The coronavirus outbreak has been a massive disruptor to the lives of Americans, with repercussions we fail to grasp yet. As the current crisis impacts the worldwide economy, it is the often far-reaching chains of supply sustaining many industries that have been hurt the most. As personal and business travel has come almost to a halt, the food, manufacturing, retail, hospitality and airline industries have felt disruptions associated with the spread of COVID-19. With social distancing in place, the restaurant and tourism industries in particular will feel the impact of reduced business.
Massive Layoffs Threaten Macro and Micro Economies
The repercussions of the nationwide closures extend to the employees working in these businesses, as massive layoffs will soon start to take a toll on the unemployment figures. From March 1 to March 25, about 140 companies laid off almost 19,000 employees in California alone. Nationally, initial unemployment insurance claims reached 6.6 million for the week ending March 28, according to data reported by the U.S. Department of Labor.
COVID-19 Weighs Hard on Lifestyle Choices, Less So on Essential Businesses
How much of this turmoil is already visible in how Americans perceive the crisis? We’ve turned to the engine that drives most online searches and illustrates users’ behavior across the board. Google Trends allows you to see the topics people are — or aren’t — following, almost in real time, as reported by Google. It shows what’s trending based on the absolute volumes, and the relative spikes of those volumes, of searches as people browse on Google Search, Google News or YouTube.
Given the current state of affairs, we’ve looked at the changes in online interest in 5 of the industries that are most likely to suffer great changes following the outbreak of COVID-19.
5. Self Storage
1. The Hospitality Industry Hits a Slump
With most of the US States — and the world as a whole for that matter — on hold regarding travel for leisure, the hospitality industry is deeply impacted by the coronavirus outbreak. Usually, March is a prosperous time of the year with spring breakers and others filling up hotel rooms, but 2020 has taken an entirely different course. The stark difference becomes obvious when we compare online interest related to potential customers’ Google searches for March 2019 and those for the same time a year later. As it happens, online searches for hospitality-related terms in March 2020 have been on an abrupt downward slope.
While in the fourth week of March 2019 searches for “Booking.com” scored 90 points on the 0-100 Google Trends scale, the same phrase at the same time in 2020 saw a drastic drop to 33 points. As Americans are trying to stay put and avoid exposure to the virus, they are a lot less likely to travel and book hotel rooms. Searches for “cheap hotels” are a lot less prevalent this year – 44 points – compared to the same time in March 2019, and they registered a 20-point decrease on the Google trends scale. Moreover, interest in booking Airbnb accommodation has significantly dwindled as searches dropped to 36 points in March 2020 as opposed to the 74 points scored at the same time in 2019. It is possible that current Airbnb users are still using the service while being stranded as a result of the travel restrictions currently in place.
LA, NYC and Miami All Take Hard Hits as Spring Breakers Put Travel on Hold
As spring is usually a busy time for those taking a break from work or school, we wanted to see how three of the most popular destinations in the US fare in terms of piquing tourists’ interest. For this, we’ve looked at the most popular searches for cities in terms of flights and hotel occupancy.
As it happens, online interest for flights to Los Angeles shrank considerably in the fourth week of March 2020 compared to the same time a year ago.
While searches for the “flights to Los Angeles” term scored 45 points the previous year, this year’s searches took a sharp dive to 22 points in March 2020. This tremendous change is not surprising, given that Americans are a lot more reluctant to travel during the current outbreak. What did catch our eye was the amazing spike to 100 points in searches for flights to Los Angeles in the second week of March of this year. As the severity of the pandemic was starting to settle in and travel restrictions were about to be put into place, many residents of the City of Angels were rushing to airports to return home.
A similar downward pattern emerges regarding searches for hotels in the City of Angels. With travel and business activity starting to dwindle, so have hotel bookings — interest for this in the fourth week of March 2019 was at 81 points on Google Trends, only to drastically come down 30 points at the same point in time in 2020. Airbnb users are also less inclined to book a room through the service in 2020, with searches dropping to 22 points now, as opposed to the 93 points they were scoring a year before.
Miami is another city that steals the spotlight when it comes to staggering drops of interest in the hospitality industry.
As it happens, Americans are a lot less likely to book a flight to Miami in March 2020 as opposed to spring last year. Not surprisingly, online activity reflects this situation, with searches for “flights to Miami” having now dropped from 31 points in March of 2019 to a very low level of 14 points on the Google Trends scale.
Not only are Americans flying less to Miami, but they are also not rushing to book a hotel in Magic City at this time of the year, as most of them are either cancelling bookings or are simply postponing that get-away they intended to go on. Google Trends exposes this steep shift, as online interest for the term scored 72 points the previous year while 2020 saw a deep dive to 24 points. While Miami sees its ranks of tourists dwindle, interest for Airbnb bookings is also going down. As it turns out, interest for Airbnb ranked 50 on the Google Trends scale in March 2019, but current circumstances have brought it down to 20 points. In one week, Airbnb has lost more than half of their customers, while the hotel industry in the Floridian city has been deprived of more than two thirds of its customers base, according to online interest for the term.
With mounting concerns over the current pandemic, flying into New York City has become less prevalent, as online interest for the term dwindled drastically in the fourth week of March.
Americans seemed to have been a lot more invested in traveling to the City That Never Sleeps in March 2019 – with 44 points on the Google Trends scale – but fears over COVID-19 have now brought the score down to 28 at around the same time in March 2020.
In a similar vein, searches for hotels in New York followed a comparable route as the usually high interest for this topic (71 points in the last week of March 2019) was particularly low at the same time this year (29 points last week). Searches for Airbnb accommodation follow an almost identical pattern as we notice a 46-point drop in interest when comparing this time of the year with its corresponding time in the previous one, with 76 points on the Google Trends scale in March 2019 and just 30 points a year later. As with Los Angeles and Miami, Americans are hesitant to book either hotel rooms or Airbnb accommodation in The Big Apple, preferring to stay safe in their homes.
Hotel Owners Are Scrambling to Stay Afloat
Not unlike other businesses, the hotel industry is experiencing the ripples of the coronavirus outbreak. With cancellation rates staying high for weeks in a row, and travel restrictions in place, hotel owners are being impacted.
While the industry initially assumed the outbreak would mostly affect operations in Asia, the largest hospitality companies have been coming to grips with the unlikelihood of meeting their first-quarter and full-year projections. As cancellations kept piling up, Ryman Hospitality Properties Inc. pulled its forecast for 2020. However, the company claims to have enough bookings for the rest of the year. Similarly, Pebblebrook Hotel Trust states that it is likely that the company will fall behind its first-quarter and full-year projections as a result of mounting cancellations.
Other notable names in the industry, such as Marriott International Inc., claimed that this situation will subside within a few weeks. However, their shares took a 24% dive, very similar to the experiences of competitors such as Hilton and Hyatt Hotels Corp.
In the wake of the massive cancellation wave, a large number of hospitality businesses will likely lay off many of their employees to reduce costs in the face of lower short-term revenue. Additionally, they are cutting rates by offering discounts to either keep their bookings or to encourage new ones. However, some hotel owners advise against this policy. They argue that pricing down is an easy route, but it will eventually make it more difficult to reinstate the regular, higher rates. Instead, they suggest instituting a no-penalty cancelation policy and attractive promotions concentrated on things like free breakfasts, free parking, gas coupons and special occasions.
2. Retail Industry Slowly Comes to a Quasi Halt
While most of the retailers are putting the lock on their door, those selling essentials such as medicine, food and cleaning supplies are open for business as they see a growing demand. Walmart and Costco are just a couple of the larger retailers who have felt required to adjust their work timetables in order to restock shelves and to keep up the sanitation schedule.
As the pandemic continues, it’s not surprising that Americans are focusing more on the larger retailers. Compared to the fourth week of March in 2019, online interest for Walmart went from 41 points to 63 points at the same time in 2020. While the widespread nature of the virus hasn’t stopped many Americans from walking into the store, a large number of them prefer to peruse the shelves online. As it turns out, the phrase “Walmart online shopping” saw a 100-point spike towards end of March 2020, a huge increase from the 12 points it scored the year before. Interest for grocery pickup from Walmart has also drastically surged to a full 100-point score, while the fourth week of March 2019 saw only 42 points associated with that online search.
While online shopping-related interest has skyrocketed during this period, Americans are turning away from applying for Walmart credit cards as they are less likely to make costly purchases or to take on additional financial burdens in this unstable climate. While online interest for this term hovered around 62 points in the fourth week of March 2019, we now see a drop to 20 points for the same point in time in 2020.
Similarly to Walmart, online interest for Costco has also been soaring lately as people prefer to buy in bulk more than ever. One shopping trip there can achieve a lot – you can simultaneously get basic supplies and safely practice social distancing. This year, during the last week of March, searches for the wholesale retailer generated 82 points – an impressive surge from the 51 points it scored around the same time in March 2019. Similarly, online searches for Sam’s Club, a wholesale retailer associated with Walmart, doubled in March 2020 when they jumped to 82 points, as opposed to the meager 41-point score registered in the previous year.
Cooking is Picking Up Steam with Americans
While most restaurants either are closed or are closing, Americans are turning away from takeout in favor of home cooked meals. With more time at home, they can finally try their hand at cooking a lot more than they did prior to the outbreak. The online interest for “cooking” stood at around 31 points a year ago but jumped to 61 points in the last week of March 2020. We see a similar trend for the term “recipe” – online searches jumped from an index of 42 points in March last year to a complete 100 score this time of the year.
3. The Moving Industry is Still on the Move
While most industries have known a slowdown associated with social distancing and travel restrictions, the moving industry has also felt some of the repercussions of this general slowdown – though not that deep for now as moving is usually planned two months in advance. Interest for moving companies in the fourth week of March 2019 was quantified at 75 points on Google Trends, but has now seen a decrease to 63 points. Online interest for the term “relocation” indicates a similar situation: while a year ago, in March, the term generated 84 points, it has now fallen to 70 points. This trend shows that Americans are still moving, but they are not quite as eager to do so as they were a year before. Their behavior is indicative of mild caution in the face of the current outbreak.
Moving Search Trends in the Most Sought-After Destinations in the US
In order to understand how this pandemic is affecting the moving industry across the US, we looked into the most common moving destinations in March 2019 and tried to investigate how those same destinations fared a year later.
In order to do this, we identified the cities that yielded the most searched terms related to moving on Google. Then we used Google Trends to express those searches in a scoring system that compares how these destinations compared a year later, when COVID-19 hit the country.
Looking at the same time period in both 2019 and 2020, we noticed that online searches for moving to most of the selected cities show dramatic decreases year-over-year on Google Trends. Let’s look at some of the cities we investigated, to see how they each fared when it comes to gaining new residents.
As one of the most popular cities to move to, San Francisco stood at 21 points on the Google trends scale in the fourth week of March 2019. A year later, it’s at 22 points, which means that, surprisingly, people show the same level of interest as last year. It might seem that Americans are dismissing the worries surrounding the virus and are continuing to move to San Fran regardless of what is happening in other parts if the country. However, looking at the partial data from the last week of March 2020, we notice an abrupt drop to 0. This means that Americans are no longer taking to the road to relocate to San Francisco as they heed the authorities’ advice to shelter in place.
New York City
As one of America’s largest cities, New York City doesn’t seem to lose its appeal for newcomers. While online searches for the Big Apple reached 65 points in the fourth week of March 2019, interest in moving there jumped to 75 points around the same time this year. The growth pattern seems to persist in the last week of March 2020, according to provisional results.
Online searches for moving to Miami scored 43 points on the Google Trends scale in the fourth week of March 2019. It might seem that interest in relocating to Magic City has remained stable when gauging online interest for moving there a year later – at 42 points. However, according to partial data provided at the beginning of the fifth week, a new trend emerges: Online searches suddenly plummet to 0. It looks as though people are now a lot more cautious about making radical changes to their lives, and that includes moving to another city.
A year ago, in the fourth week of March 2019, online interest for moving to Los Angeles generated a score 67, but this year In March we see the score going down to 54 points. This downward trend is in line with current events: Americans are less likely to move, but it seems that the City of Angels still attracts residents, even though their number has dwindled considerably in the face of the pandemic.
A sought-after moving destination in March 2019, with a 53-point score on Google Trends, Seattle’s popularity in online searches dropped vertiginously to 27 points in the fourth week of March 2020. As is the case with many other desirable moving destinations, they are seeing less newcomers, as Americans weigh in their options and prefer to stay put, at least while officials advise them to do so.
The city that ran with the slogan “Every Day Is an Opening Day” saw plenty of online interest in terms of moving there in March 2019, as scores during the month’s fourth week showed (70 points). A year later, searches on the same topic took a steep dive in the same time period in 2020, as they reached a value of 22 points.
Interestingly, the following week online interest for moving to Atlanta peaked at 100, according to partial results. This spike may be related to an influx of new jobs being added to the area. As it turns out, a series of companies, including Medline Industries, Kerry Group, Sonic Automotive and Macy’s, are investing in the area, adding over 1,000 jobs to the local economy, according to a recent press release.
In the fourth week of March 2019, Chicago maintained its status as one of the most attractive cities to move to, as online searches concerning this topic demonstrated (41 points on the Google Trends scale). In line with many other popular moving destinations, online interest has radically shrunk, to a score of 16 at the present time, indicating that moving house is less of a priority in the face of potential health hazards posed by the spreading of the virus. This descending pattern is confirmed by partial data provided during the fifth week of March 2020, when online interest dropped down to 0. As the outbreak is sweeping the nation, Americans are putting caution in the driver’s seat.
While in 2019, a pretty significant portion of Americans aspired to become Denverites, as online searches for moving there surged to 99 points in the fourth week of March 2019, the opposite of that tendency became the norm in the fourth week of March 2020. Internet searches for moving there jumped down to 31 points, congruent with the current national trend concerning moving. As it happens, Denver is another city that saw its online interest as a moving destination plummet to 0 points the following week, as more and more Americans remain in their current locations in order to reduce the spreading of COVID-19.
Ever bustling with activity and lights, Las Vegas continued to attract newcomers in 2019, and in the fourth week of March online interest for moving there was trending at 29 points. A year later, searches for the same topic plunged to 11 points on the Google Trends scale. We see the same effect across the country: Moving rates have either slowed down or they indicate that people have postponed moving completely, as health concerns gain more and more ground with Americans.
Another Californian hotspot for new residents, online searches for San Diego in the fourth week of March 2019 generated 54 points on the Google Trends scale, only to go down to 39 points for the same time period in 2020. Even though the moving rate seems to have hit a snag now, a lot of Americans are still willing to relocate to the Californian city despite the pandemic
Our findings indicating that some Americans are still persisting in their determination to move are also backed up by recent findings by RENTCafé, a nationwide apartment listing service, which conducted a survey on moving during COVID-19. They concluded that a whopping 56 % of Americans are willing to move if they would be able to find an apartment.
Moving Companies Do Their Share to Best Support Customers
Besides looking at the online behavior of consumers, we also wanted to get an insight into the moving industry from the service providers themselves. To that end, we interviewed Sonja Pullaro, Director of Customer Experience from Mayflower, a household name in the interstate moving industry.
1. What is the general sentiment in the moving industry regarding the impact of the COVID-19 outbreak on your business?
In these unprecedented times, the Mayflower agency network continues to operate as an essential service provider. While we have felt the impact, Mayflower educated the network using guidance published by the CDC and WHO and will continue to communicate regularly and effectively regarding COVID-19. Together, we created a plan for a safe moving experience.
2. Did you notice a slowdown in moving as compared to the pre-coronavirus period?
The entire industry will be impacted economically from COVID-19.
3. Are you operating under a different schedule?
Our corporate employees have enacted our business continuity plan and are working from home. Because transportation services are considered an “essential” or other exempt services in most jurisdictions at the current time, Mayflower agents will continue to offer services in accordance with the guidelines and best practices set in place by the CDC.
4. How do you go about getting an in-home estimate now that social distancing is encouraged? Can you get over the phone estimates and are they reliable?
We offer virtual surveys all year round, and we have great success in their reliability. During this time, we are requiring virtual survey estimates take place in all identified hot spot states, and they are encouraged in all areas at this time.
5. For obvious health concerns, what is your current policy on packing? Will you continue to have your employees do the packing as usual?
The health and wellbeing of our customers as well as our drivers, loaders and packers is our top priority. With that in mind, we want to continue to offer full service moving to our customers. Mayflower has educated our moving network regarding Coronavirus and created a plan for a safe moving experience. Our teams have been advised to take extra precautions (wear gloves, protective masks, maintain six feet distance, etc.), utilize hygiene best practices and not to work if they are not feeling well.
6. Have current state-to-state travel restrictions encumbered your daily operations? What about international shipping? Have the current flight restrictions interfered with your business?
Transportation solution companies are considered essential service providers. We have been following each state restrictions closely, and we communicate to our network daily with updates.
7. What advice do you have for your customers as they prepare for moving during this time?
We are encouraging our customers to do what makes them most comfortable. It’s possible to delay the start of a move if the customer does not feel comfortable or is not feeling well.
Mayflower has educated our moving network regarding Coronavirus and created a plan for a safe moving experience. For instance, we offer several options for providing a pre-move survey. We can schedule an appointment to send someone to your home. Mayflower also offers virtual surveys (similar to a video chat or FaceTime), which are fast, convenient and efficient. In order to provide the most accurate estimate, a visual survey (in person or through video technology) should be performed. You can work closely with your local agency on what works best for your situation. We can assure you Mayflower is taking extra precautions and has educated personnel regarding COVID-19.
Moreover, Mayflower launched Handled, a company that offers relocation services. For this time, Handled offers to manage moving for displaced college students and offers free storage with end-of-summer delivery. “As an increasing number of schools face campus closures, we simplify and de-stress moves off campus – quickly, affordably and worry-free. The bottom line? We’re here to help.” says Seth Waite, President and CEO of Handled.
4. The Housing Market Sees a Marked Slowdown
March is often the first month of actual growth for the housing market. It’s when interest in buying or renting comes back to life, heading for a summer peak. Well, not this year. Even if rent growth hasn’t actually taken a hit in March – rents are still up 2.9% year-over-year, according to Yardi Matrix – the effects of the outbreak are likely to start showing when looking back at April figures.
The apartment rental scene doesn’t seem to be painting a very optimistic picture. In fact, usually at this time of the year, people would increasingly start to move and rent apartments, but we have noticed a pattern that says otherwise for March 2020.
Searches for “apartments for rent” seem to consistently score lower throughout this month, with an abrupt drop to 56 points on the Google Trends scale in the fourth week of March this year. This incredibly low score compared to the March 2019 value of 93 speaks volumes. Americans are consistently shying away from signing new leases as the outbreak continues to sweep the nation and individual incomes become insecure, to say the least. Not only are Google searches on this topic expressing renters’ reluctance to sign a new lease, but the same findings are backed up by RENTCafé‘s findings about decreasing searching traffic.
The effects of the current slowdown are expected to impact the industry for the next three to six months. It is very likely that for a short period, owners and operators will face some difficulties collecting rents, as a result of lowered employment rates. Additionally, most local governments suspended evictions in order to limit the spread of the coronavirus and to protect citizens as they might struggle financially during this time, as is the case with New York and Hawaii, for example.
Similarly, the effects of the slowdown are beginning to show as interest in homes for sale decreases.
This is especially true for the fourth week of March, which saw a steep downward trend (68 points), a much lower score compared to the same period in 2019 (94 points). Americans are most likely putting their home buying plans on hold as the economy and their incomes are subject to uncertainty at this time. As it turns out, the same downward trend in terms of home purchasing is also noted by Point2Homes, a real estate listings portal powered by Yardi, which recorded a traffic drop of 35% on their website as a direct result of the outbreak.
5. The Self Storage Sector Suffers a Setback Too, Though Less Evident
The self storage industry is also likely to be impacted by the coronavirus outbreak. Finding a storage unit close to home has been consistently important for Americans over the last year. But while searches for this term were quite popular this time last year, at about 81 on Google’s Trends scale, the fourth week of March 2020 saw the score dropping to 61 points.
This change is in line with the social distancing timeline, as Americans limit their out-of-home activities. Searches for “self storage” in the last week of March 2019 demonstrate that the term is less popular with 54 points, and at the same time this year we see a slight decrease to 47 points. This minor decline is probably related to Americans limiting their out-of-home activities, which invariably spill over into reducing additional financial commitments.
As the entire economy slows down, occupancy will most likely remain flat for the time being as demand will likely come to a standstill in response to that. “If the coronavirus begins to impact housing and people are forced to move out of their homes and apartments, then you could see an increase in occupancy, but most landlords and banks are offering at least a 3 month buffer for renters affected by Coronavirus”, according to Chris Nebezahl, Institutional Research Manager for Yardi Matrix.
Much of the organic growth naturally associated with this time of the year will come to a halt as people will become less inclined to rent self storage for surplus items. However, the industry does a good job at responding to people’s needs when downsizing or when relocating, so much of the demand associated with these motivations will balance the absence of new customers drawn in by wealth.
“Street rates and occupancy rates will likely remain flat for the time being”, says Chris Nebezahl. This is partly due to the outbreak but it’s also a natural evolution of the market as it struggles to deal with the flood of new units coming online. This is mostly visible in annual street rate changes for self storage. Street rates for a standard self storage unit averaged $115 in January 2020, a decrease of -4.2% from 2019 when it had recorded the highest value in the last five years. Confronted with rising inventory levels, NYC saw its street rates going down -1.8% from 2019, reaching $167 in 2020.
$2 Trillion Stimulus and Other Steps Made to Reduce Pressure on Americans’ Lives
In an effort to support the halted economy and a proportion of the population that is left without an income, the Senate has agreed to award a stimulus package worth $2 trillion dollars to benefit workers, the unemployed, contractors and the self-employed. It is reported that adults would receive a check of up to $1,200 and an additional $500 for each qualifying child. Additionally, the government is also considering fiscal relief measures in order to minimize the economic impact caused by this health crisis. Consequently, the 2019 income tax filing deadline has been extended from April 15 to July 15 this year, according to an announcement made by the IRS.
As a state of emergency has been declared in many states, prices have been restricted, using what is known as price gouging laws. That means that certain goods and services cannot go over a certain price cap, with a few exceptions. This law applies to things such as transportation, residential rents and self storage, but also to common goods including food and medicine.
While most industries, if not all, will suffer some setbacks as the pandemic progresses, it is difficult to anticipate the global magnitude of how this unexpected challenge will change the face of our economy. As of today, we can only try to follow guidelines and work together to rebuild businesses.