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COVID-19

Cities may reopen, but will customers’ wallets?

Jasmine Garsd May 4, 2020
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People stand outside the gates of Disneyland in March. David McNew/AFP via Getty Images
COVID-19

Cities may reopen, but will customers’ wallets?

Jasmine Garsd May 4, 2020
People stand outside the gates of Disneyland in March. David McNew/AFP via Getty Images
HTML EMBED:
COPY

Entertainment giant Disney reports its first-quarter earnings tomorrow, and they are expected to be less than stellar. COVID-19 has shut down the company’s theme parks, its subsidiary ESPN has no live sports to broadcast and film production has ground to a halt. Many cities in the U.S. are reopening or considering doing so, but when it comes to companies that bank on large gatherings, analysts are forecasting that the impact of the pandemic will be long-lasting.

“Ugly” is the word analyst Tuna Amobi, with research firm CFRA, uses to describe Disney’s upcoming results. He said that right now, he’s looking at which companies can handle pain. But, he said, “the question is how much pain? I mean, I think that we have probably another two quarters or so of this.”

In other words, can companies withstand the reality that COVID-19 may not be going away anytime time soon and that many restrictions will persist?

And some analysts are warning clients about the possibility of a second wave of infection.  

But Neil Macker at MorningStar says we still need to worry about this first wave. When forecasting for companies, he said, one has to consider several pressing factors. “Public opinion. The other one is public liability, and the other one is just their general regard for their patrons and wanting to make sure they are safe.”  

He’s predicting theme parks and other businesses that depend on people being able to gather freely won’t even consider reopening until September. He said they’ll  keep taking a hit in 2021.

Beyond theme parks, live music analysts don’t expect to see concerts resuming this year. Tourism analysts aren’t optimistic. And Shane McMurray with Wedding Report, a company that collects data on the wedding industry, said the possibility of a second wave of infection is weighing on consumers’ minds. “Most people are postponing, but even then. With postponements, now people aren’t going to travel, people aren’t going to gather in large quantities. So you are probably going to see those guest counts come way down.”

He expects the pandemic to impact his industry for… years to come. 

Cities may open up again, but he’s not sure that means people’s wallets will. 

At least for some time.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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