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Grand Island economy survives through pandemic challenges

Grand Island economy survives through pandemic challenges


The coronavirus pandemic has challenged society in many ways. One troubling aspect is how it affected the livelihood of so many people, from business owners to employees, from the companies that supply the merchants to the consumers.

It was literally a chain reaction that shook the foundations of society.

According to Cindy Johnson, president of the Grand Island Chamber of Commerce, COVID-19 presented unprecedented challenges to the business community, including many sectors that had to shut down altogether (bars, restaurants, dental offices) or scale back operations.

“It also presented an increased burden to those that remained in full operation, including grocery stores, convenience stores and health-care-related offices,” Johnson said. “Supply chains were interrupted, which impacted production.”

Some positives

But it wasn’t all doom and gloom, she said.

“On a positive note, mortgage interest rates were at a new record low that had the impact of stimulating the economy related to home construction and home sales,” Johnson said. “It also reduced the cost of borrowing for business operations.”

Low interest rates also encouraged motor vehicle sales, resulting in a 50% increase in sales tax revenue over 2019, she said.

According to the Nebraska Department of Revenue, motor vehicle sales tax collection in Hall County bottomed out in April at 81.5% below what it was the previous year. The next month, May, though, motor vehicle sales tax collection in Hall County climbed to 64.6% of what it was the previous year. By June, it peaked at 89.7% of what it was in June 2019.

Rough year for tourism

Over the last decade, Grand Island has grown to a destination community because of the Nebraska State Fair. When the fair moved to Grand Island in 2010, more than $40 million in new infrastructure was built to accommodate the thousands of livestock that are shown annually at the fair, as well as the fair’s other exhibits.

With such modern facilities, during the fair’s off-season, national livestock shows and other events quickly made the community a go-to place for thousands of visitors annually.

Also considering Husker Harvest Days (which recently completed a $7 million-plus renovation), Fonner Park horse racing, the Heartland Events Center, Stuhr Museum and the annual sandhill crane migration, Grand Island’s economy benefited greatly as hotels and restaurants expanded in the community.

Visitors, tourism, conventions and meetings contribute millions of dollars annually to Grand Island’s economy. The city’s food and beverage tax revenue, lodging tax revenue and the local sales tax revenue that those visitors generate go to help not only promote and grow the community, but also maintain the infrastructure vital to the city’s operations.

Unemployment not long-lasting

Those revenue streams were all affected by the pandemic. Public health directives, early in the pandemic, nearly shut the town down, other than those businesses that were deemed essential to the operation of society.

At the height of the pandemic in April, Grand Island’s MSA had an 11% unemployment rate, with 5,022 people listed as unemployed.

But Grand Island’s unemployment rate in November was 4%, with 1,741 listed as unemployed. The rate had been even lower in October — 3.4% — with 1,479 people listed as unemployed.

Johnson said that because of COVID-19, businesses slashed corporate travel, conferences were moved to virtual, trade shows and events such as concerts, livestock shows and Husker Harvest Days were not held.

“The restrictions on gatherings and limitations on distancing severely impacted the hospitality industry,” she said.

Johnson said the business community rose to the challenge by instituting measures to minimize the potential risk of spreading the virus. They assured social distancing through changes in store layouts such as in/out lines, Plexiglas shields, staggered work hours and remote working.

“Dozens of new policies and procedures were implemented to ensure the safety of employees and customers,” she said. “Reduction in seating capacity significantly impacted eating establishments and all businesses had to take extraordinary measures to clean and sanitize facilities, equipment and surfaces.”

The pandemic also changed the way people conduct business. Many businesses continued to be productive by having their employees work from home.

Some businesses abandoned their brick and mortar locations, such as Principal Financial’s offices in Grand Island, as the company announced it would be transitioning to working remotely on a permanent basis. That company’s building has since been sold to the Grand Island Public Schools.

Reliance on Zoom

Zoom, which allows groups of people to video conference, became a vehicle for conducting meetings.

“In lieu of in-person meetings, businesses conducted sessions by Zoom or other virtual meeting sites,” Johnson said. “This, too, impacted hotels as conferences moved to the virtual.”

Because the pandemic was a new challenge for everybody, she said, society slowly adapted to its new reality.

Johnson said that despite the unprecedented challenges presented by COVID-19, the local economy is stable with relatively low unemployment (returning to pre-COVID-19 days), minimal business closings and the ability of businesses to modify and adjust while remaining operational.

“As one business owner said, ‘It’s not been near as bad as I thought it would be,’” Johnson said.

Prior to the pandemic, national retail chains were battling the loss of business due to the increasing trend of people purchasing goods on the internet. National chains, such as J.C. Penney, Sears, Shopko and Gordmans, are some of the national retail chains that have been closing stores in the last several years.

The pandemic only accelerated the trend of doing business on the internet due to the health restrictions posed by government to stop the spread of the pandemic.

“Online shopping, banking and other transactional activities were accelerated due to COVID-19,” Johnson said. “Because consumers have acclimated to this new model of doing business, many will continue in this fashion.”

She said video conferencing will facilitate work not only within communities and states but across the world.

“This field provides opportunities for new startups with an emphasis on project management, employee training and collaboration among various groups,” Johnson said.

The rapid growth of technology, in recent years, has allowed internet speeds to become faster and faster. Advances in micro-processing have miniaturized efficiency. That has allowed society to overcome many of the barriers the pandemic placed on business operations. Automation will also see rapid advancement due to the pandemic as businesses find ways to deal with supply chain disruptions, such as the massive ones caused by the pandemic.

Johnson said telehealth and telemedicine became household words in 2020 as health care facilities worked to lower the exposure of patients to COVID-19.

“Virtual ‘doctor appointments’ will likely continue, especially for those patients in more rural areas with limited access to health care,” she said.

Higher education adapting

Johnson said universities and colleges may see a continuation or expansion of online learning for certain classes, perhaps those that are generally required (freshmen level).

“What this will ultimately mean for higher education is interesting to contemplate, given how important college is to expanding young adults’ horizons and socialization,” she said.

But the pandemic further exposed what many have been telling society for years — the technological divide between the haves and the have nots. In many cases, the technology is available for faster internet speed, but not the infrastructure.

Johnson said many of these anticipated growth areas, including video conferencing and education, require high-speed internet.

“Communities and households without higher-speed internet are at a disadvantage,” she said. “Alternately, with high-speed connectivity, education can be delivered efficiently and effectively and employees can work from anywhere. This will be a consideration in business expansions and employee recruitment.”

Johnson said the outlook for the new year will be greatly impacted by the ability of the vaccine to be broadly administered, allowing people to gather, hold events and restore traditional activities such as the Nebraska State Fair, Harvest of Harmony, Husker Harvest Days, and school and sports activities.

“Residents are hungry for entertainment, socialization and a return to a lifestyle that was halted,” she said.

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