The shelter-in-place government order amid the coronavirus/COVID-19 pandemic has decimated Santa Barbara’s hotel, travel, restaurant and retail industries.
In the past month, hotel occupancies have dropped 85 percent. Airport travel has plummeted 95 percent. Restaurant jobs have plunged 80 percent. An estimated 30 percent of restaurants that closed might never reopen.
Those were just some of the brutal statistics released Thursday afternoon at the UCSB Economic Forecast Project webinar. The 90-minute panel discussion featuring economists, bankers and hospitality officials described a bleak situation where no one is spared from financial, emotional and mental effects.
“The impact of this virus has been and will continue to be unprecedented for the tourism industry,” said Kathy Janega-Dykes, president and CEO of Visit Santa Barbara. “Realistically, it is going to take several years for a full recovery.”
Peter Rupert, executive director of the Economic Forecast Project was equally blunt: “When I say unprecedented, I really mean unprecedented.”
Rupert and Janega-Dykes joined George Leis, president and COO of Montecito Bank & Trust, Roger Gilbert, the manager of government guaranteed lending for the bank, and Sherry Villanueva, owner of the Lark Restaurant and founder of ACME Hospitality.
Dr. Lynn Fitzgibbons, chair of the Infection Diseases Division for Cottage Health, also spoke and expressed both optimism and concern about the health situation.
She said she’s humbled by how seriously the community has taken the social distancing order because it has kept the spread of the virus down, but there is another side to that effort.
“Our community is different than Manhattan,” Fitzgibbons said. “Most of our community has not seen this virus yet, and so once our social connections and our interactions restart, inevitably, some of us who are not immune to this virus are going to probably bump into this virus. Some of us will get symptoms.”
Thursday’s discussion comes at a time of growing frustration with the current shelter-in-place and social distancing orders. Gov. Gavin Newsom and public health officials have placed public health and safety as the No. 1 priority as they look to get a handle on the deadly virus that has killed about 35,000 people in the United States, about 820 people in California and three people in Santa Barbara County.
The pandemic and subsequent closure orders have thrashed the economy and brought industries to their knees. Several thousand people have lost their jobs in Santa Barbara County. About 22 million people across the United States have filed unemployment claims, and about 2.8 million in California have filed for unemployment in the past four weeks.
Santa Barbara’s police chief has stated that there has been an uptick in crime activity in recent weeks and that there’s heightened concern about the mental health and social impacts of forced isolation.
“If people during a recession lose their jobs, are unemployed for a long period of time, go into periods of despair, there are increases in opioid addiction, suicides, etc.,” Rupert said. “These things can be stopped.”
Newsom has outlined a six-step plan for reopening the state that includes widespread testing, social distancing plans for schools and businesses should they reopen, and developing hospital bed capacity to handle a surge in patients and maintain normal hospital care.
Amid all of that, people who have not lost their jobs are trying to survive.
Rupert showed a slide during the webinar that stated, according to one estimate from the Economic Policy Institute, that about 23,000 will lose their private, nongovernment jobs in Santa Barbara County by June because of the coronvirus, and another 10,904 in the leisure and hospitality industry.
Villanueva said there are about 941 restaurants in Santa Barbara County that employ about 18,000 people. Those workers earn about $103 million in wages.
“The lack of wages for all of those folks is a really big impact on the local economy here,” she said.
She also addressed the challenges of applying for the Small Business Administration’s Payment Protection Plan loans. The federal government on Wednesday night halted the program because it had reached its limit. The program states that it will forgive the loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
But in California, restaurants were ordered to close for dine-in services.
“It is a very challenging situation to have to bring an entire staff of people back so that this loan can pay for payroll, when I still have to have a closed restaurant,” Villanueva said. “The fear is that those employees would just have to be laid off again when the PPP program runs out.”
Leis from Montecito Bank & Trust said the bank distributed $100 million worth of Small Business Administration Payment Protection Plan loans to 200 clients. Still, it wasn’t enough.
“We have clients waiting,” Leis said. “My heart goes out to those small businesses. This is an absolute lifeline.”