Consumers will be cautious in returning to old habits to differing degrees, and each demographic will respond to a restart differently, based on risk profile and other factors. Considering the reported rates of severe complications by age group, older guests are likely to delay heading out of their homes into public with any regularity. Families, however, may trade caution against the need for convenience, value, social events and entertainment. Young adults will likely return to normal even before the industry is ready for them to do so.
High-end, status-based concepts might rebound reasonably well. Typically, these types of places have limited seating already and are usually less impacted by recessionary trends overall. And, as destination locations, they do not rely on neighboring businesses to drive traffic.
Convenience and value concepts should rebound quite quickly. Once people are back to work, they will return to their usual routines. Depending where you live, expect your local Starbucks or Dunkin’ Donuts back up and running full speed soon. McDonald’s, Sonic, Burger King and others that rely on drive-thru, quick-service and have a large value component to their offerings should also restart quickly.
Vacation, tourism, event, and convention business-related locations should see the same type of contraction as with the 9/11 attacks and the 2008 financial crisis, as employers and associations eliminate events and families delay trips for either health or economic reasons. Unfortunately, that may mean an entire year of missed profits for seasonal destinations.
As professional leagues look into playing for TV audiences or severely limiting attendance at specific event sites, and conferences are cancelled or moved online, how will that impact revenues at locations tied to sporting, event or convention sites? The Consumer Electronics Show, for example, regularly draws crowds of 175,000 attendees and means millions of dollars for Las Vegas restaurants. Even with 2.9 million square feet of exhibition space, that’s probably not enough to keep “appropriate social distance.”