‘There’s so many unknowns.’ Coronavirus could wreak havoc on State College economy
Businesses in Happy Valley are not immune from the coronavirus pandemic that has affected the economy in a myriad of ways, including stock market declines and supply chain backups.
Penn State made the decision March 11 to suspend all in-person classes until at least April 3 and strongly discouraged students from returning to campus to help prevent the spread of coronavirus, known as COVID-19.
That effectively removed a majority of the university’s about 46,000 student population and adds nearly one month to the annual, expected summer hiatus.
County residents should be prepared for a local recession, Penn State assistant teaching professor of economics James Tierney said Friday.
“Demand for stuff is going to go down, so revenues are going to definitely get hit hard,” Tierney said. “... We expect in a town like ours for overall people working and revenue to decline in the summer — businesses are taking that into account. But in a time like this where it’s not expected, that’s going to be very difficult for these places.”
The outbreak has the potential to affect the travel industry as harshly as 9/11 and the Great Recession, Happy Valley Adventure Bureau President and CEO Fritz Smith said.
“Depending on how long it drags out, it could actually be a little bit more challenging than those situations,” Smith said. “It’s a very unique situation. It’s different than anything we’ve encountered before.”
Smith expects fewer out-of-county visitors during March and April, due in part to the cancellation of all Penn State athletic competitions through at least the end of the academic year.
That includes the Nittany Lions’ annual Blue-White game, which Smith said generates about $1.4 million annually across all business sectors.
Local businesses and their employees could be faced with a “huge financial burden,” Hotel State College & Company Operations Director Curtis Shulman said.
The company runs The Corner Room, Spats at the Grill, Bill Pickle’s Tap Room, Zeno’s Pub, The Basement and Chumley’s.
“There’s so many unknowns and that can be terrifying,” Shulman said. “We’re trying to take everything from the approach of, ‘Less business and more what’s best for the community, our employees, the nation and making sure we’re being safe and doing our part to keep things calm and do what’s right.’ ”
Travels bans and school closings — while “prudent,” Smith said — have caused “a significant reduction in patronage” at many retail businesses.
“All of the places that depend on visitation are having a very significant level of drop in business and are faced with the prospect of that continuing for at least a couple more weeks,” Smith said. “... This could have some cascading effects that are very negative for the economy.”
Several businesses have taken precautions against the potential spread of COVID-19, such as increasing sanitation and operating with limited hours.
That includes Harper’s, a menswear store that has operated along East College Avenue for 94 years.
“I don’t know if State College has ever been smaller than it is right now,” owner Brian Cohen said. “We’re in a community where it revolves around Penn State University. Without Penn State University, nobody would really be here. The decisions they make impact everybody in business, especially in downtown.”
Other downtown businesses, including The Tavern Restaurant and Emporium Market, will temporarily close.
“We do not feel comfortable encouraging people to gather at a time when staying home seems to be the best measure,” Emporium Market wrote in a Facebook post.
This story was originally published March 15, 2020 at 1:00 AM.