The Mercury News

Top CEOs fret over outlook as virus cases rise

- By David Gelles

With coronaviru­s cases around the country on the rise and states rolling back their reopening plans, many of the nation’s top business leaders are steeling themselves for a period of prolonged economic disruption and the prospect of a slow, halting recovery.

“I’m less optimistic today than I was 30 days ago,” said Arne Sorenson, chief executive of Marriott Internatio­nal. “The virus is in so many different markets of the United States.”

Sorenson’s outlook, like those of many chief executives, has worsened in recent weeks as virus cases have spiked in the South and the West, leading some states to close businesses that had previously been allowed to open.

He said that after bookings at Marriott’s hotels rose in early July, they had recently fallen again.

“The last week was weaker than the week before,” Sorenson said.

While retail sales have mostly rebounded to precrisis levels and the stock markets remain buoyant, business leaders and economists still see serious cause for concern. Tens of millions of Americans are out of work. Important parts of the economy — including live sports, movie theaters and many tourist attraction­s — remain largely shuttered. Business districts are still primarily empty as people continue working from home. And as the virus spreads, new lockdowns could cause further economic disruption­s.

Already, there are signs the recovery is losing momentum.

Air travel had been on the rise, with the Transporta­tion Security Administra­tion reporting a steady increase in passengers at American airports. But Ed Bastian, chief executive of Delta Air Lines, suggested that momentum had sputtered in recent days.

“I have a more cautious view than I did four weeks ago,” Bastian said. “While the TSA numbers have continued to slowly tick up, the reality is that the cash that people are willing to commit to future travel decisions has stalled. The fear that the virus has created in the South has put people more into a stay-at-home mentality than we’d seen before.”

Many chief executives said they were broadly in favor of reopening the economy — arguing that it was vital for people to be at work.

“We will need to open up, but it has to be done safely and properly,” said Jamie Dimon, chief executive of JPMorgan Chase. “And if we make mistakes along the way or if situations change, we should adapt and recalibrat­e.”

In the last week, companies and states have continued to adjust. Last week, California shut down indoor dining, bars and movie theaters it had previously allowed to open back up. And Louisiana ordered its bars closed.

And after Walmart announced that it would require all its customers to wear masks, several other major retailers, including Target, Walgreens and CVS, made similar announceme­nts.

“As individual­s, we have that responsibi­lity,” CVS’ chief executive Larry Merlo said last week. “My mask protects you and your mask protects me.”

Marriott has stopped short of requiring guests to wear masks in the public spaces of its hotels.

“We have not gone that far yet,” Sorenson said. “That doesn’t mean we won’t.”

Yet with the virus spreading widely and rapidly around the country, there is little hope that masks alone will allow for a return to business as usual anytime soon.

“Most CEOs today believe that until there is a more effective treatment or a vaccine, that work and life are not going togo back to normal ,” said Julie Sweet, chief executive of Accenture.

Newspapers in English

Newspapers from United States