‘It’s turned around’: Some local businesses are weathering the COVID-19 storm

Although COVID-19 has had devastating effects to many industries in Southern Utah, Nielson RV has survived and thrived the downturn in the economy. St. George, Utah, date undefined | Photo courtesy Nielson RV, St. George News

ST. GEORGE — Despite many business sectors taking it on the chin during the COVID-19 pandemic, there are local companies that have thrived.

One business that is overcoming the challenges in Southern Utah is St. George-based Zonos.

Joshua Aikens, chief of staff at Zonos said while he had reservations about the future when COVID-19 began, things have turned out much different than originally feared.

“We were absolutely worried just like everyone else,” he said. “We work with global and domestic retailers and there were questions on how they were going to be affected. Our business is really about how their success translates to our success.”

Zonos is a SaaS – software as a service company – which produces custom calculations to assist retail companies determine import and customs fees, as well as duties and taxes when selling e-commerce export products to overseas and cross-border customers.

At first, Aikens said, there was a downturn in the export industry, but as people shut in more and more they turned to e-commerce purchases in increased numbers and Zonos’ business began to rebound.

This was good news for Zonos company officials that knew the potential.

Market and consumer data provider Statista predicts that total global e-commerce sales will reach $6.5 trillion by 2023, with cross-border purchases projected to account for 22% of total e-commerce worldwide.

Founded in 2009, Zonos has grown from 34 employees to 44 during the past 40 days. The new employees are sustainable to the business model, Aikens said, and are considered permanent additions to the company.

“This is just the first step,” Aikens added. “Our growth trajectory is pretty massive over the next couple of years.”

Work crews put the finishing touches on PrinterLogic’s new 60,000-square foot headquarters on Tech Ridge, which is scheduled to open this fall. When it opens, it will also be home to tech companies like St. George-based Zonos. St. George, Utah, July 12, 2020 | Photo by David Louis St. George News

The plan, Aikens said, is to add an additional one-quarter to one-third more employees in the future along with plans to move into new office space on the 150-acre Tech Ridge in PrinterLogics’ upcoming 60,000-square-foot headquarters.

Long-term plans for the Tech Ridge development include space for buildings – housing multiple tech companies including Zonos, surrounded by residential neighborhoods, restaurants and hotels all flanked by a large amount of open space for recreation.

Zonos’ target move-in date, Aikens said, is tentatively scheduled for October.

Business on the move

Another thriving industry throughout the region is recreational vehicle sales.

A canvas of the majority of Southern Utah recreational vehicle dealers all confirmed sales have been brisk during the pandemic, but there have been challenges.

Prior to COVID-19, the recreational vehicle lot at Nielson RV’s St. George lot was bursting at the seams. After an explosion in sales, they are working to restock inventory. St. George, Utah, date undefined | Photo courtesy Nielson RV, St. George News

Katie Leavitt, general manager with Nielson RV, said pandemic sales produced both pros and cons.

“When it all first came out and nobody knew what was going on, we had to discount our trailers to sell them,” Leavitt said. “Now, it’s turned around and it’s extremely difficult to replenish our supply because the factories shut down for six to eight weeks and when they did come back it was at 25% capacity … but now they are starting to provide inventory and pick things up.”

The average RV sold during the pandemic accommodates family needs with multi-sleeping options and sold between $25,000 – $35,000. This is the sweet spot that is increasingly hard to find, said industry insiders.

The RV Industry Association estimates 46 million Americans will take an RV trip in the next 12 months. The organization also found 20% of U.S. residents have become more interested in RV travel than flying and cruises since the coronavirus hit.

Sales of RVs have gone through the roof since the coronavirus pandemic began, with 80% to 90% of purchases coming from first- time buyers. Across the nation, RV dealerships have reported sales increases of 40%-50% and more.

Although Nielson RV has experienced 100 units sold per month, company officials made the decision to temporarily close its Hurricane location and consolidate sales in St. George. Hurricane will reopen once inventory improves, Leavitt said.

The dealership has approximately 60 employees – with no layoffs during the pandemic.

“Going into this, I thought we would have to lay people off. I was a little nervous at first,” Leavitt said. “I wasn’t sure what to expect and luckily we’ve survived and thrived during this difficult time.”

To date, company officials have not felt the need to hire additional staff. However, they plan to hire new technicians in the future to meet the needs of the Southern Utah RVing community.

While there have been businesses and industries that have weathered the COVID-19 storm, it’s not all peaches and cream for everyone, said St. George Mayor Jon Pike.

“We have had a lot of drop in retail sales, restaurant visits and hotel/motel occupancy,” Pike said. “Even though it’s much improved now, we are probably going to be feeling the effects for some time.”

Panguitch Valley Balloon Rally, Panguitch, Utah, June 26, 2020 | Photo by Jeff Richards, St. George News / Cedar City News

Pike added that the greater St. George area has done better than some of Utah’s communities during COVID-19, he admits “we still are obviously not where we would like to be especially with businesses that have been impacted by the drop in tourism.”

There is a lot on the line to see a bounceback to local economies from tourist dollars.

According to state figures, tourists pumped $9.75 billion into Utah’s economy in 2018, a 6.5% increase in spending over 2017, with national and state parks both reporting record visitation. A 2019 Kem C. Gardner Policy Institute at the University of Utah report indicated that before COVID-19, tourism generated more than $1.20 billion in state and local tax revenue annually.

“If we can keep the virus at bay and not having it spread too fast and furious, we may have a positive trajectory in revenues again,” Pike said.

Still, there has been pain, he added.

Pike identified “minimal” layoffs at companies such as Design to Print, Inc. which builds high-end displays for conventions and tradeshows, and RAM Co., a St. George-based designer and manufacturer of electromechanical devices. Other local companies that have been affected by COVID-19 are tech companies such as PrinterLogic and busybusy, he added.

“Luckily, most of the people laid off were able to find other jobs here with other tech companies here,” Pike said. “I believe this is more a temporary reduction in workforce and hopefully, they will be back.”

Cedar City businesses on the comeback

With a population of 33,000, Ceder City has experienced its own struggles.

“We’ve lost one restaurant,” said Chris McCormick. president and CEO at Cedar City Chamber of Commerce.

Brian Vaughn as Lance and Jake the dog as Crab in the Utah Shakespeare Festival’s 2008 production of “The Two Gentlemen of Verona,” Cedar City, Utah, circa 2008 | Photo by Karl Hugh, courtesy of the Utah Shakespeare Festival, St. George News

“Charlie’s Southern Barbarbque closed and we’ve got others who are hanging on by a thread, which is a real challenge,” he added. “A lot of our businesses depend on bigger events like the Utah Shakespeare Festival and Summer Games. When you no longer have major events like these, which brings in thousands of people into town over several days, it really has an economic impact.”

In May, the chamber conducted a survey of 188 businesses. More than 40% responded noting they were not open to the public with more than 20% laying off employees.

“This showed a pretty big impact COVID has had,” McCormick said.

Other Cedar City-based companies impacted include those that support the region’s gaming industry, small mom-and-pops, gyms and businesses that support tourism.

“What is happening in Cedar City I think mirrors to what you are seeing happen in St. George,” McCormick added. “It is amazing the ripple effect of things happening that we don’t see.”

Although the city is going through hard times, McCormick said, he is a half-full kind of guy, always optimistic about the future.

“Yes, it’s been tough for us, but we were fortunate to plan somewhat ahead when this began and put a fair amount of money aside to help weather the storm,” he said. “If this goes on, there could be some issues. But I think we’re going to pull out of this okay someday.”

Although the federal government has made a funding mechanism available for small business survival, many of the Cedar City Chamber of Commerce’s 330 members did not secure financial support from the federal stimulus funding package, known as Coronavirus Aid, Relief and Economic Security Act (CARES).

According to the chamber’s survey, 39% of Cedar’s businesses were not able to get any of the $2 trillion in federal financial funding.

“Either they were too new or didn’t qualify for one reason or another,” McCormick said. “This definitely had a big impact. Nearly 82% of our business owners said they had a significant decrease in sales volume, but 3.2% reported business growth. It was hard, but I believe that things will turn around.”

Downtown Cedar City businesses, Cedar City, Utah, March 17, 2007. | Photo by credit: ShareAlike 2.0 Generic (CC BY-SA 2.0), Ken Lund, St. George News

Now that Zion National Park has begun operating its shuttle service to improve access, alleviate parking congestion and increase tourist attendance, optimism is sweeping throughout businesses in nearby municipalities such as Cedar City.

Representatives at the Cedar City location of Pork Belly’s Eatery & Catering Co., said while it’s been a rough time they have not been forced to close permanently and put its approximately 20 employees out of work.

As a response to the pandemic, Pork Belly’s had closed in-door dining – which is now open – offered family meal packages and a to-go option, which were “tremendous” successes, company officials said.

“It was a struggle, but we are headed upward and we’re really excited where we are at right now,” said Rhiannon Vandegrift, night lead server. “We are optimistic and enjoy having people back in our dining room.”

Washington County COVID-19 Economic Impact

  • Lost an estimated $3 million per week in hotel revenue in the first eight weeks of the crisis
  • Hotels running at 10-20% occupancy – normally 80-90%
  • Nearly 5,000 rooms unoccupied – normally 1,000 per night
  • Lost $3 million per week in room revenue
  • Lost $127,000 per week in room tax
  • Lost $27 million in room revenue

Year-over-year (through April), the county has experienced a $985,000 loss in Transnet Room Tax funds. Annual losses are anticipated/projected to be $2.3 million for 2020.

Dixie Center as of July 8, 2020

  • 60 events impacted
  • Eight rescheduled for 2020
  • 29 rescheduled for 2021
  • 20 events lost
  • 67,350 attendees, 44,285 out of town visitors affected
  • $51 million in economic impact lost
  • 14 major events canceled or postponed (52 smaller events also impacted) – $20 million loss

Tuacahn – concerts in the first eight weeks of the pandemic

  • Three canceled shows – 4,200 out of town visitors affected
  • Three rescheduled for fall – 5,700 out of town visitors affected
  • Eight rescheduled for 2021 – 12,800 out of town visitors affected
  • 22,700 out of town visitors affected
  • $10 million in economic impact lost

Since the first eight weeks, economic impacts have improved with the exception of Tuacahn canceling the full Broadway season, adding $90 million in economic impact loss. Some of the figures overlap (hotel revenue lost is part of the overall economic impact lost, Tuacahn guests, golf and other categories).

Source: Greater Zion Convention & Tourism Office. Figures as of July 10.

Copyright St. George News, SaintGeorgeUtah.com LLC, 2020, all rights reserved.

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