Center City’s jobs, retail, and tourism are recovering — but not everything is at pre-pandemic levels yet

Center City’s mix of residential, office, retail, medical, and entertainment buildings has helped the area recover from the pandemic, though the bounce back remains incomplete, according to an annual report from the Center City District that tracks trends downtown and across the city.

Philadelphia has the country’s third-largest downtown population, which helps when tourists and office workers haven’t returned in pre-pandemic numbers. And Center City has been gaining residents since the start of the pandemic. The core of downtown had 35% more residents in March 2023 than in March 2020, according to the business improvement district.

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Center City District uses its report as a yearly benchmark and an informational tool for businesses looking to move to or grow in the city. Center City is continuing to rebound from the economic shocks of the last few years, according to the report released Wednesday.

To continue to attract residents, workers, visitors, and businesses, “we think we need to change both perception and reality at this point,” said Paul Levy, president of Center City District.

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For example, in a study released this month, the Brookings Institution found that Center City is “remarkably safe compared to the rest of the city as a whole,” which runs counter to feelings across the region that crime has increased downtown. Violent crime in Center City is on par with pre-pandemic levels, and nonviolent crimes are down, according to Center City District’s analysis of police data.

To increase public safety and draw visitors, Center City District has added bike patrols, expanded partnerships with police and private security, and has been working to maintain parks and public spaces.

More than two in five jobs in Philadelphia are in Center City. And one in four residents from every neighborhood commutes downtown for work.

From 2019 to 2020, employment in the private sector in Philadelphia dropped 15%, mirroring declines in other major U.S. cities. As of the end of February 2023, the city had regained the total number of jobs it lost.

But the city’s job growth from 2009 to 2022 ranks 25th out of 30 major U.S. cities.

Some citywide job gains by sector:

The number of workers in offices has been trending upward. But as of February, the average daily worker volume in Center City’s office district was slightly less than half where it was in 2019.

According to the report, “the partial return of downtown office workers has constrained” Center City’s recovery. Fewer workers in offices means less need for workers in service and retail industries that are supported by those office jobs. Restaurants also take a hit.

Levy acknowledged that “you can’t order workers back.” But he said one of Center City District’s jobs is to help persuade workers to return. The district has been holding one-on-one meetings with businesses and talking to employees in lobbies about safety and amenities downtown.

Starting this summer, the district plans to partner with office buildings to “activate” office plazas in the late afternoons and early evenings with the types of cultural and dance events it organizes for Dilworth Park, which is adjacent to City Hall.

Foot traffic has been gradually growing since the days of empty sidewalks early in the pandemic, but it isn’t what it once was. In March, pedestrian traffic was 77% of the traffic in March 2019.

In 2022, Center City’s hotels had 2.87 million occupied room nights — a big improvement from a low of about 1 million in 2020. But 2022′s numbers are still below levels in 2019, which had 3.5 million occupied hotel room nights.

Center City District expects these numbers to grow as more international tourism returns and more conventions come to the city.

The Pennsylvania Convention Center had 552,000 visitors last year but estimates more than 1 million people will visit this year. Historically, about 1.1 million people per year have visited the Convention Center.

Most of Center City’s performing arts venues, museums, and other cultural institutions that were surveyed reported that in-person attendance in 2022 ranged from 50% to 75% of 2019 levels.

» READ MORE: Center City’s shoppers and diners are back — almost to pre-pandemic levels

The Philadelphia Museum of Art saw attendance grow the most since 2020. Daily visits in 2020 stood at 23% of 2019 levels. Visits in 2022 grew to 81% of pre-pandemic levels.

“The continued growth of attendees at concerts and plays, visitors to museums and historical sites, at institutions large and small will be key to the revitalization of downtown,” according to the report.

More than 2,900 businesses have ground-level storefronts in Center City. The occupancy rate for ground-floor retail reached nearly 82% this year — slightly below 2019 levels — and has been trending up since January 2021.

More stores and restaurants opened than closed in 2021 and in 2022. Since 2020, 175 retail, restaurant, and service businesses have opened a store in Center City. At least 49 more plan to open this year.

Retailers that sell apparel, food and drink, and jewelry are most common in the core of Center City. The most common services provided are beauty, health, and financial.

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“Retail is one of the most obvious indicators of the health of downtown,” the report said. It mentioned “a few notable closures,” but the Center City District is pleased with recent occupancy and leasing trends and the mix of businesses.

The report acknowledged the loss of some prominent national retailers such as Gap, Talbots, and Ann Taylor. Center City District blamed company downsizing and financial troubles, combined with the business shutdown and civil unrest early in the pandemic.

» READ MORE: Target is closing one of its Center City locations

H&M shrank its Center City footprint this year, and Target plans to close one of its Center City locations this spring, citing declining foot traffic and years of underperforming sales.

The retail footprint in the core of Center City at the end of 2022 — about 50,000 square feet leased — was about what it was at the end of 2021. But it was less than half what it was at the end of 2019 — about 136,000 square feet of retail space leased.