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
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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

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

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