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Some Maryland businesses are preparing to reopen. But don’t expect the economy to bounce back quickly.

Kyle Algaze is optimistic an announcement could come soon allowing him to invite some customers back into dining rooms at his four Iron Rooster restaurants scattered across the Baltimore region.

But he is less certain whether that will mean much of a pickup in business as coronavirus risks and fears persist.

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Even if the state allows restaurants, retailers and other small businesses to reopen, likely limiting customer traffic to half or a quarter of normal at first, he says that’s no guarantee many people will come. Algaze hopes eventually to rehire many of his 270 former staff members, but knows it won’t happen at once.

“It’ll be incremental to start,” the restaurateur said.

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Something of an economic rebound is set to begin after Maryland Gov. Larry Hogan on Wednesday OK’d reopening parks and golf courses, ended restrictions on recreational boating, and allowed hospitals to resume non-emergency surgeries and procedures.

And a week-long flattening of COVID-19 hospitalizations means a comprehensive three-phase business reopening plan could go into effect soon, the governor said.

But business leaders and economists warned that won’t guarantee a quick rebound in employment or sales. Fears of another wave of coronavirus infections and worries about the economy could be slower to ease than the state’s restrictions on businesses.

“Businesses need legal authority to reopen. Just as importantly, they need consumers to come back to necessitate the rehiring that we would like to see,” said Jeremy Schwartz, an associate professor of economics at Loyola University Maryland’s Sellinger School of Business.

In the nearly two months since business closures began across the state, the coronavirus has infected more than 31,500 and killed more than 1,500 people in Maryland. The shutdowns mean those numbers are smaller than they might have been, but the restrictions also have put nearly one in five working Marylanders on unemployment. And they have led to forecasts of dire budget shortfalls for state and local governments.

Governor Larry Hogan talked about what it would take to lift the stay-at-home order and move to a road to recovery.

Under the Hogan administration’s reopening plan, after about 14 days of declining numbers of COVID-19 hospitalizations, some of the first activities to resume include curbside retail pickups, small outdoor fitness classes and car washes. The threshold could be reached later this month if hospitalizations remain on a downward trend.

Then, if social distancing rules are followed and hospitalizations continue to decline, the second phase includes limited opening of restaurants and bars and and an increase to the current 10-person cap on social gatherings.

While expressing hope that the pandemic may have hit a peak in Maryland, Hogan at the same time has warned that some businesses likely face new challenges even when the state eventually reaches the third and final phase of an economic reopening plan. It includes reopening entertainment venues and high-capacity bars, but only once there is an approved coronavirus vaccine or effective treatment. Those are likely months away.

“It’s really devastating,” the Republican governor said Wednesday. “Some industries might not ever come back. Some might evolve and have to do things differently.”

Workers at Bert Jabin's Yacht Yard move a sailboat into the water. Governor Larry Hogan's announcement that certain recreational activities, like boating and fishing, will be allowed has brought more people out to take advantage of the warmer weather.
Workers at Bert Jabin's Yacht Yard move a sailboat into the water. Governor Larry Hogan's announcement that certain recreational activities, like boating and fishing, will be allowed has brought more people out to take advantage of the warmer weather.(Paul W. Gillespie/Capital Gazette)

The recovery began Thursday morning, when golf courses, tennis courts and beaches around the state were allowed to reopen. That is encouraging for businesses such as Tim Smith’s Fin Hunter Charters, which plans to resume fishing trips May 16, the first day anglers are allowed to catch and keep up to two Chesapeake Bay rockfish.

Smith said he has gotten a fair amount of cancellations from people worried about the virus, but still has plenty of bookings from others eager to get outside. Anyone coming aboard will be given a mask and a socially distant spot on his 40-foot fishing boat.

“People just want to get out of the house, man,” Smith said. “We’re happy to take the folks who want to go.”

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While outdoor recreation represents a relatively small slice of the state’s economy, such steps toward resuming business as usual could have echoing impacts, said Daraius Irani, chief economist for the Regional Economic Studies Institute at Towson University.

For example, boaters will once again buy fuel, sandwiches and drinks from businesses that have been indirectly harmed by the statewide closures and stay-at-home order, Irani said. When restaurant business starts picking up, there will once again be demand for linens and laundry service and other business-to-business supplies and services.

Loyola’s Schwartz said he expects a bigger boost could come from Hogan’s order allowing health care providers to resume procedures considered medically necessary but not time-sensitive, including surgeries such as joint replacements.

Though many medical workers have been essential throughout the pandemic, the health care industry has nonetheless been reeling financially, furloughing some employees and cutting pay for doctors and other medical staff. A Hogan order canceled elective procedures, including joint replacements and other surgeries considered medically necessary but not time-sensitive. And many patients have avoided care for other ailments out of fear of exposure to the virus.

Hospitals in the state expect to lose an estimated $1 billion in billings for the three months from April through June, according to the Maryland Hospital Association. The return to offering care that has been prohibited could ease the financial pressure and allow hospitals to bring more people back to work, though no one expects that will happen overnight.

Recovery could be even slower in the restaurant and hospitality industries, which employed close to one in 10 people in Maryland before the pandemic. Experts expect many restaurants may close for good, and it could take months or longer for others to see business return to something resembling normal.

Workers in those businesses are not expected to return in large numbers until the second phase of the state’s reopening plan. The industry, however, is pushing to allow outdoor table service to resume in the first phase.

Perhaps even more so than in other industries, the success of food service businesses depends heavily on consumer confidence, said Marshall Weston, president of the Restaurant Association of Maryland. It helps that these businesses already were focused on food safety, though they may want to make their regular safety practices more obvious to customers, he said.

Changes in dining rooms likely will include barriers between booths, masked servers and single-use condiment packets in place of ketchup and mustard bottles, Weston said.

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Similar adjustments are being planned at the state’s casinos. Clear plastic barriers, masks and temperature screenings are expected to become ubiquitous, and facilities likely will be allowed to admit only half as many patrons as normal, at most. That could mean fewer than normal employees at work on casino floors, but larger than usual cleaning staffs, said Gordon Medenica, director of the Maryland Lottery and Gaming Control Agency.

There is still no timeline for when casinos might reopen — Medenica guessed it could happen in the second phase of reopening, but perhaps not until the third. But he said work is ongoing across the industry to prepare.

“I think if, for example, we were told casinos could open in four weeks, we would be ready,” he said.

Retailers are pushing to get back to work with curbside service immediately, which has so far only been possible for those shops that have an online presence. Many Main Street-type businesses have remained shut down because they can’t afford shipping or websites, said Cailey Locklair, president of the Maryland Retailers Association.

“Right now, there needs to be curbside,” Locklair said. “You can do the whole thing contactless.”

Conditions for reopening of stores are expected to include limiting numbers of employees working per shift, requiring social distancing among customers and workers, limiting customers in waiting areas and making hand sanitizer available for workers and customers.

The industry also is seeking more liability protections, fearing blame in cases of employees or customers contracting COVID-19. And they’d like to see a hub for businesses to get personal protective equipment and uniform detailed policies guiding business operations across the state.

Generally, small businesses are “anxious,” said Mike O’Halloran, state director for the National Federation of Independent Businesses.

“They are anxious to get back to work, to get Marylanders back to work and to get back to normal as quickly but as safely as possible,” he said.

But the anxiety on the other side of the cash register could be the bigger problem. Schwartz said that two months ago, he had hoped the economy could bounce back quickly. That hope has faded as the economic pain has spread.

“People are nervous to spend, and they’re going to be nervous to resume the normal activities they did in the past,” he said. “We’re headed for some significant rough times in the years to come.”

That leaves business owners like Eric Maynard with no way to forecast the future. His company Event Tech would normally be busy putting on graduation ceremonies across the Baltimore region this time of year, which typically accounts for a significant chunk of his annual revenue.

The company’s 15 full-time employees are working limited hours with help from the federal Paycheck Protection Program, which offers small business loans that are forgiven if all employees are kept on the payroll for eight weeks. They are exploring ideas for some virtual events, or ones designed to keep physical space between attendees, he said.

But once the federal money runs out in late June, Maynard said he has no expectation for what the events business will look like, or when it will return to anything close to “normal.”

“We’re way far away from that,” he said.

Baltimore Sun reporter Lorraine Mirabella contributed to this article.

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