NEW NORMAL FOR SMALL BUSINESSES
WHILE THE NUMBER of cases of COVID-19 were not as overwhelming in Yuma as in other more dense areas of the United States, still, there have been losses, and our hearts go out to those who have lost loved ones. There is probably not a person in Yuma County who could say their life has not been touched by this pandemic. #YumanKindness and cooperation in our community are making these days of COVID-19 more bearable, but there’s no getting away from the deep impact the pandemic is and will have on all parts of our economy, from worldwide to local, and across all segments and industries. It’s largely because of the strength, resilience, creativity and flexibility of Yuma’s business community that many will find their ways through the recent upset.
Taking a look at what’s happening to the travel and tourism industry and what people in these businesses are doing can provide a roadmap for businesses in other sectors. Here’s a brief synopsis of the hole into which “travel” fell, starting in mid-March. It was a steep downhill slide and in some ways, this moment may count among the darkest, before the relief and aids put in place by the federal government, state of Arizona, and within the City of Yuma can begin to rectify the millions of dollars wiped off the slate in travel and tourism just within our own community. For those of you outside of the realm of travel and tourism, you might find some tips and BIZ | May-June 2020 ideas that are applicable to your industry and to your particular business.
The numbers released on March 17th by the U.S. Travel Association showed spending on travel in the United States—transportation, overnight accommodations, retail, attractions and restaurants—is projected to plunge by $355 billion for the year, or 31%. That is more than six times the impact of 9/11.
The estimated losses by the travel industry alone are severe enough to push the nation into a protracted recession, with the second quarter of 2020 being the low point, according to projections from the USTA. The projected 6.6 million travel-related jobs lost would, by themselves, more than double the previous U.S. unemployment rate.
Federal relief programs such as the CARES Act and the Small Business Administration’s Economic Injury Disaster Loans were pushed through quickly to start the processes of aiding small businesses impacted by COVID-19. First to make major shifts in their businesses were our local restaurants. Some have proven very inventive about how to still connect with customers and keep their doors open. The second quarter of the year looks to be the most damaging to travel-related businesses. During these less-busy times, many hoteliers are sharing their advice.
Tips and ideas:
• Use this time to take a fresh look at every aspect of your business. What could be better? What needs refreshing? While your business may not have the money to make improvements at this time, making the plans for the future could put you a step ahead. Just as those in the lodging industry are using their work time to spend time or sleep overnight in each room to find out what the experience is really like, as a manager in your business, take this time to observe, listen, and question. Is your business one where you could have friends be “secret shoppers” to see how the customer service is from your employees? Could you gift friends or associates with a service from your company and ask if they’d share a candid review of the experience?
• It can be hard to know how to market appropriately, when it seems things are still changing drastically day by day. Experts suggest looking at your marketing needs and messaging in two-week chunks, with a “right now” plan, followed by a “it still stinks” plan, and maybe several additional steps down the road, crafting messages that are right for when customers resume their normal activities.
• Cross-check your website, social media platforms and Google My Business to make sure they are all updated and as current as possible, including updating photos.
• This is the time to dive deep into where your organization can trim expenses. Like in a hotel where they can shut off one floor, can you right-size your physical space or at least modify usage? Could you relax your dress code and vary the climate control by a couple of degrees to conserve on utility expenses? Are there any subscriptions or usually regular costs which could be skipped for a short amount of time if the budget is tight?
• Some businesses with ample space, such as hotels, have started to rent out rooms or areas during the daytime! Working from home may not be as desirable as it sounds, and some organizations with extra space have been offering a safe and clean work environment, usually with good WiFi and other amenities like a coffee maker or copy machine.
Pent up demand
Business owners in travel and tourism related businesses are hoping for a great rebound. And recent polls play out that scenario: According to Harris Poll data taken March 28-30, nearly 25 percent of respondents are planning on going on vacation or traveling once things return to normal and businesses reopen. Younger travelers will be among the first to return to the market, according to the Harris Poll. Among Gen-Z, 27 percent are planning to go on vacation or travel.
“I think when this has finally come under control it will create a huge need to travel,” said Samantha Brown, who hosts “Places to Love” on PBS. “And I’m not talking just travel to far places … but small trips to more local and state destinations. We will want to move and most importantly reconnect to people.”
Leisure travel will most likely take off the fastest, and it’ll start with shorter, closer trips and lower spends before leading to international travel. Those first travelers back could include some micro-segments like older retirees, millennial families on road trips and high earning couples.
To that end, Clayton Reid, CEO of MMGY, says that 2020 could very well be “the year of the car.” COVID-19 could make trips that avoid passing through airports or traveling long distances on mass transit more attractive. These preferences could bode well for increased visitation to Yuma, which is easily reachable by car. The Yuma area is also long on wide, open spaces, and experiences that are local and authentic.
A bright spot ahead
When things do start improving, the speed of that recovery could match the speed of the fallout, according to new research from marketing firm MMGY Global. MMGY described its best case for a recovery in the market focuses, which is a four phase change in consumer mentality—fear, understanding, action and recovery.
According to CEO Clayton Reid, we went through the “fear phase” of the crisis; consumers are now in the understanding and action phases. “Rational behavior will follow soon after that,” Reid said.
Reid said they expect recovery mindsets to start shifting 45 to 90 days after the peak coronavirus (COVID-19) infections. According to that timeline and MMGY research, there will be a pent-up demand for travel, unleashed in late Q2 across global economies.
“And,” said Reid, “we know that travel confidence leadsout consumer confidence, therefore will be a leading indicator for the economy. Expect shoots of good news to emerge first with airlines then hotels, restaurants and cruise lines.” As your business navigates any decline due to COVID-19, know that a subsequent rise could be on the way sooner than you think.