As the Washington region continues to dig out from the Blizzard of 2016, the storm is revealing its economic force — on stores that closed for days, hotels stuck with empty rooms and government agencies left with steep snow bills.
State and local governments say they won’t know their full costs for several weeks, after they’ve cleared all the snow and tallied contractors’ bills along with overtime pay for police, firefighters and public works employees. Federal officials say they expect it will take several months to determine Snowzilla’s full national economic impact.
But some experts say a storm that paralyzed airports, transit systems, highways, businesses and school systems along the East Coast for an entire weekend and much of the business week will cause significant financial damage.
“The potential for this storm to be a billion-dollar weather disaster is pretty high,” said Paul Kocin, a National Oceanic and Atmospheric Administration meteorologist who has written about the economic impacts of major weather events. “Any storm that affects 30 million to 50 million people over several days has got to have a huge economic impact.”
An analysis by Moody’s estimates the economic cost of the blizzard in terms of lost productivity and spending at $2.5 billion to $3 billion.
Moody’s estimated that losses in the Washington region were roughly $570 million through Monday. That’s about a quarter of the total economic activity for the three-day stretch that began the first day of the storm. By contrast, losses in the New York metropolitan area were about 7 percent of the region’s economic activity, which translates to roughly $460 million.
Hans Bruland, general manager of the Hay-Adams in downtown Washington, said his hotel lost four days’ worth of business meetings, social events and hotel guests. He declined to share a dollar figure.
“Some of it gets rebooked, but some of it gets lost for good,” Bruland said. “When you have the city and the airports shut down, and the federal government shuts down and the transportation systems shut down on top of it — it impacts everyone.”
Metro General Manager Paul J. Wiedefeld said the transit agency, which shut down for two days and restored service only gradually after the storm, lost “close to about $7 million” in fare revenue and incurred “several million dollars” in other expenses.
Metro’s financial staff is still adding up costs in case the agency becomes eligible for federal disaster relief. Expenses included hiring contractors to remove snow, paying employees overtime and putting up scores of Metro workers in hotels during the storm.
“It’s going to be a substantial number,” Wiedefeld said. “I don’t know exactly what it’s going to be, but with these things, once the meter starts running, it runs pretty hard.”
Virginia Gov. Terry McAuliffe (D) said shortly after the cleanup began that the storm was costing the state $2 million to $3 million an hour, and that it could end up being one of the most expensive in the state’s history, topping $100 million. That’s about half the Virginia Department of Transportation’s annual snow-removal budget.
George Mason University economist Stephen Fuller said that even one of the biggest snowstorms in the Washington region’s history probably won’t cause a significant economic ripple in the long term. That is because so many workers in the region’s knowledge-based economy could work on a home computer, no matter how much snow fell.
Much of the big-ticket consumer spending that didn’t happen was simply deferred, he said. People who couldn’t visit snowy auto-dealer lots last weekend will resume their car hunt another weekend, he said.
“Most of the economy just got disrupted,” Fuller said. “People still got their work done, or a lot of it will get done by the end of the year.”
Even so, Fuller noted, there will be financial winners and losers. Plenty of stores and restaurants, particularly smaller businesses and those in car-dependent suburbs, have felt the hit of closing for several days.
On the other side, he said, grocery and liquor stores profited from people stocking up on bread and booze before the storm. Anyone with a truck bed and a plow blade had plenty of work, while restaurants and bars that could stay open in the city and walkable neighborhoods reported brisk business.
Out-of-town visitors who were trapped here spent money on hotels and restaurants that they otherwise would not have. Fuller noted that even an uptick in “happy activities” during snowstorms — think of the traditional baby boomlet nine months after people hunker down — will generate economic activity in the long term.
“Some of that revenue is gone and won’t be recaptured,” Fuller said. “But when you add up the winners and losers, it pretty much smooths out.”
One of the biggest economic hits for downtown Washington came with the cancellation of the first four days of the Washington Auto Show, which was scheduled to start just as the first flakes fell Jan. 22. The city’s largest public show, which ends Sunday, typically attracts tens of thousands of people to the convention center and surrounding restaurants over 10 days.
“It’s hard to calculate [the financial impact] just yet,” said John O’Donnell, the auto show’s producer. “We’re just figuring it out day by day. . . . We’re hoping we’ll be able to make up for lost opportunities, but we just don’t know yet.”
Several elements of the storm helped blunt the economic impact, Fuller and local officials said.
The first was timing. With January already a bleak month for many businesses, there was less to lose. Hotels were at their lowest occupancy rates of the year, stores were in their post-holidays slump, and there were no major conventions to cancel in the District.
The second was the unusual certainty of an early weather forecast, which gave companies and governments five days to rejigger staffing, speed up deliveries and call in snowplows. Airlines had time to move some planes from shuttered airports before the storm hit, making it easier to dig out and resume flights.
Another bright spot: For the most part, the lights — and the Internet connections of thousands of people who carried on work from home — stayed on.
“Holy smokes, we were looking at outages in the hundreds, not the thousands,” said Jim Dinegar, president of the Greater Washington Board of Trade. “Pepco exceeded everyone’s expectations.”
Dinegar said the biggest complaints came from companies that have traditionally followed the federal government’s lead for closing or reopening after a storm. He said some felt they lost too much productivity Monday and Tuesday, when the federal government closed. Some company officials, he said, told him they’ll start making their own calls, regardless of what the feds do.
“You have companies throwing their hands up in frustration and saying, ‘We could’ve had some of our people come in or work from home,’ ’’ Dinegar said. “It’s beginning to chafe at them that they’re losing business opportunities.”
The storm took a noticeable toll on businesses in auto-
dependent suburbs, where many of their employees and customers couldn’t get their cars out until midweek, and even then, roads remained choked with mounds of plowed snow.
Allen Robinson, owner of Books and Other Found Things in downtown Leesburg, Va., estimated that he lost up to a quarter of his monthly business during the five days his store closed. He said he is not sure how much of that he can make up. Shoppers heading out after the storm seemed more eager to restock their refrigerators than their bookshelves, he said.
“It could be a big hit,” Robinson said, before reopening his store Thursday. “We’re certainly hopeful that this coming weekend people will be able to get out and about and that cabin fever is going to drive people out into the world.”
Airport shops also felt the pain, as Reagan National and Dulles International closed runways for three days. Wendy Rukmini Walker, who owns As Kindred Spirits shops at National and in Bethesda and Rockville in Maryland, estimated that she lost 10 to 15 percent of her monthly revenue. That’s in addition to what she spent to get employees to work by taxi when Metro wasn’t operating.
Walker said she’ll have to pay her landlords and employees first. Her suppliers might have to wait.
“It just hurts everyone right down the line,” Walker said. “Maybe we’ll have to cancel orders or explain to people why they can’t get paid.”
Lori Aratani, Antonio Olivo, Arelis Hernandez and Patricia Sullivan contributed to this report.