Disney’s Shanghai resort partially reopened. Will people go?
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Consumers are the linchpin of the U.S. economy. Spending by or on behalf of consumers amounts to about 70% of economic activity in the U.S. Which is all well and good when consumers are feeling good. But what happens when that confidence goes away?
Behavioral economist Peter Atwater at William & Mary compared consumer confidence to a tower made of Legos which COVID-19 has shattered.
“It takes a very long time to build it up,” Atwater said. “It’s inherently very fragile.”
It takes an even longer time to rebuild it. It’s easier to scare people away from public spaces than it is to get them to come back. Economist Howard Chernick, the author of “Resilient City: The Economic Impact of 9/11,” said that after the Sept. 11 attacks, the travel and leisure industry took the first big hits. People didn’t feel safe in public spaces.
“Las Vegas, which is a very tourist-dependent city, basically shut down,” he said. Chernick sees some similarities today. Once this crisis blows over, he said, it could take the leisure industry quite a while to get back on its feet — at least another year.
John Gerner, managing director of Leisure Business Advisors, which specializes in theme parks, held this position during and after 9/11. What he learned was that in order to get people back out, companies needed to be transparent.
“We can’t talk down to our guests,” Gerner said. “We have to work with them and essentially say, ‘Look, this is what we’re doing, and we’re going to need you, the guest, to do your share.'”
Meaning consumers also play a part in making it safe to go back out there, by taking the recommended precautions. Like, staying home when they’re sick and washing their hands often.
COVID-19 Economy FAQs
Which businesses are allowed to reopen right now? And which businesses are actually doing so?
As a patchwork of states start to reopen, businesses that fall into a gray area are wondering when they can reopen. In many places, salons are still shuttered. Bars are mostly closed, too, although restaurants may be allowed to ramp up, depending on the state. “It’s kind of all over the place,” said Elizabeth Milito of the National Federation of Independent Business.
Will you be able to go on vacation this summer?
There’s no chance that this summer will be a normal season for vacations either in the U.S. or internationally. But that doesn’t mean a trip will be impossible. People will just have to be smart about it. That could mean vacations closer to home, especially with gas prices so low. Air travel will be possible this summer, even if it is a very different experience than usual.
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
You can find answers to more questions here.
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