Florida Matters: The Future of Tampa International Airport - And Small Businesses
When almost everybody is staying at home, that obviously doesn't bode well for the state's tourism industry. And for all those tourists flying into some of the nation's biggest tourist destinations -- well, they're not. Some estimates have airport traffic down to a trickle. The not-so-friendly skies has had a ripple effect on businesses that rely on airports for their livelihoods. Other restrictions are being slowly lifted, so we'll start to get a feel for how businesses are going to recover.
Gov. Ron DeSantis tapped several task forces to look at how and when we should be going back to business as normal. One of the business leaders who was part of the Re-Open Florida Task Force is Tampa International Airport CEO Joe Lopano.
First, we speak with Lopano, then with Balaji Padmanabhan, the Anderson Professor of Global Management, the Director of the Center for Analytics & Creativity and a professor in the Information Systems and Decision Sciences Department at the University of South Florida Muma College of Business.
So tell me about the impact is having on the businesses there are many businesses open. I'd imagine a few restaurants are doing takeout services. Anything else still open there?
Yes, at each airside we have left two businesses open -- one food and beverage and one retail. And at the main terminal, we still have two restaurants open -- Wendy's and also the Chick-fil-A are open.
I'd imagine since most of the concessionaires there are chains of bigger businesses, they're probably more apt to come roaring back when business gets back to normal rather than some of the smaller mom and pop places we see elsewhere.
Yeah, well, the thing is that we've introduced a lot of local restaurant concepts and local businesses into the airport and they they are not national chains. And they probably don't have the kinds of capitalization that let's say TGI Fridays, would have had so it's a little bit different. It's about 50% national brands and 50% local brands.
You have businesses that were doing so good that you actually opened the terminals that you have to take the trains to that you really have to have a ticket to get on them. So you were opening them up on a kind of a day-by-day basis. And that was going pretty well. How do you think that's going to be affected in the future?
It was going great. I mean, we started out allowing, I think it was 100 people, and we increased that and allowed it every day. And it was going great. I mean, people actually just like hanging out at the airport watching people go through the terminals and having a good lunch or drink or whatever a date, perhaps. And I think that that will probably come back just like I believe most things that we were used to before we'll come back and but I don't think it's going to be anytime soon.
There have been reports of some of the airlines have been cutting back. I read that Southwest Airlines, for instance, is cutting pay and benefits and suspended more than half their flights and planned to drop more in the coming weeks. They're the largest airline at Tampa International. How much is this going to affect other businesses at the airport?
The effect is terrible. Actually, it affects everybody. It affects the shared-ride Uber world, taxi world, rental car world, hotel world. Everything that the state of Florida relies on, has been affected in a very, very negative way. So we hope to keep our employees in place, we hope to keep our team in place. And as we come back, we're going to need people to run the airport because, you know, an airport is not a place that you can close off certain sections and and save workers or save money. And it's an all-or-nothing kind of proposition. So we need to be ready for when we come back. We are seeing anecdotally some increases in passengers and we believe that, you know, over a long period of time, people are going to either discover therapeutics or understand more about social distancing and how to avoid this thing. And they'll begin to try to live a semi-normal life using good safety precautions.
When I think of social distancing, probably being inside an airline is the last place I'd really want to be you're in a middle tube eight miles high and breathing recirculated air. And heaven forbid if you're in the middle seat. That's a really difficult place to social distance, how is that going to be handled?
So that really is something that the airlines are working on right now. And what we're trying to do at the airport, is we're launching something called TPA Ready. And what we're doing is we're trying to in the lane that we're in, which is the airport lane, we're trying to make it as safe, clean and secure as possible. And then when the airlines figure out what they want to do, it'll be a seamless transition through the airport off of the airplane. And hopefully everyone can feel confident and safe. So some of the things that we've put in place that we benchmarked others, quite frankly, to learn what the best practices are, including companies like Walmart or Universal Studios. And we also benchmark our European airport colleagues who are now opening before us, but we never closed, but they're starting to reopen their economies. We've learned a lot of things.
I mean, for an example, all of our employees are required to wear masks anytime they're in the public area, and we've encouraged our tenants and concessionaires to do the same thing. And we're encouraging our customers who come out to fly to wear masks when they come out for travel. In addition to that, we've put down various markers on the floors to keep people distance by at least six feet. We've changed our security checkpoint lines to keep people further separated. We've installed plastic shields at the ticket counters and gate counters to help protect the workers from any spread of the germ. We've very much increased our cleaning protocols, especially focus on high touch areas, such as railings, elevator buttons, and our shuttle trains as well keep them nice and clean. So we're trying everything we can to make the customer feel safe. And make sure that we're doing everything that an airport can do. Now what airlines do, will be up to them. But we're focused on our part of the journey.
Are you able to do some projects there that you wouldn't normally be able to do with normal traffic this time of year?
We're taking advantage of this slow period, with very few cars on the road, very few passengers in the terminals. To expedite our projects. As an example, our ticket counter renovation project was going to take a certain amount of time because we had to work around passengers, we've been able to accelerate that significantly, and that saves us money. And it's also the work will be done, when the passengers come back. They won't have to see all of that pardon our dust stuff.
The other one is our roadway project. As you know, we're building Express Lanes for the roadway. And without having so many cars on the road, we've been able to actually close the blue rivals drive so that the workers can work 24/7, and that's again saving us money and time.
And the other thing, we've had projects that were awarded, that could have been stopped, especially to small local businesses, but we said, Now hold on. If this money is supposed to be used to keep jobs going, then we want to continue these projects, and make sure that we keep these local contractors busy. Because when the time comes that this thing stops, we got to have all these guys ready, because we'll come back at some point.
As we transition back to normal, Florida Matters looked for some analysis on the unique challenges Tampa Bay businesses, non-profits and the economy will be facing as we transition from stay-at-home orders to heading back to work again.
So we got some insight with Balaji Padmanabhan, the Anderson Professor of Global Management, the Director of the Center for Analytics & Creativity and a professor in the Information Systems and Decision Sciences Department at the University of South Florida Muma College of Business.
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What are some of the challenges Tampa Bay businesses will be facing as we transition from stay-at-home orders to heading back to work again?
You know, I haven’t seen exact numbers across all areas. But I think across the board almost all industries as very high double digit declines. This includes in obviously retail restaurants hospitality, in particularly the worst hit. But even sectors like healthcare where people are choosing to put off elective procedures and so on physicians and practices are seeing declines of 50 to 70%. In terms of treatments and patients, and that’s very substantial.
On Monday, the governor allowed the reopening of certain businesses 25 percent for places like restaurants, museums, libraries, that sort of thing. Do you think that is enough to save a lot of these businesses? Or are people just kind of still very wary about going out right now, either wearing a mask or not wearing a mask?
A couple of things. One is that this is phase one, right? So and then the idea is that in phase one, you’re starting at 25% And then you have to try to get things going so that people know you’re open, you can service people safely. And then we also monitor to make sure that this is not creating huge problems. So I think it’s going to be a challenge for how businesses are trying to adhere to that requirement, they will have to plan very, very carefully. But it is very, very much a test. You also have the human element, right, which, which I think is something we all worry about. Because there are you might say, We are open, but there are some people who will probably like a certain number of people who will never go out step, right. We’ll wait until they’re absolutely confident. There’ll be those who are ready to go out like three weeks ago, right. So in a day would likely be the first ones to be out there. So we don’t know how many of each type of consumers are out there. Most likely the ones will be out there first. You know, but in healthcare, it’s the most needy case. But if it’s the optional ones, I think we’ll probably be those who are slightly more risk seeking, right, who are willing to in their own minds. They’ve been raised weeks ago to do this.
So it sounds like what you’re saying is that the types will go skydiving and jumping off cliffs, that sort of thing. They’re the first ones are gonna go out without a mask, right?
You know, and some of us have seen that already, right, your essential purchases and so on. When you’ve gone to these stores, you’ll see a lot of people have been wearing masks, and which is very nice to see. But you also see those who don’t. And there are always people who are ready and eager and, you know, a little more risk seeking.
Now some of the figures I’ve been seeing are pretty dire. Some reports say as many as 40% of restaurants are going to be closed permanently because of this. I don’t imagine that might be even a little harsher in the Tampa Bay area. And then Florida in general, because we’re such a service and tourist oriented economy. What do you think about those figures? Are they maybe too conservative?
No, I don’t think they’re conservative at all, because retail has in many cases been a low margin business. And, you know, even at hundred percent capacity, many of these restaurants are not making millions of dollars by staying open, right? So for them to be profitable in a 25% environment is obviously not at all easy, which is why I think a two month hiatus or a three month hiatus will destroy most of these establishments. And, you know, I think to the extent that some of them can go down and come back up, you know, and start a new with some capital, the hope is that many of them will get support from the governments to some extent to do exactly that.
Consumer confidence is a huge factor here in whether these businesses really come back to life. They have to have the customers are also not in the same business. And a lot of the fears we’ve been reading about are perhaps a second wave in the pandemic. I’m wondering if these businesses start opening now and we’re hit with more stay at home orders. Do you think that’s going to be really a fatal blow to a lot of businesses if that happens?
I’m sure that they’re all thinking about it as we speak here, right? This is something that’s going on to their heads every single day, which is why I think it’s extremely important for them and us collectively to make sure that this succeeds. And this means in phase one businesses reopening exactly as suggested, I think there’s a temptation to go about 25% you’re not just hurting yourself, you’re hurting the entire system. I don’t think anybody wants to do this. But it says something you have to be aware of, that even if you have the capacity or have the crowds, the last thing you want to be is on the news for having people in whom you’re not supposed to be. But if we do things the right way, and I think with expanded testing, that’s going to happen in phase one. The state is trying to build up testing capacity and test a lot more than they’ve ever tested. They mean the expectation is that if there is another hotspot, it will be shut down in a very local way. So we don’t have to damage everybody. I’m pretty optimistic that if we do things the right way, we will not have massive shutdowns again. I mean, you can never rule out the possibility. We all know that. But I think the onus is on all of us to do the right things in phase one as the state wants us.
Florida is such a tourism driven economy, theme parks are shot, they’re not going to reopen for a long time. Most smaller restaurants, like you said, a lot of them are going to go out of business, the long term sounds pretty dismal. I’ve been reading predictions maybe that this will be even worse than the Great Recession? Hopefully it’s not. What do you think about those warning signs?
Well, I take the opposite, very happily here. And I’m very optimistic and positive about Florida long-term. If you look at the numbers in our state per capita, the death rates and the others are far lower than what people have feared. I think if you look at states in the US, we are number 24th, worst right center in the middle. And if you look at the deaths per capita in states that highest is about 98. You know, the lowest is zero. and Florida is about 6.4. Then if you look at the county level, and if you look at the, you know, most populated counties, and then 1600 and 70 most populated counties, Hillsborough County is probably around 100 out of 164. Right. So there are 100 other counties in the US worse off than us and deaths per capita. So overall, I think in terms of numbers in terms of deaths per hundred thousand per capita, we haven’t done that badly at all. And I think that that is slowly going to make its way across the nation. And they look back at Florida when the dust settles, assuming that, you know, our reopening is done carefully. And things don’t spike for us if we do this carelessly, which I hope we don’t. But I do think we’ll come out of this very favorably. The treatments to materialize by the end of the year. And vaccines do happen in the next six months or so. Assuming those scenarios pan out. I see absolutely no reason why a year from now. What not just be the same, but much better off than we were ever before as a state?
All right, you must be a member of the optimist society!
Absolutely, you know, I’m very positive about I think the state has been going in a very, very good direction for the last 10 years or so after the previous session, we have to shake off our Florida man image, which I think has been hurting us unfairly in outside. But I think we’ve been doing it, you know, one bit at a time collectively, in terms of how the economy has become diversified, how new businesses are coming to the state and the kinds of innovation that’s happening in Florida. I think there are lots of very, very good stories to tell.
Anything else you’d like to mention that I haven’t neglected to ask you?
No, I think businesses you know, in the reopening, you know, I would say in phase one. treated as phase one, plan a lot. And here collect data and customer service. So the planning is super critical. The planning would mean, you know what it is to be 25% don’t exceed that. Again, you don’t want to be on the front page of the news. And I think people who violate that are essentially making the state look bad, right, the governor and the other, it’s not just your other businesses, but plan a lot. And I think good planning is going to help here. Just as an extreme, I’m not saying that this is possible, if you think a restaurant has to operate at 25% capacity, but they’re able to turn tables at double the speed because they set the expectation though that look, you know, dinner, the study minutes, not one hour, and you shrink the menu so that the cost of operating is outside in half. There’s no reason why 25% cannot be 100%. Right if you do the math on these numbers, so that’s what sometimes with planning can get you the apps like, you know, wait while and others that can let you open table that can also help you text customers instead of having them wait in a queue. So do those types of things. And if you’re large organizations like providers and hospitals pay a lot of attention to contact and the surfaces that people you know touch and so on so that you have a plan in place for keeping those sanitized, not. So good planning is the best strategy collectively for us to do this but collect a lot of data during this time like as you said, you know, the skydivers and the others who show up, you know, you want to know who they are right? So so make sure that you collect a lot of data about the people who are walking into your doors now, because you may need them again very soon, and it’s good to know who they are. So I think data collection at this point is going to play pays tremendous dividends as well along with good customer service thanking people to come in at these times. These are common sense things that I think if done well will help them sort of establish great customer loyalty and will be great for them in the long run.
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