Pandemic hurts Wisconsin hotels, restaurants and manufacturers, but grocers, builders are busy -- for now (2024)

Tom Daykin|Milwaukee Journal Sentinel

The COVID-19 pandemic is the event of a lifetime for businesses throughout the world, including those in Wisconsin.

Many industries are facing a devastating economic toll as quarantines and other social distancing measures force them to close, or drastically scale back their operations.

But some are staying busy because of spiking demand for their products and services, or because they can still operate safely.

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Meanwhile, Gov. Tony Evers' new stay at home order, issued Tuesday, is requiring morebusinesses, deemed non-essential, to close.

The impact on state employment already has been devastating: as of Tuesday, more than 101,400 new unemployment claims hadbeen filed in Wisconsin in just the past nine days. Justweeks ago, employers were saying that it was difficult to fill positions in a very tight labor market.

Here's a roundup of how key sectors of Wisconsin's economyare faring.

HOTELS

Some hotels, such as the Potawatomi Hotel attached to the tribal casino in Milwaukee's Menomonee Valley, have closed.

That hotel, 1721 W. Canal St., completed an expansion in August. That project gave it 500 rooms, making it the city's second-largest hotel.

Others are open, but are seeing a huge drop in revenue as both business and leisure travelers cancel their trips.

The current climate is the worst that industry consultant Greg Hanis has seen during his 45 years in the business.

"The tunnel is dark and there is no light at the end," said Hanis, president of Hospitality Marketers International Inc., which includes a New Berlin office.

"The longer this lasts, the fewer hotels there will be that will re-open," he said.

It's affecting local investors who own hotels, as well as larger publicly traded companies such asMilwaukee-based hotel and cinema operatorMarcus Corp.

Marcus Corp. has closed all of its hotel bars and restaurants, said Greg Marcus, president and chief executive officer.

Also, the company announced Tuesday itis temporarily closing some of its hotels, including theHilton Milwaukee City Center and Saint Kate – The Arts Hotel, both in downtown Milwaukee, as well as theGrand Geneva Resort & Spa in Lake Geneva.

Wisconsin will lose around 18,200 of its 41,300 hotel jobs because of the pandemic, according to a projection from the American Hotel and Lodging Association.

DEVELOPMENT

Before Evers' order, some of the Milwaukee area's largest developments remained under construction, including the future Renaissance Milwaukee West Hotel, 2300 N. Mayfair Road, Wauwatosa; downtown Milwaukee's BMO Tower office building, 790 N. Water St.; Milwaukee Symphony Orchestra's Bradley Symphony Center, 212 W. Wisconsin Ave., and the conversion of Glendale's Bayshore mall, 5900 N. Port Washington Road, into a mix of stores, restaurants, offices and housing.

The "stay safe at home" order allows construction trades to continue operating.

HOME SALES

Real estate agents are facing unusual challenges when it comes to marketing homes, and closing on their sales.

"Open houses right now are really risky," saidAndrew Hunt,Marquette University Center for Real Estate director.

Some real estate agents might instead focus on marketing homes with photos, video slideshowsor even owner-produced video tours, he said.

If sellers arereluctant to stageopen houses, or even allowprivate tours, real estate agents should change their listing contracts to reflect that reality.

That's according toJennifer Lindsley, staff attorney and director of training at theWisconsin Realtors Association.

The pandemic also is causing delays in completingpending sales of homes, Lindsley said.

Among the factorsare a lack of available appraisers and home inspectors, she said, as well as shutdowns ofcounty register of deeds offices.

The bottom line:most experts expecta slowdown in home sales despite low mortgage interest rates andstrong demand from buyers,Hunt said.

AIRLINES

The airline industry has been clobbered by the pandemicand the resulting cancellation of travel plans.

In Wisconsin, the pandemic arrived just as spring break travel was hitting its stride. Spring break is the busiest season of the year at Milwaukee Mitchell International, even outpacing Thanksgiving and Christmas in terms of number of travelers moving through the airport.

A check of parking areas at Mitchell shows Super Saver parking — $8 a day —at 6%full on Tuesday. For at least the past two years, that parking option was at or near capacity —96% or more full —during spring break.

Southwest Airlines is the market share leader at Mitchell, carrying more than 40%of the passengers at the airport.

In a filing with securities regulators on March 16,the airline said its business has been devastated by COVID-19.

The airline said it has experienced a number of days recently with “negative bookings” which means it had more trip cancellations than it had new flight reservations.

Southwest said it plans to reduce its published flight schedule, which will reduce capacity by at least 20% between April 14 and June 5, 2020.Southwest has also initiated a hiring freeze.

Delta Air Lines is No. 2 in market share at Mitchell, carrying about 25% of the passengers at the airport.

Delta said it is making “significant capacity reductions with a 70% systemwide pullback planned until demand starts to recover,” according to the filing.

The airline also plans to ground half its fleet —600 aircraft —until demand picks up.

GROCERY STORES

Nearly every grocery store in Wisconsin has been inundated with business and is hiring for all sorts of positions to help meet the increased demand that is occurring as a result of so many people being stuck at home and restaurants only open to takeout or delivery options.

The state's largest supermarket operator, Roundy's Supermarkets Inc., is hiring 2,500 people throughout Wisconsin to deal with a surge in demand.

The pace at which groceries are being sold has been described as "mind-boggling" and "unprecedented."

Grocery distribution and procurement staffs are working around the clock to keep stores supplied.

Stores have also cut back their hours to clean and restock and have also set aside hours for folks to shop who are most vulnerable to becoming seriously ill as a result of COVID-19.

Since the beginning of March, shares of Kroger are up about 7%.Kroger operates the Pick 'n Save, Metro Market and Copps stores in Wisconsin.

MANUFACTURERS

Cases of coronavirus have been confirmed at three Wisconsin manufacturers: Snap-on, Harley-Davidson and Mercury Marine.

Kenosha-based Snap-on, a manufacturer of mechanics’ tools, said an employee at its Milwaukee plant tested positive for COVID-19 but did not show symptoms while at work.

Snap-on said it took immediate action to identify all employees who had direct contact with the infected worker, sent them home, and asked them to self-quarantine.

“All associates requiring quarantine will receive their full pay and benefits during the period of isolation,” company spokesman Samuel Bottum said in a statement.

The company brought in a cleaning service to disinfect the infected employee’s work area and said it informed everyone in the plant of what happened. The plant had already increased, and will continue with, elevated levels of sanitizing, according to Bottum.

Harley-Davidson said it was suspending production at its U.S. manufacturing plants until March 29 after one of its Menomonee Falls employees tested positive for the coronavirus.

The facilities temporarily suspending production are Pilgrim Road Powertrain Operations in Menomonee Falls, Tomahawk Operations in Tomahawk, and York Vehicle Operations in Pennsylvania, according to the company.

The Menomonee Falls facility closed following the positive COVID-19 test, the company said. The other plants closed by the evening.

All of Harley's company-sponsored events have been canceled until April.

HEALTH CARE

Paradoxically, even health care is being hit hard by the economic crisis. But seeing patients who don't need immediate medical attention conflicts with the public health priority of social distancing.

Dental clinics are closed. So, too,are some physician practices. And most health systems have canceled elective procedures.

Dental Associates, which has about 12 clinics in Wisconsin, for example,is closed until April 6 but is providing emergency care by appointment.

Advanced Pain Management, which has more than 20 clinics in Wisconsin, has closed its clinicsand is implementing alternative options for treating patients.And GI Associates, which has clinics and surgery centers throughout southeastern Wisconsin, has postponed non-urgent procedures for patients.

“We are taking it day by day like everyone else," said Jennifer Hardin, communications director for the physician practice.

It still is seeing patients who need immediatecare and its physicians are available for individual patients. The practicealso is working to set up virtual visits.

Froedtert Health, Aurora Health Care, Ascension Wisconsinand ThedaCare are among the health systems that have canceled elective surgeries and procedures.

ProHealth Care said last week that it was limiting elective procedures for two weeks but that the decision would be left up to physicians and their patients.

The goal is to protect staff and patients while conserving supplies, such as gowns and masks. But the decision will affectsurgeons, anesthesiologists, operating room techs and other staff.

RETAIL

Stores across the country are closing physical locations and encouraging online sales. Milwaukee-area malls Mayfair and Southridge and Brookfield Square, all closed lastweek. Menomonee Falls-based Kohl's Corp. closed all of its more than 1,100 retail stores nationwide.

“Short term, the impact will be predictably grim, as billions of lost revenues immediately hit vulnerable retail, food service and entertainment sectors,"Neil Stern of the business management consulting firm McMillanDoolittle wrote about retail in the age of coronavirus.

"Long term, we have simply no idea. It will largely depend on the length and severity of the outbreak."

With"the uncertainty related to the COVID-19 impact on its business, including the duration and demand for the merchandise it sells," Kohl's is not longer giving estimates for earnings this quarter or all of 2020. Kohl's plans a "significant reduction in expenses and inventory."The company has around 122,000 part- and full-time employees.

Kohl's stock was $49.11 per share Jan. 2. Shares closed Tuesday at $16.63.

Dodgeville-based Lands’ End has closed its two dozen retail stores through March 29. The retail employees will be paid for the hours they were scheduled to work in the stores during that time, Lands’ End said in a news release. The company released its fiscal 2019 earnings on March 17 with a positive outlook.But in that same release, Lands’ End said it had already seen a negative impact on customer demand because of concerns about coronavirus.

Lands' End stock was $15.60 a share back on Jan. 2. Tuesday, it closed at $5.33.

Stern predicts that online retail will grow even more as people stay home.

"Retail, which had been on a decade-long growth spree, will likely show contraction for the first time since the recession," he wrote."And this is the relatively positive scenario with a quick return to normalcy."

RESTAURANTS

An industry that already struggles with paper thin margins, restaurants and bars are feeling the first blow of the coronavirus pandemic.

All bars and restaurants were shut down by the state on March 17.

Many have closed their doors completely. Bartolotta Restaurants, which operates many of Milwaukee's fine dining establishments, shut down its operation entirely. The group employs 950 people.Punch Bowl Social, a chain of entertainment and restaurant venues, laid off all 91 of its Milwaukee location'semployees.

To try to keep money coming in the door, many restaurants and bars are selling carryout.The Journal Sentinel has found dozens ofbars,restaurants and other food service businessesin the Milwaukee area that are shifting to to-go orders or curbside pickup.

Lowlands Group, which has eight restaurants in the area,tried to offer delivery and takeout after the forced shut down. But after a couple of days the company decided that remaining open for takeout was not worth it.

"This has been a tough decision between continuing to pay our staff — who wants to remain working as long as possible — and shutting down to ensure their safety, and the safety of the community," the group continued.

"We hope the proposed national stimulus aid package is passed quickly and targets those most in need, including hourly and tipped service industry workers. Our entire industry will need this if it is to come out of the other side resembling anything like it was a week ago."

Many breweries like Eagle Park Brewing and 1840 Brewing are open for to-go sales only.

Some breweries closed entirely. Those establishments encourage buying their beer in stores that remain open. Buying gift cards is encouraged with some establishments, like Third Space Brewing, offering a discount. For the next two weeks, Third Space is selling gift cards at 25% off so a $50 card costs $37.50.

An earlier version of this article saidG-I Associates is closing itsendoscopy centers and offices in southeastern Wisconsin. Those facilities aren't closing.

This story was written with reports from Journal Sentinel business reporters Tom Daykin, Joe Taschler, Rick Barrett, Guy Bouton and Sarah Hauer.

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