COVID-19 devastates area businesses

i Apr 15th 2020

By Joe Sylvester, Northeastern PA Business Journal

When John Maday was walking along Public Square in Wilkes-Barre on a Wednesday morning in late March, he was one of the few people there.

Maday, president of the Downtown Wilkes-Barre Business Association, is used to seeing the square, and downtown, filled with traffic and pedestrians on any weekday morning. On this day, and for more than a week prior, it was deserted.

This was the second week of Gov. Tom Wolf’s shutdown of most businesses in order to combat the spread of COVID-19, the sometimes deadly disease that has caused a world pandemic. Even if it infected no one, the disease was disabling economies around the world.

As it was throughout the state, most businesses in Wilkes-Barre, Scranton and everywhere else were locked and dark, save for eateries offering takeouts, such as Circles on the Square. Maday saw an occasional customer walking out of the deli with a bag.

“Some people are walking around,” Maday said. “It’s extremely limited.”

He said the Kirby Center marquee was still lit and running, perhaps to keep people’s spirits up.

“It’s basically something of a beacon,” he said.

He added restaurants can offer takeouts, but, “That’s primarily their main source of income right now.”

They don’t need as many employees because business is not anywhere near what they usually do.

“From a business perspective, it’s devastating,” Maday said.

Ernest Lemoncelli, of Eynon, co-owner of EZ Cruise and Travel with his wife, Beatriz Cabrera, knows all too well how devastating the shutdown and travel restrictions around the world can be. Cruise lines are canceling, clients are wanting refunds, unless they decide to accept a credit for a future trip. If a customer is worried and wants to cancel a trip that is months away, such as in August, Lemoncelli said, he will suggest they wait. That way if the cruise cancels and they can’t cancel their flight, insurance could cover the cost of the flight.

He said usually companies don’t readily refund money but will offer credit, sometimes up to 125% of the cost of the trip. That doesn’t help him, cruise companies, airlines, hotels or their suppliers if no one is booking trips.

“We have what’s called, in business terms, a revenue shortfall,” Lemoncelli said late last month.

“It started falling off as people got worried and once the CDC said avoid cruise ships,” he said.

People he has signed up for a cruise in August asked if they should cancel now.

“I said, no, see what happens,” Lemoncelli said. “The longer you wait, the more likely it’s going to be favorable to you.”

He said once a cruise cancels, the would-be travelers can get money back.

“If the airline doesn’t cancel, now you have a claim with insurance because the function was canceled,” he said. “If the FAA makes a no-fly zone, you have a claim.”

With the travel restrictions and trips canceled, Lemoncelli and Cabrera were spending time processing refunds and rescheduling, but no new business was expected untill the end of June.

“And then only the brave souls are going to jump on,” Lemoncelli said.

He didn’t know what was going to happen.

“We have enough to cover client liabilities and payments, and enough to live on for a couple of months,” he said. “Once the money stops coming in, if you don’t have a reserve, you’re screwed.

“I don’t know how you stop two-thirds of an economy, then on the 15th everything comes back to normal.”

Because most people’s retirement plans took a beating, they may decide to use the money they have to fix the roof rather than take a vacation.

“It’s a very difficult situation, and you’re going to see a lot of crashing businesses,” Lemoncelli said.

There may be less money available all the way around.

“The roads you thought were going to get paved this year — that’s not going to happen.”

“The key to all of this will be help, from what I’m hearing, the state and federal and level,” Maday said. “From what I’m hearing, these loans will have the potential to become out-and-out grants.

“It’s going to take a heavy lift from the government, especially the federal government.”