McALLEN — According to a survey of a little more than 200 local businesses conducted by the McAllen Chamber of Commerce, less than 3% of businesses in town expect to make it through the pandemic without being negatively impacted.
A little over half of the businesses surveyed are confident they’ll survive the crisis; the other ones aren’t so sure, with 15.05% very worried about the situation and 3.23% saying they will likely go out of business.
“We’ve not seen anything like this ever before,” Chamber President Steve Ahlenius said. “What is so dramatically different about this pandemic event is the amount of businesses that have been forced to shut down temporarily or permanently across the sector.”
The chamber’s survey indicates that almost 85% of the businesses surveyed have suffered economic injury and that businesses estimate their average revenue loss at a little over 60%. Those statistics are likely going to have long-term consequences, Ahlenius said.
“That’s a pretty dramatic drop,” he said. “There’s businesses in McAllen that are shutting and going to shut permanently that have been here for 15, 16, 17 years; so they’re not like they’re a startup or a new business.”
The statistics also show the impact on the labor market for McAllen’s metropolitan statistical area. Fifty-five percent of businesses surveyed say they’ve reduced staff capacity, with an estimated 101,537 employees furloughs, a reduction of hours or the loss of their job.
“It’s about 38% of the workforce in the McAllen MSA, but that includes anybody who is working at a restaurant, a beauty salon, barbershop, the gig economy, all those personal trainers at gyms and all those businesses that have been shut down or deemed non-essential. So that gives you an idea of the total number of folks who have been impacted,” Ahlenius said.
According to Ahlenius, the dire economic situation has left many business owners with a difficult decision to make: close down for the foreseeable future or weather the storm for as long as possible.
“The challenge that they have is do they go pursue the economic injury loan through the SBA or the PPP Program, or do they say, ‘All I’m doing is prolonging the inevitable, and it’s just better to shut down now,” he said.
The survey was also used to measure how well McAllen businesses are keeping revenue streams alive. About 35% of businesses are selling online and they’ve seen an 18% increase in those sales, the survey says.
Ahlenius said the data will help prepare businesses for a similar situation down the road.
“There’s never a return to normal, but there’s going to be new opportunities, there’s going to be new ways of doing business, there’s going to be emerging business models that haven’t been developed before,” he said. “Thus is an opportunity for us to develop strategies for businesses, so if something like this happens in the future there’s another platform to keep revenue flowing into the business.”
The chamber has also taken steps to help the business community through the crisis, including creating a COVID-19 resource page, organizing cash mobs and getting the word out about curbside and delivery services.
“We also do what we call McAllen Talks, we just did one with the SBA today, we’re going to do one next Thursday with Congressman (Vicente) Gonzalez and we’re scheduling one with Senator (John) Cornyn. What we want to do is bring new information, pertinent information every week to the business community and the community as a whole,” Ahlenius said.
The chamber’s COVID-19 resource page is available on its website at https://mcallen.org.
