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Tuesday, Feb 7, 2023

Coronavirus Effect

As the number of confirmed cases and deaths from the Novel Coronavirus continues to climb, businesses throughout the San Fernando Valley region are grappling with how to navigate the travel bans, production stoppages, work slowdowns and other effects from the outbreak. At press time, about 938 coronavirus cases had been confirmed in the United States, where 29 had died. That included three deaths in California. Statistics are relative. The Center for Disease Control and Prevention has estimated that at least 12,000 people have died from influenza between Oct. 1 through Feb. 1, and suggested that the number may be as high as 30,000. According to National Safety Council data, in 2019, an estimated 38,800 people lost their lives to car crashes — a far grimmer death toll than that of coronavirus in the U.S. to date. However, that hasn’t stopped concern about the virus from impacting industry. In the worst stock market drop since the Great Recession, March 9 saw the Dow Jones Industrial Average plummet more than 2,000 points, or 7 percent, with nearly all Valley companies caught in the downward momentum. Among the Valley’s largest cap companies, Walt Disney Co. in Burbank fell $10.92, or 9.5 percent, while Amgen Inc. in Thousand Oaks declined $12.28 or 5.8 percent. Large percentage losers in the region included California Resources Inc. in Santa Clarita with a decline $1.59 or 28 percent; Dine Brands Global Inc. in Glendale with a loss of $12.65 or 17 percent; and Asgn Inc. in Calabasas, down $7.12 or 15.7 percent. The next day the Dow regained more than 1,200 points, indicating the see-saw nature of the disease’s impact. On March 11, the World Health Organization declared coronavirus a pandemic. Hospitality hit hard Businesses in the Valley have tried to roll with the punches surrounding the outbreak, particularly in the vulnerable hospitality and tourism sectors. In Universal City, Sun Hill Properties Inc. owner of the Hilton Los Angeles/Universal City, has felt the impact in operations and customer count. “From inception of notification about the virus more than three weeks ago, we initiated our contingency protocol of high focus to protect guests and team members against any infection,” President Mark Davis said in an email to the Business Journal. “We also recognize this is the influenza season as well and we find these measures reduce impact on our team members.” The hotel’s protocol includes use of 70 percent alcohol solution for disinfecting surfaces and touch points; cleaning all touch surfaces in check-out rooms to prepare for the next guest; cleaning all touch surfaces in public areas; changing utensils on buffet often as well as wiping down all surfaces with solution; and removing placemats from dining tables so surfaces can be disinfected more efficiently. “(We’re) seeing spotty, moderate cancellations, largely from Asia-based travel,” Davis said. “(We’re) seeing some moderate slowdown concerns of drive traffic.” Ultimately, the hotel will employ common sense in addressing the issue as long as it continues. “We will continue to be vigilant and proactive with appropriate escalations in our safety protocol with updated information from health officials,” Davis said. “Hilton Corporate is very proactive in communicating with hotels on best practices in all situations impacting the travelers.” On March 9, the State Department warned U.S. travelers, especially those with health conditions, not to take cruise vacations because of an increased risk of contracting coronavirus. Valencia-based Princess Cruise Lines, has seen its share of coronavirus drama, including a quarantine of its Diamond Princess ship in Japan and the emergency docking of Grand Princess in Oakland after people on board tested positive. As of March 10, Diamond Princess Voyage cancellations in Japan have been extended through April 20; Majestic Princess Voyage cancellations in Taiwan are set through April 28; and Sapphire Princess Voyage cancellations in Shanghai, Hong Kong and Australia reach all the way to late October. “With the ongoing uncertainty of travel restrictions and port closures in Asia impacting our cruise operations in China and Southeast Asia, we have made the decision to cancel and modify additional voyages on Sapphire Princess in 2020,” a statement on the Princess Cruise website said. Shares of Princess parent Carnival Cruise Corp. & plc in Miami, dropped 50 percent between Feb. 1, when the virus was first detected on the Diamond Princess, and March 11, when it closed at $21.78. On the website for Viking River Cruises, the Woodland Hills-based company posted a statement addressing the situation. “We continue our enhanced health screening procedures for all guests and staff,” the statement read. “This includes: Completing a health care questionnaire before boarding our vessels; all persons who have traveled from or through South Korea, Iran, China, including Hong Kong and Macau, and any municipality in Italy subject to lockdown (quarantine) measures by the Italian government, within 14 days of beginning their trip with Viking, will not be permitted to embark any Viking ship.” Viking also said that it will conduct temperature checks of all guests and employees prior to embarkation. “No one exhibiting symptoms of respiratory illness similar to those of COVID-19 are to be permitted to board,” the statement said. “We continue to reiterate the importance of individual hygiene, sanitizing and washing of hands.” A temporary Viking Risk Free Booking Policy will allow guests to change or cancel their cruise date until 24 hours before their planned departure. The policy covers all Viking reservations made by April 3o. Calabasas-based AmaWaterways, another river cruise company, could not be reached for comment at press time. Retail and nonprofits On March 10, Stuart Waldman, president of Van Nuys-based Valley Industry & Commerce Association emailed members that the business advocacy organization would not hold its State Officeholders Dinner on March 13 because of the virus. The guest list included politicians from Sacramento. “After much consultation and discussion, we have decided that it is best to postpone the dinner until a future date,” Waldman wrote. Unlike the hospitality or entertainment sectors, retailers feel the impact because many of its inventory suppliers are based in China. Burbank-based online vape retailer ProVape said in a statement that ‘coronavirus is creating a global problem in the vape industry as manufacturers of vaping products will not be able to produce and deliver before coils, pods, and other vape hardware.” The statement concluded that wholesale vape suppliers must wait for the coronavirus crisis to end before they will get a steady supply of product. “The vape industry is bound to feel the impact of the coronavirus outbreak sooner than expected,” a company spokesperson said in an email. “With the continuing crisis, the Chinese government is torn between restarting the economy and containing the virus from spreading by announcing massive quarantine of millions of people. There seems to be no rush in putting the economy back on track. Many Chinese companies have opted not to resume normal operations despite the encouragement of local authorities.” Entertainment chaos The major Hollywood entertainment studios have suffered massive repercussions from the virus. Burbank-based Walt Disney Co. closed its theme parks in Shanghai, Hong Kong and Tokyo, but later partially reopened in Shanghai. Additionally, a Disney+ Europe launch event in London was scrapped; and events in China promoting “Mulan,” a live-action version of Disney’s 1998 China-set animated film, have been canceled. On March 10, Disney announced that it had suspended production on its Marvel series for Disney+, “The Falcon and the Winter Soldier,” which was scheduled to shoot in Prague. Two days later, Universal postponed the release of the ninth movie of its “Fast and Furious” franchise by a year until April 2021. More important, the Chinese government has closed 10,000 movie theaters with 70,000 screens to prevent transmission of the virus, putting a dent in movie revenue. In South Korea, a Korea Film Commission official said in a statement: “The situation now is much worse than what we’ve seen during the outbreak of (Middle East respiratory syndrome coronavirus) MERS in 2015. The audience dropped to more than 40 percent then, but there was no such thing as theater closures and the market revived after about a month. That’s not going to be the case with coronavirus. It’s very unusual to see a daily admission fall below 100,000. But that is happening now, and the outlook is unpredictable.” Already, the virus has resulted in a loss of in excess of $5 billion from diminished box office revenue, according to a March 2 story in the Hollywood Reporter. Eventually, the slowdown in theatrical distribution will mean a constriction of production in Los Angeles and the Valley. Larry Namer, whose Woodland Hills-based company LJN Media produces unscripted television and news programming for the Chinese market, told the Business Journal that the virus has affected his business. “Our staff in the Beijing office has been working from home for the past month,” Namer said. “We were doing several travel-related shows, which we have put on hold for now. ‘Explore China’ was to be for U.S. audiences and designed to bring tourism to China. ‘Explore the World’ was in Mandarin and (in that program), we visit countries of interest to Chinese audiences and encourage them to visit those (places).” On a personal note, Namer added that he had to postpone and delay travel and planned meetings to his company’s China office. “With the travel bans and general health concerns, inbound or outbound tourism is not a welcome subject right now,” he said.

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.

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