West Coast Shows the Damage Coronavirus Outbreak May Do to U.S. Businesses
Date: 2020-03-05 19:22:28
For a look at the potential economic fallout of the coronavirus, San Francisco’s Union Square presents a worrisome sight. #Coronavirus #Covid19 #CoronavirusOutbreak
The district — packed with pricey restaurants, luxury shops and gleaming hotels — is usually a magnet for tourists and conference-goers. But with travel cooling and a string of conferences canceled in the last two weeks, some businesses are experiencing a sharp and sudden downturn. Shopper traffic is slow. Taxi drivers are sitting idle. Hotel demand is dwindling.
“It’s devastating,” said Anna Marie Presutti, general manager of the 533-room Hotel Nikko, which has seen its occupancy rate plunge from nearly 90% to just below 50%. “We’re experiencing what we experienced right after 9/11.”
While San Francisco has yet to have a confirmed case of the coronavirus, surrounding counties reported some of the country’s first instances of community transmission. That’s keeping tourists and even some residents at home — a phenomenon already starting to ripple around the country, hitting business owners and threatening broader damage to the economy.
“The effects cascade through a whole series of things: the concessions at the airport, the taxi and Uber drivers, the hotels, the restaurants, the retail,” said Sean Randolph, senior director of the Bay Area Council Economic Institute.
Anxieties were likely to heighten further after Governor Gavin Newsom declared a state of emergency Wednesday following the first virus death in California. The man’s case was linked to travel on a cruise ship from San Francisco to Mexico last month.
Tourism stands to be the hardest-hit industry across the U.S., according to William Yu, an economist at the University of California, Los Angeles. He originally predicted 2% economic growth this year but has cut that forecast to 1.5%, as the drop in travel reverberates to other areas.
Beyond fears of traveling and interacting with strangers, businesses also stand to be hit by falling consumer confidence as the contagion spreads, said Robert Dye, chief economist at Comerica Bank.
“We could see a dent in consumer spending,” Dye said. “Restaurants, entertainment, travel, even car and home purchases, depending on how bad things get.”
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