Photo Credit: Business Insider
It has been a little more than four months since I started wearing a mask when leaving the house.
At first, I was an oddity and the only signs that something major was going wrong in Florida was the shortage of flour, toilet paper and cleaning supplies. It did not have a Hurricane feel – it was something else. Somebody, a couple of days ago called it a “Chernobyl” feeling.
Photo Credit: ABC News
The theme parks closed down and traffic was sparse, but what I noticed the most was the absence of airplane noise. I live near the approach to OIA and the constant background music of planes landing and taking off is something you get used to and your mind ignores it. The sudden absence of this background noise was uncomfortable and it made me more aware of the crisis playing out on the news.
In the beginning, everybody, including myself, considered the situation finite. Unfortunately, too many people I know believed it was a hoax and also did not wear masks and the result was predictable – today Florida has become one of the largest outbreaks in the Nation.
I speak regularly with my clients and in the beginning, they just wanted to know when it would be over and how they could make it through. Over the last few weeks it has dawned on them that their business model would have to be radically changed if they wanted a chance to survive the next year or more. I have always considered and pushed “resilience” as the most important survival tool for a business. I lead my companies through both the financial crisis in 2008 and the earlier 9/11 catastrophe and consequently I have been influenced by Nassim Taleb’s writings on risk. I also read Michael Lewis’s book “The Fifth Risk” which now looks very prescient considering how our government has failed to deal with the virus in a rational way.
Photo Credit: AIChE
A couple of weeks ago, a friend who is a Senior Chef for a large high-end hotel group told me that they did not expect to have a business banquet until the end of 2021.
This weekend the local news reported that Disney did not expect to be back to pre-pandemic guest levels until 2025.
Today, the business news reported that Delta did not expect normal passenger counts until 2025.
Reading between the lines, it tells me that Orlando will be economically devastated for a lot longer than 2025. Most of the small businesses dependent on the theme parks and tourists will not survive. Even if they pivot their business, the “Demand” base is gone. In 2019, Orlando reached 75 Million visitors which translates to 205,480 persons per day. They are gone and will be gone for a long time. Tourist Tax revenue is down by 97% in April alone. Residents are not in a position to make up the drop in demand, especially since a large percentage is employed by the Theme Parks or by companies that depend on the various parks.
Photo Credit: Tesmanian
While the big companies will survive, albeit on a reduced scale, most of the independent businesses, which includes a lot of the hotels, will close. While Central Florida has made an effort to diversify it’s economic base, it is not enough. Healthcare, Simulation companies and Financial companies will hang on or even grow. On the Space Coast – the unqualified success of SpaceX and other space related companies will continue, but Orlando is only a bedroom community for that area.
If you were a business in the tourist or food business before the pandemic, you will only survive if either : a) You shrink your company by 90% or b) You rapidly get a new client base in another geographic area.
On the other hand, this is an opportunity for you to re-think and find out what your business can be good at.