Things That Will Change

March 25, 2020 • #

This is a weird time.

The COVID-19 pandemic is the biggest global event that’s happened in my lifetime. It hasn’t impacted me personally that much (yet), but the financial and public health implications are clearly already disastrous, and bound to get worse.

Most concerning, though, is how little we know today about what’s in store for the rest of 2020 and beyond.

I don’t use this outlet to make predictions, and I’m generally not a fan of trying to call shots on uncertainties. But as an experiment, let’s set down some open-ended questions to revisit in 6 months to see what’s different.

What will be different by mid-September?

Restaurants and bars

  • Will the restaurant market return to how it was before? If it rebounds, how does the renewed landscape look different?
  • Does the expansion of the food delivery market change the kinds of restaurants that open? Not all food types are equally compelling when jammed in a box. Does that influence what’s available?
  • We were already Shipt customers before all of this for grocery delivery. Is COVID-19 the stressor that shifts more grocery business from brick-and-mortar to delivery?

Hotels

  • Airbnb already impacted the hotel business over the last 10 years. But as we return to normal, what changes? Do people start putting extra priority on personal space?
  • Airbnb has been, generally speaking, cheaper than traditional hotels over the years, but does this balance shift?

Airlines

  • Seems like a fairly irreplaceable business, but does air travel return to pre-COVID level? Do people reduce non-essential travel?

Cruises

  • Already an expendable industry, but not a small one ($45bn annually). After COVID, how does it ever return to normal
  • Where would this spending go if it doesn’t? What form of recreation, travel, entertainment picks up that spending?

Businesses

  • Businesses have gone dormant, people laid off, reduced hours, high unemployment. When things start to rebuild, what returns?
  • For those of us that have gone to remote work with minimal disruption, how many companies return to an office full time?
  • If even 20% of these remote-capable companies decide either “we don’t need an office” or “we could downsize to a smaller one,” what impact does it have on commercial real estate?

Schools

  • Schools around the world closed pretty quickly, most moving to remote learning. Universities mostly have some infrastructure in place now for online coursework, even though most traditional ones are still in-person heavy. Given that there was already a trend (albeit small) toward distance learning in higher-ed, and assuming at least moderate success in moving to remote over the next several months, are colleges ever the same again?
  • At elementary and high school levels, the move to remote Zoom-based classes seems shakier. Our daughter is still in pre-school, so we aren’t that impacted (plus the first week of this quarantine spanned spring break, with no school anyway). But I’ve heard from others mixed experiences with their kids trying to “homeschool” while they work from home. When do the kids return to a normal school life? Will it be back to normal by the fall and start of the 2020 school year?

Entertainment

  • The feature film industry could be done-for. With theaters all closed for a while, what happens to them after? Will they re-open? And if so, how long does it take to reconstitute a business in which many will likely have permanently closed and laid off their staff?
  • Film studios are now forced to release new movies online, jumping the theatrical release completely and dropping movies directly on iTunes for $20. What will these new “virtual box office” results look like compared to their predicted receipts if they’d been released traditionally? If the earnings are still attractively high, will this new release model be permanent?
  • What happens to film and television production over the next 6 months? Do we end up with a lull in new content similar to the writers strike from 2007?