WASHINGTON (The Hill) – The omicron variant poses a new threat to businesses that were already struggling to recover from the economic damage done by previous strains of the virus.
Gyms, concert venues, restaurants, airlines and other industries that have been battered by the pandemic are bracing for another COVID-19 wave that could curb demand and prompt renewed government restrictions.
Several states have detected cases of the omicron variant, which health experts say could be more contagious than the delta variant. Shortly after scientists in South Africa discovered the omicron variant, the country’s COVID-19 cases spiked dramatically.
Thanks to the prevalence of vaccines, U.S. officials don’t foresee a return to the early days of the pandemic, when entire sectors of the economy were forced to shut down. But experts still worry that many businesses that barely overcame the delta variant might not survive another outbreak.
“We’re all on our toes right now, thinking, ‘Oh God, what’s going to happen next,’” said Brett Ewer, head of government affairs at CrossFit. “The uncertainty really does not help, especially when so many gym owners are almost entirely bled out.”
Fitness facilities have taken a huge hit from customers staying home and COVID-19 restrictions that limit capacity or require masks. If omicron spreads rapidly, the wave would likely run into January and February, when gyms typically get a substantial revenue bump from short-lived New Year’s resolutions.
“This is going to be a critical time and if there is a new variant spreading around and there are new restrictions, that’s going to affect any chance that a small gym owner might have to try to stay viable,” Ewer said.
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By the end of the year, the pandemic will have forced 25 to 30 percent of fitness facilities to close permanently, according to the Community Gyms Coalition and the Global Health and Fitness Association, which on Thursday urged Congress to provide federal aid to gyms in light of the omicron threat.
“Aid is desperately needed to address the damage already done to these vulnerable businesses and to bolster them,” the groups wrote in a letter to congressional leaders.
Another COVID-19 outbreak could also spell trouble for restaurants, which lost customers in droves at the peak of the delta variant wave. Restaurant owners say that they still haven’t recovered, and their operations are continually being disrupted by the ongoing supply chain crunch, worker shortages and rising food prices.
The U.S. has lost more than 90,000 restaurants since the start of the pandemic. Restaurant groups are pushing Congress to authorize more federal aid after its $28.6 billion rescue fund quickly ran out of money, with two-thirds of restaurants that applied for aid ultimately missing out.
“Until Congress moves to replenish the Restaurant Revitalization Fund, every new variant that could impact how consumers use restaurants threatens to push thousands closer to closing permanently,” said Sean Kennedy, executive vice president of public affairs at the National Restaurant Association.
The delta-driven outbreak this summer also flattened demand for concerts and other in-person events. Venue operators, who successfully lobbied Congress for a $16 billion grant program that they say saved around 90 percent of the industry from going under, are gearing up for another wave. Upticks in cases prompt more customers to skip shows they previously booked, depriving operators of crucial income from the sale of food, drinks and merchandise.
“As humans, most of us crave certainty. In a pandemic, we don’t get that. We have to expect that things will change and we have to recognize that we have to adapt based on what’s new,” said Audrey Fix Schaefer, vice president of the board of directors at the National Independent Venue Association, which launched during the pandemic.
President Biden said Thursday that he plans to fight a winter COVID-19 wave with vaccines, booster shots and testing, not “shutdowns or lockdowns,” signaling that the federal government won’t require businesses to close their doors in the event of another outbreak.
The Biden administration this week, however, did enact tighter testing requirements on international travelers entering the country. That’s after it banned international travel from eight southern African nations located near the first detected omicron outbreak.
The U.S. Travel Association said that it hopes the new testing restrictions will be temporary, while Airlines for America, an airline industry trade group, said it supports the Biden administration’s framework for international travel.
The threat of the new variant is already impacting demand for international travel, with several business groups this week cancelling international events. Japan and Israel are among a few counties that are temporarily banning all foreign travelers from entering their borders.
Weak international travel has made it difficult for airlines to recover even as they enjoyed increased domestic demand. Airlines are coming off a hugely successful Thanksgiving weekend that drew the highest number of passengers since the start of the pandemic. But the omicron threat is already weakening domestic bookings, too.
“The recovery from COVID will never be a straight line,” United Airlines CEO Scott Kirby said in an interview with CNBC this week. “Omicron is almost certainly — it’s too early to really tell, but it’s going to certainly have a near-term impact on bookings. Bookings are going to be lower than they otherwise would have been.”