Boston’s international connections are an important contributor to the local economy. But with the spread of the coronavirus, we are seeing a big downside to that interconnectedness: some businesses are hurt more than others. A few might even thrive. For everyone, it’s a new world order.
Travel, tourism, and events: At least six major "citywide” conventions in Boston have been cancelled, postponed or have gone virtual so far. The Seafood Expo North America show was the most prominent; it was supposed to have drawn 18,000 people. (Organizers are still trying to reschedule, but it could be tough to accommodate such a big crowd here later this year.) The same can be said for numerous smaller conferences and meetings. The numbers add up quickly. Paul English, cofounder of Boston online travel agency Lola.com, said 40 percent of business trips are being canceled.
The St. Paddy’s parade? Not happening. The Boston Marathon? Still an open question. (The smaller New Bedford Half Marathon was just canceled.) The ripples spread quickly: hotels, restaurants, taxi drivers.
Paul Sacco, chief executive of the Massachusetts Lodging Association, sounds despondent: The impact on hotels has been terrible. Millions of dollars in revenue lost. Occupancy rates dropped as much as 30 to 40 percentage points. Owners suffer, but so do service workers who won’t get the shifts they counted on.
Then there are the airlines. Hainan suspended flights to China from Logan Airport, and Korean Air stopped flying to Seoul. Domestic flights could be next. Delta Air Lines, for example, said it’s cutting domestic capacity by 10 to 15 percent. Massport reported that the number of passengers going through Logan’s security checkpoints fell 13 percent during the past week, compared to a year ago.
Retail and restaurants: Bob Luz, head of the Massachusetts Restaurant Association, said he’s noticed the most pronounced declines in Chinatown and other communities with Asian populations. Boston, as a whole, is taking a hit, in part because of the drop-off in tourism. It could get worse for downtown places if legions of office workers get stuck at home. To help, the tourism bureau added a third week to the "Dine Out Boston” event this month.
Jon Hurst at the Retailers Association of Massachusetts says merchants are starting to feel the pain. One clothing shop on Newbury Street, for example, went several days without a single transaction. Hurst said he might ask lawmakers to move up the state’s sales tax holiday, from August to sometime this spring, to give merchants a boost. Shares in two local publicly traded chains, J.Jill and Destination XL, have been hammered in recent days, much worse than the broader market decline; Quincy-based J.Jill even warned it’s at risk of being delisted from the New York Stock Exchange.
Not everyone is doing poorly. (Been to a Costco lately?) Delivery businesses – from Amazon to Instacart – are thriving, though many report demand-induced delays. Shares in Westborough-based BJ’s Wholesale Club rose 14 percent in the past week. Yes, Purell and Lysol are flying off the shelves. But so are toilet paper, pasta, Campbell’s soup — even oat milk.
Real estate: Buyers must like the super-low interest rates. The economic uncertainty? Not so much, especially as we head into the big spring season. Kurt Thompson, president of the Massachusetts Association of Realtors, said he’s not seeing sluggishness yet. But the National Association of Realtors’ top economist expects sales volume to drop by 10 percent. Virtual open houses could be next. One bright side: The low rates are fueling a refinancing boom.
Legal: Phones are ringing off the hook at law firms. One employment attorney at Goulston & Storrs said everyone he has ever represented seems to be calling with questions. What should employers do if schools shut down, or public transportation? When should the work-from-home decision be made? How do stores deal with sick customers? What kind of virus risks need to be disclosed to investors? A common thread: Clients are polishing off contingency plans, and putting them to the test.
Manufacturing: Factories are particularly vulnerable; many are adjusting their outlooks downward for 2020. Most plant employees can’t work remotely. Plus, Asia is often a crucial link in the supply chain. Hasbro warned that some toy shipments – yes, even baby Yoda — could be delayed. General Electric, in particular, has suffered, with shares plunging nearly 20 percent in the past week as investors apparently realized the fallout wouldn’t be limited to GE’s substantial Chinese operations.
Software: Software firms are already well adapted to go into WFH mode, as working remote is part of the deal for many. Greater Boston is a hotbed of business-to-business software providers. The ones that help employees work from home could get a boost. LogMeIn, for example, has seen spikes in demand for its GoToMeeting and GoToWebinar products; the Boston company is offering free access for health care providers, schools, and other nonprofits for three months.
Life sciences: Biotech companies and medical device manufacturers are seeing disruptions, just like the rest of us. But many also see a business opportunity. Marlborough-based Hologic just received federal funding for its coronavirus test. Moderna Therapeutics in Cambridge begins human trials this month for its vaccine. A team at Beth Israel Deaconess is working on two as well. And Japanese drugmaker Takeda, whose US headquarters are in Cambridge, is focused on a treatment. It’s too bad for them — and the rest of us — that vaccines and cures can’t be developed overnight.