have my daughters stare at an empty Christmas tree this year,” the post said.