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Insertnamehere
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NYC After COVID?

Tue May 19, 2020 3:44 pm

Before COVID, United, Delta, and Jetblue all had significant operations in the NYC area partly because of Corporate contracts. But companies are seeing how WFH means that their employees are still productive, will we see less business travel? Coupled with the predicted "white flight" from NYC meaning many of the wealthier residents are going elsewhere, how is the NYC market going to change once planes start flying?
 
micstatic
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Re: NYC After COVID?

Tue May 19, 2020 3:55 pm

I think even before COVID it was getting harder to have a big NYC prescience. The expense. Many of the companies I've worked at have had trouble getting people to work in NYC. It was always easy for the just out of college worker who wanted an adventure. Then they were ready to go somewhere else in the country. I think business travel will still be a big thing, but less than it was yesterday. Sales type missions still require face to face. But many within company meetings will be replaced by video. my two cents.
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Cointrin330
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Re: NYC After COVID?

Tue May 19, 2020 4:10 pm

COVID19 has and will change the business landscape not just in NYC but globally, for a long time. Working From Home, for those fortunate to have the types of jobs that allows them to do so, will remain a permanent fixture of the American office culture post-COVID. Companies will also find a source of shedding some expenses in the real estate footprint, but will also have to be mindful of whatever incentives they receive from local governments to keep a certain presence in a major center and that includes New York City. What will really determine how much stays in NYC and how much leaves is the effectiveness at the State and Local Government level and their response to the Crisis and their ability to manage public health once NY State fully reopens. There are simply too many F500 companies in New York City to assume they'll all leave. They won't for a number of reasons. NYC has emerged stronger from past crises, and COVID19 isn't an exception. A significant cause of NY becoming the country's epicenter of the outbreak was the Federal Government's response (actually, its lack of it) and the chaos, confusion, and deliberately slow response applied by the Trump Administration. As a global gateway, NYC was the recipient of many travelers from Europe (NY is the single largest gateway to Europe) and it has been well documented that the strains of COVID19 that spread rapidly in the area were in effect imported by the movement of people to/from Europe. The footprint of the major carriers in NYC will shrink considerably, but not to the point of irrelevance. UA and DL will retain their respective dominance at EWR and JFK/LGA respectively. B6 probably isn't going anywhere. AA will likely shrink the most, unless it can successfully retain the bulk of the corporate contracts it has which along with a strong FF base, remain the focal point of its footprint in NY. All that said, I wouldn't write off NY. Things will change, for sure, but people still want to live there, pursue their dreams there, and the pool of talent across so many industries is unlike any other. How many people will leave for the suburbs will depend on how this crisis is managed going forward. The immediate NY suburbs have not escaped the wrath of COVID19 and count among the highest outbreak clusters in the State.
 
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STT757
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Re: NYC After COVID?

Tue May 19, 2020 4:14 pm

If there is flight it will be to New Jersey, Long Island, Connecticut and Westchester. Just reversing some of the trends started in the late '90s - '00s when people from the burbs wanted to be in the City. In Jersey and Long Island they can still be close to the city for business and entertainment while at the same time having a yard for their kids to play. Some companies might move some offices from the City to suburban corporate parks where their employees can better socially distance as well as avoid public transportation.

https://nypost.com/2020/04/29/these-new-yorkers-fleeing-coronavirus-vow-theyll-never-return/

I think the general consensus on Anet is that International travel will be down hard for a while, but that leisure domestic as well as Caribbean and Mexico as well as the visiting friends and relartives (VFR) traffic to Dominican Republic etc.. will be the first areas of recovery. B6, DL and UA had large operations in NYC before the pandemic and they will after.
AA was reducing their presence pre-pandemic, that trend will only accelerate.

One are that is going to hurt is the massive renewal of the airports in the NYC region. Big plans were underway for all three airports with work already started at LGA and EWR. The operator of the region's three airport, Port Authority, is going to slash their ten year capital plan as airport revenues and toll revenues have dried up. Projects like the LGA Airtrain, JFK Terminal area projects, new Airtrain/ PATH extension at EWR are going to be put on the back burner.

https://www.nj.com/coronavirus/2020/04/no-traffic-no-revenue-port-authority-pleads-to-feds-for-coronavirus-aid.html

https://therealdeal.com/2020/04/24/major-tri-state-infrastructure-projects-in-jeopardy/
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Aptivaboy
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Re: NYC After COVID?

Tue May 19, 2020 4:45 pm

A major issue that NYC is going to have to face is wealth flight. Not trying to be political but the taxes there were already causing many people of means to leave. The COVID crisis will likely accelerate that trend. As Gov. Cuomo has said, “Tax the rich, tax the rich, tax the rich. We did. Now, God forbid, the rich leave.” Now, what does that mean for NYC and aviation?

A lot less money as the wealthy depart NYC for more economical pastures. Since things like airport renewals are tax driven, a budget shortfall may well affect those upgrades. A lot of people in the Tri State Area commute to NYC to work, but the COVID crisis has shown that working from home is a real possibility for many professional occupations. That will mean fewer income taxes from them, as well. Don't be shocked to see more businesses, including within the finance sectors move. That will mean fewer taxes on businesses being collected, and Wall Street is a major tax cow for the city. NYC's resistance to Amazon opening up a new HQ there also indicated a certain anti-business trend in the area. So...

Unless a boat load of federal bailout money suddenly comes pouring in, I tend to predict a general slowing of the NYC economy. This will include a halt or serious slowdown to airport upgrades. I'm not suggesting that NYC will go bankrupt; I'm not a total doom and gloomer. But... Yes, the NYC economy will be hit hard for awhile, perhaps a long while, until a recovery can occur.
 
ltbewr
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Re: NYC After COVID?

Tue May 19, 2020 10:09 pm

NYC is also a major tourist destination, domestic and international, and will also be down for years until a vaccine or good treatment for severe symptoms and incomes recover. Likely international travel in particular will be very difficult, requiring proof of vaccines or test results that have immunity from Covid-19, temp testing and survey of health before boarding planes well into 2022. Travel of persons from China will also be down due to the political situation that has developed under the Trump administration. Fares, after an initial 'welcome back' phase, will go up due to costs for new health security costs and to recover losses. Domestic tourism will also be weak to NYC due to the massive unemployment that will persist but could come back sooner than International travel.

Business travel to NYC and metro area will likely suffer a similar pattern compounded with likely higher fares, many not wanting the hassles of travel, more video conferencing, secure electronic signing of documents. I would expect that offices in NYC will have fewer people in city offices, shifting of many to home for some at least several or most days a week or to satellite offices in other cities in suburban areas or to other, smaller, lower cost metro areas, especially more 'back office' work like accounting, some HR and some grunt data work.
 
Moosefire
Posts: 126
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Re: NYC After COVID?

Wed May 20, 2020 5:43 pm

Aptivaboy wrote:
A major issue that NYC is going to have to face is wealth flight. Not trying to be political but the taxes there were already causing many people of means to leave. The COVID crisis will likely accelerate that trend. As Gov. Cuomo has said, “Tax the rich, tax the rich, tax the rich. We did. Now, God forbid, the rich leave.” Now, what does that mean for NYC and aviation?

A lot less money as the wealthy depart NYC for more economical pastures. Since things like airport renewals are tax driven, a budget shortfall may well affect those upgrades. A lot of people in the Tri State Area commute to NYC to work, but the COVID crisis has shown that working from home is a real possibility for many professional occupations. That will mean fewer income taxes from them, as well. Don't be shocked to see more businesses, including within the finance sectors move. That will mean fewer taxes on businesses being collected, and Wall Street is a major tax cow for the city. NYC's resistance to Amazon opening up a new HQ there also indicated a certain anti-business trend in the area. So...

Unless a boat load of federal bailout money suddenly comes pouring in, I tend to predict a general slowing of the NYC economy. This will include a halt or serious slowdown to airport upgrades. I'm not suggesting that NYC will go bankrupt; I'm not a total doom and gloomer. But... Yes, the NYC economy will be hit hard for awhile, perhaps a long while, until a recovery can occur.


Nail on the head.

(Personal but supporting anecdote) I’ve lived in Manhattan the last few years... we’re moving to Texas at the end of the month. We have several friends that are leaving NYC in the next 6 months and know of only one couple moving into the city.
MD-11F/C-17A Pilot
 
phatfarmlines
Posts: 1498
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Re: NYC After COVID?

Thu May 21, 2020 4:00 pm

Insertnamehere wrote:
Coupled with the predicted "white flight"


This is the first I've heard of this for NYC. I thought gentrification reversed this trend in the last 10-20 years.

But then again, when you pay a majority of your salary in rent, I would be looking for a place to get a house and live with a much more affordable mortgage.

Edit: On second thought, living in a walk-in closet for an apartment in Manhattan might not be attractive in a post-COVID19 world with future layout plans (office, stores, etc) already being influenced by social distancing, so I can understand desires for people looking for more space.
 
Insertnamehere
Topic Author
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Re: NYC After COVID?

Thu May 21, 2020 4:56 pm

phatfarmlines wrote:
Insertnamehere wrote:
Coupled with the predicted "white flight"


This is the first I've heard of this for NYC. I thought gentrification reversed this trend in the last 10-20 years.

But then again, when you pay a majority of your salary in rent, I would be looking for a place to get a house and live with a much more affordable mortgage.

Edit: On second thought, living in a walk-in closet for an apartment in Manhattan might not be attractive in a post-COVID19 world with future layout plans (office, stores, etc) already being influenced by social distancing, so I can understand desires for people looking for more space.


White flights have happened a couple times to my knowledge in New York. One of the biggest was the mass evacuation out of the Financial District after 9/11, while many moved elsewhere in the city it made many apartments downtown great investments and made some people a lot of money.

Couple that with the obscene taxes we see here, NYC goes through these massive boom-bust cycles you don't really see elsewhere in the states but in cities like London, Paris, or Hong Kong.

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