How Business Was Battered by Irma

How Business Was Battered by Irma

- in World Biz
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The real pain will come in the next few months, as Irma causes a psychological ripple effect through the state that may discourage families from planning trips, said Dennis Speigel, president of International Theme Park Services, a consulting firm in Cincinnati.

“Orlando lives, breathes, thrives on tourists, and the theme parks are the drivers of that,” he said. “This is a really hard loss — hundreds of millions of dollars in aggregate for the industry down there.”

Last year, 68 million tourists visited Orlando, and more than 70 million were expected this year, Mr. Speigel said. But much of the supporting infrastructure of hotels and restaurants has lost power, access to transit and regular deliveries of supplies.

“These trips are planned six to eight months in advance, with the average family of four spending somewhere in the $7,000 to $8,000 range,” he said. “If you’ve lost a day, you’ve lost that day and you can’t get it back.”

Roughly 100 sites shut down across the state in advance of the storm, including the Kennedy Space Center Visitor Complex and the Vizcaya Museum and Gardens, according to the Florida Attractions Association.

Universal Orlando, which includes the Wizarding World of Harry Potter, closed Saturday evening but kept its hotels operational and at capacity.

SeaWorld Orlando and Busch Gardens Tampa Bay shut even earlier on Saturday, and offered to reschedule or refund vacation packages and individual tickets without cancellation or change fees. Both of those parks were planning to stay closed Tuesday.

Disney Springs and Walt Disney World Resort, which includes the Magic Kingdom, Epcot, Hollywood Studios and Animal Kingdom parks, projected a Tuesday reopening.

The Magic Kingdom has shut down only four other times in its nearly 46-year history — each time for an incoming hurricane. Tickets start at $99 for a single day.

Disney’s dozens of resort hotels in the state remained open during the storm. The company canceled several events and offered guests several refund or ticket exchange options.

— Tiffany Hsu

A monitor at Miami International Airport became a list of cancellations Friday. More than 9,000 flights had been cancelled at airports in the path of Hurricane Irma by Monday afternoon.

Credit
Wilfredo Lee/Associated Press

Airlines

Air traffic in Florida ground to a halt over the weekend, with more than 9,000 flights canceled at airports in Irma’s path by Monday afternoon.

Major air carriers hustled to clear their equipment and employees out of affected areas before the storm hit. Delta Air Lines might have benefited from the timing of the hurricane: The airline has been operating a scaled-back schedule since Labor Day, an adjustment it makes at the end of each summer in response to declining demand — giving it more flexibility.

“We were able to put larger aircraft or add additional flights into the market to allow people to travel out ahead of the storm,” said Anthony Black, a spokesman for Delta.

Airlines were gradually returning to their normal flight schedules, though many planes remained grounded as the storm churned north.

Although industry analysts said it was too soon to pin down Irma’s cost, airlines factor extreme weather into their planning.

“It’s the cost of doing business as a global airline and working in these kinds of environments,” said Ross Feinstein, a spokesman for American Airlines. “We know there can be hurricanes in Florida.”

Operations were returning to normal as weather conditions improved and airports confirmed that equipment was functioning and that Transport Security Administration and passport control checkpoints were accessible.

— Zach Wichter

Insurance

Shares of insurers with exposure in Florida bounced back Monday after Miami avoided taking a direct hit from the hurricane, which inflicted less damage than expected on the state’s Atlantic coast.

Universal Insurance Holdings, the parent of Universal Property & Casualty Insurance, the state’s second-biggest carrier, was up more than 13 percent for the day. Its stock had dropped 15 percent on Thursday, then regained some of that ground Friday.

The big national carriers like State Farm and Allstate cut back on writing homeowners’ insurance in Florida years ago, citing catastrophic risks and unhelpful state regulators. Those reductions left a vacuum filled by one state-owned insurer and dozens of relatively little-known companies, like Universal, that do all or most of their business in the state.

Insurer strength could be more of an issue in Florida than it was with Hurricane Harvey in Texas, where most of the damage was from flooding, a peril covered by the federal government. Wind damage, a much bigger factor in Florida, is covered by standard homeowners’ policies.

AIR Worldwide, a catastrophe modeling firm in Boston, predicted on Monday that Irma’s insured damage in the United States would cost the industry $20 billion to $40 billion.

— Mary Williams Walsh

Rental Cars

Before the storm arrived, rental car companies transported their vehicles elsewhere or to higher ground when possible. But once firms assess the condition of their fleets, many are expected to work with federal and state agencies and insurance adjusters to make vehicles available for rent to assist in recovery efforts.

“We’re trying to get these folks into vehicles as soon as possible so they can come in for the recovery process,” said Lisa Martini, a spokeswoman for Enterprise Holdings, which owns Enterprise, Alamo and National.

Those companies and others, including Hertz and Avis Budget Group, are waiving certain fees, such as charges for late returns, one-way drop-offs and cancellations, to ease travel in affected areas.

Christopher Agnew, a senior research analyst at MKM Partners, said he expected the rental car industry to lose profits early on, but to rebound eventually.

— Zach Wichter

A ship at the Port of Miami last week. Some vessels were redeployed to aid in evacuations.

Credit
Erik S. Lesser/European Pressphoto Agency

Cruise Lines

Several cruise companies canceled or cut short trips in the Caribbean and redeployed some of the hulking ocean liners to aid in hurricane relief efforts as ports in Miami, the Everglades, Canaveral and Tampa remained closed Monday.

Carnival Cruise Line rescheduled at least six cruises and canceled six more.

Royal Caribbean canceled two cruises to Cuba and the Bahamas, rerouting the ships to help areas ravaged by the storm, and rescheduled four other trips. Before transporting stranded travelers to Puerto Rico, the company’s Majesty of the Seas ship delivered ice, water, garbage bags, medical supplies and other provisions to St. Thomas and St. John.

Royal Caribbean said it would refund all fares and fees for the two canceled cruises and offer a 25 percent credit for new cruises booked in the near future.

Norwegian Cruise Lines sent two ships, the Norwegian Sky and the Norwegian Escape, to Miami on Thursday to allow more than 6,000 passengers to disembark ahead of the storm. The company chartered flights to Atlanta for some passengers and booked hotel rooms for others.

The Sky then traveled to St. Thomas to pick up 2,000 stranded tourists, said Vanessa Picariello, a spokeswoman for the company.

— Vivian Wang

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