Business

Houston Businesses Feel Impact From The Coronavirus

No visitors from China, empty businesses in Chinatown, and low oil prices – but the impact will likely be only temporary.

In this photo released by Xinhua News Agency, workers disinfect closed shop lots following the coronavirus outbreak, in Jiang’an District of Wuhan in central China’s Hubei Province, Monday, Feb. 10, 2020. Mainland China has reported another rise in cases of the new virus after a sharp decline the previous day, while the number of deaths grow over 900, with at least two more outside the country.

There has not been a single case of the Coronavirus in Texas, but its impact can nevertheless be felt right here in Houston.

Tourism, small business and the energy sector may be affected, thanks to both misinformation and actual policy. 

For one, lower demand for energy in China is affecting Houston’s oil and gas companies. And that comes at a time when the oil industry is already dealing with layoffs and expected to lose thousands of jobs in Houston this year.

“West Texas Intermediate has actually fallen by $11 a barrel from the first of the year – that’s down 18%,” said Patrick Jankowski, senior vice president of research at the Greater Houston Partnership. “And that’s going to affect the oil and gas firms that need that additional revenue from the higher oil prices to service debt, to fund operations and to continue to operate in the oil and gas industry.”

In Chinatown, businesses are feeling the impact as a result of paranoia. After rumors spread on primarily Chinese-language social media, grocery stores temporarily lost 50% of their business and restaurants up to 80%, according to Kenneth Li, chair of the Southwest Management District.

Public officials like Houston Mayor Sylvester Turner, Harris County Judge Lina Hidalgo and State Rep. Gene Wu, D-Houston, have urged people to stop worrying and continue to shop and dine in Chinatown.

“If you are spreading false information about your own community, you are doing harm to your community,” Wu said.

Meanwhile, all major U.S. airlines have suspended flights to and from China. That includes United Airlines, which normally offers direct flights from Houston to China.

Air China has filed an emergency request with the U.S. Department of Transportation to temporarily drop their Houston and Newark destinations and fly two routes combining four U.S. cities.

That could impact the number of Chinese visitors to Houston. There are no current numbers, but according to Visit Houston, there were 58,000 visitors from China in 2018, and they spent an estimated $154 million here.

Still, Jankowski doesn’t think fewer Chinese visitors during this time will affect the Houston tourism economy much.

“Overall we have 20 million people visit the city. It’s going to impact maybe those businesses that depend heavily on Chinese tourism,” he said. “But it’s not going to have a dramatic impact on Houston’s economy as a whole.”

Of course, he said, there may be deals that will be postponed because people from China can’t fly here to do business, and vice versa. But it’s too soon to know what kind of impact that will have on the economy, he added.

“That doesn’t mean those contracts won’t be signed or those purchases won’t take place,” he said. “Once the travel restrictions are lifted, business will resume as usual.”

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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