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Contrary to what the very stable genius in the White House says, it’s only a matter of time before the full fury of the coronavirus reaches our shores.
No sooner had President Trump assured the nation on live TV last Wednesday that the “risk to the American people remains very low,” then news broke of the first case of Covid-19 of unconfirmed origin in the United States.
That suggests the virus may be already be on the move here, undetected and spreading.
So much for those talking points.
In a courageous move, considering her boss’ notoriously thin skin, National Center for Immunization and Respiratory Diseases Director Dr. Nancy Messonnier ditched the happy talk at a news conference last week and leveled with the public.
“It’s not so much of a question of if this will happen anymore but rather more of a question of exactly when this will happen,” Dr. Messonnier said, adding rather famously, “this could be bad.”
Who Will Hurt Most?
So, what does this all mean for Massachusetts and the business community here?
It would be grotesque to talk of winners and losers here, but the fact is, if we get hit with anything like what we have seen from afar in China, there will be major disruptions to every facet of life, especially and including industries and businesses across the board.
The fact is, if we get hit with anything like what we have seen from afar in China, there will be major disruptions to every facet of life, including businesses.
The fact is, if we get hit with anything like what we have seen from afar in China, there will be major disruptions to every facet of life, including businesses.
And other than Moderna, the Cambridge-based biotech that last week sent a potential coronavirus vaccine to the National Institutes of Health for testing and whose stock had gone haywire, as of this writing, there is little upside and a lot of risk for companies large and small in the emerging pandemic.
However, some will clearly be at greater risk than others, with those industries and sectors that are likely to bear the brunt of any full-scale American outbreak of COVID-19.
Businesses at most risk include:
Hotels and tourism: The hotel industry in Boston is a major employer, with 276,000 people drawing paychecks from hundreds of hotels across the city and its suburbs, federal stats show. That’s more workers than in the financial services sector and close to the number who work for the government. But an outbreak of the coronavirus could put a quick stop to both business and leisure travel, leaving hotels empty. Even without an outbreak here, local hotels, restaurants and attractions are likely to take a hit, with Chinese tourists now the largest single group of overseas visitors. The projection just a few weeks ago was a 28 percent drop overall, with a loss of $10.3 billion in tourism markets across the country.
Shanghai, China – February 21, 2020: Banner reminding “Returning residents to Shanghai should consciously self-quarantine at home for 14 days” hung on a street in Jiangwanzhen to contain Covid-19 coronavirus.
Commercial and residential brokerage firms: The stock prices of office leasing firms like Cushman & Wakefield, JLL and CBRE all took big hits last week, all falling more than 4 percent last Monday as the market rout got rolling. It’s not hard to understand why – the last thing companies are going to be doing in a coronavirus outbreak is hunt for new office space. Also taking it on the chin were REITs that own malls and other retail space and apartments – likely because their short-term revenues will suffer, as well.
The state’s casino business: Chinese authorities shut down dozens of casinos in Macau, the world’s largest gambling hub, last month. Every day for them means another $100 million in revenue gone kaput. It’s hard to imagine the Massachusetts Gaming Commission wouldn’t take similar action if and when the coronavirus breaks out here. That’s likely to push Wynn’s Encore Boston Harbor, the MGM Springfield and Plainridge Park in Plainville further behind the financial eight–ball, with all three already performing well below their original expectations. At the end of 2019, Wynn’s massive casino resort in Everett was on track to spin off $583 million during its first year in business, well below the $800 million the Las Vegas gambling giant had originally projected.
Restaurants and bars: Still, the casino giants that do business in Massachusetts will be just fine, even if they are forced to take a haircut. The same can’t necessarily be said for the thousands of restaurants and bars across the Boston area and the state, many of which are on a thin line between making enough money to pay their bills and being forced to close.
Boston’s professional sports teams: A coronavirus outbreak could certainly put a damper on what looks to be an already troubled Red Sox season. We could be looking at a very empty Fenway Park on opening day, depending on the timing here. The Celtics and Bruins could also take a major hit to their ticket revenue, especially if COVID-19 were to strike during the playoffs this spring.
Scott Van Voorhis
On the Bright Side
Maybe it won’t be all bad as that. Who knows, though President Donald Trump’s appointment of that noted infectious disease expert, Vice President Mike Pence, to be the coronavirus czar, is about as dumb as it gets.
But given the choice between believing Trump and our nation’s top public health expert, I know who I am going with.
How about you?
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
