All posts by gufengren2020

Walgreens’ weakness can continue during painful post-COVID recovery, analysts say

By Henry Ren
Medill Reports

Walgreens Boots Alliance Inc. has traded near a seven-year low since executives said in early April that comparable sales started to decline due to the coronavirus pandemic, reflecting Wall Street’s concerns about the company’s post-shelter-in-place recovery in what is likely a recession.

Walgreen’s comparable sales rose 26% in the first three weeks of March as U.S. consumers stockpiled prescriptions and cleaning products, Chief Financial Officer James Kehoe said during the second-quarter earnings conference call on April 2. However, comparable sales shrank after March 21, when stay-at-home orders were enforced across the U.S.

“We are confident that this is a temporary situation, and we would expect to see some stabilization of sales trends over time,” Kehoe said.

However, some analysts are worried that the weakness of in-store purchases may pose significant challenges to Walgreen’s domestic and international sales over the coming months.

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Suburban Airbnb pivots to long-term renting after coronavirus hit

By Henry Ren
Medill Reports

Panic crept in as Airbnb host Samuel Szobody lost $48,000 worth of guest bookings in the two weeks that followed Illinois Gov. J.B. Pritzker announcing a statewide lockdown on March 20.

“From April through June, all my calendars just went completely empty,” he said.

Szobody manages nine Airbnb listings in the Chicago suburbs including Aurora, Schaumburg, St. Charles and Waukegan. Like many other Airbnb hosts, he rents houses from landlords, furnishes and sublets them on short-term rental platforms such as Airbnb, Vrbo and Booking.com.

Instead of lowering the price to attract short-term renters, Szobody raised the price to up to $300 a night but offered a 15% monthly price discount for his five-bedroom Schaumburg house. He even encouraged travelers who booked before the pandemic to cancel their short-term stays by offering full refunds which allowed him to have guests seeking month-long stays, he said.

“We have a huge opportunity to host people for the long term,” Szobody said. “I’m doing long-term booking only.”

As short-term Airbnb renters curbed business and vacation trips after the pandemic hit, suburban Airbnb hosts like Szobody pivoted to long-term renting to make up for the loss. An average guest now stays for more than a month in his rentals compared to a previous average of 2.5 days.

While travelers tended to avoid Airbnbs in March in the city of Chicago, an early hot spot of coronavirus infection, suburban and rural Airbnbs in the greater Chicago area thrived. According to AirDNA LLC, a market-research firm that analyzes Airbnb bookings, Airbnb revenues in March doubled year-over-year in Michigan City, Indiana, and tripled in Waukegan, Illinois, while Chicago shrank 11%.

“Travelers [were] fleeing urban centers and heading towards homes just outside the city,” an AirDNA report on non-urban short-term rental markets wrote.

Junqing Qiao, a doctoral candidate at Massachusetts Institute of Technology, fled from his student apartment in Boston in late March, fearing the coronavirus might spread through the apartment’s central air conditioning system. He spent the last two months in a lakeside Airbnb chalet close to North River, New York.

“I don’t see any people from the three-story chalet,” Qiao said. “It’s happy though lonely to stay in a rural Airbnb.”

Szobody was prepared to host urban travelers like Qiao who sought shelters to hunker down in the midst of the pandemic. He stocked houses with six-month supplies of toilet paper and cleaning products.

Szobody purchased an ozone generator with UV light filtration for every one of his Airbnbs. Installed on a smart outlet, the ozone generators can be controlled remotely on Szobody’s electronic devices. High levels of ozone will be used for 12 hours to kill microorganisms after a guest checks out, he said.

“We did everything we could to make our homes into ‘safe havens,’” Szobody said.

With supplies stocked and ozone generators ready, Szobody’s nine houses are fully booked until July. The occupancy rate of his suburban Airbnb portfolio increased from 70% before to more than 85% in June, he said, which means his Airbnbs are empty three out of 20 nights versus three out of 10 nights prior to the pandemic.

Apart from shelter seekers, Szobody was called by house insurance adjusters who want to move clients into Airbnbs for months while fixing their homes.

Ousama Issa has stayed at Szobody’s Schaumburg house since April 19. The house is the third accommodation that Issa’s family of four has resided in since State Farm started investigating a leaking roof at Issa’s home in December 2019. As the pandemic prolonged the fixing process, the family extended the stay at Szobody’s Airbnb until July, Issa said.

Short-term rental marketplaces like Airbnb are winning new customers like insurance adjusters because most hotels are closed during the pandemic, Szobody said.

“When hotels come back online, insurance adjusters are going to stick with short-term rentals because they offer better amenities for customers at a lower price,” he said.

Although the long-term renting discounts dragged Szobody’s revenues down 20% in April from pre-pandemic predictions, Szobody profited about $10,000 in April because costs dropped 40%. Cleaning costs fell as Airbnbs do not need to be cleaned during longer guest stays, Szobody said.

Alex Khokhari, Szobody’s co-host and housekeeper, said he cleaned once or twice per house in April, compared with about 10 times per house before the pandemic.

To retain five part-time housekeepers, Szobody pays them for one housekeeping visit per week for bookings of more than 14 days.

“If my business is covering its costs, it’s not right for my housekeepers to be suffering,” he said.

Airbnb hosts’ pivot to long-term renting will continue if Americans remain uncomfortable about traveling, hospitality industry experts said.

“Domestic travel is not really likely to bounce back for at least the next three to six months,” said Makarand Mody, an assistant professor of hospitality marketing at Boston University. “While travelers are away, the only way that Airbnb hosts can still make money on their properties is by putting them on the medium- and long-term rental market.”

To win customers during and after the coronavirus lockdown, Chris Anderson, a Cornell professor of service operations management, said Airbnb hosts need to have facilities that make social distancing easy.

“What’s going to do well for Airbnb [guests] is a mix that provides safety, security, comfort, distancing and sanitation,” he said.

Anderson’s comments were echoed by Szobody, who is looking for property owners in the Chicago suburbs to fill all the long-term renting inquires.

“If short-term rental businesses are able to pivot, and if they are able to create safe, sanitized and stocked spaces for people to stay in and offer big discounts for [stays of] 30 days or more, they will be profitable again,” he said.

Photo at top: The five-bedroom Schaumburg house that Samuel Szobody rent to the family of Ousama Issa. After the pandemic hit, Szobody raised the price per night but offered large monthly discounts to attract long-term renters. (Courtesy of Samuel Szobody)

Travelers struggle to get refunds after canceling flights amid coronavirus pandemic

By Henry Ren
Medill Reports

Genie Schwartz canceled her late April flight from West Haven, Connecticut, to Wilmington, North Carolina, as the Centers for Disease Control and Prevention urged Connecticut residents to eliminate non-essential travels in late March. She then called American Airlines to refund her $400 airfare, only to be offered a travel voucher valid until December 2021.

“I don’t know when it will be safe to travel again,” Schwartz said. “I would really like my money back.”

The 73-year-old had also scheduled a trip to London in mid-May through a local travel agent. The agent had canceled all of Schwartz’s trip reservations and the travel insurance, except for the flights with Delta because the agent was waiting for Delta to cancel the flight.

“If Delta doesn’t cancel, again, I’m stuck,” Schwartz said.

Like Schwartz, thousands of travelers are unable to get cash refunds from major U.S. airlines after proactively canceling their flights amid the coronavirus pandemic. For compensation, they are offered a full travel credit usable in one to two years, depending on the airline.

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From China to the US: Tracking 14 days in exile

By Henry Ren
Medill Reports

Two days after Xu Wu retrieved his passport in Shanghai, the Silicon Valley software engineer boarded a plane to Cancún after a 21-hour overnight layover at Frankfurt Airport. It was Feb. 18, just over two weeks after the Trump administration barred the entry of foreign citizens who had visited mainland China in the 14 days prior to the travel ban.

On the same day, Mrs. Li, who asked we identify her by the last name only,  went to the U.S. Embassy in Barbados to renew her visa. The 30-year-old Chinese woman works in Miami. Yida Yao, a research assistant at the University of California, Berkeley, was anxiously waiting for his Thai visa to be issued. Steven Li, a visiting undergraduate student who now studies in Boston, asked multiple airline companies whether he could travel with a passport issued in Hubei, the center of the coronavirus outbreak.

Thousands of Chinese nationals who planned to travel to the U.S. for work or school were stuck in China due to the travel restriction and these four were among them. To circumvent the restriction, they would have to travel and stay in a third country for 14 days to qualify for entering the U.S

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Zoom shares up 7% amid strong earnings and coronavirus concerns

By Henry Ren
Medill Reports

Shares of Zoom Video Communications Inc., the company known for its videoconferencing platform, soared 7% Thursday as concerns over the COVID-19 outbreak intensified and the company reported quarterly earnings that beat expectations.

Backed by stronger demand for videoconferencing products as more companies and their employees work remotely, Zoom’s stock price has risen 84% this year so far. At the same time, the S&P 500 has fallen more than 6%.

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Illinois braces for potential coronavirus outbreak

By Henry Ren
Medill Reports

Illinois is preparing for a potential coronavirus outbreak after the Centers for Disease Control and Prevention warned on Tuesday that some spread of the virus in the U.S. is expected.

Coronavirus cases have been confirmed in 53 countries, infecting more than 6,000 people outside of China, according to the World Health Organization situation report on Saturday. In the U.S., the CDC confirmed the first COVID-19 death in the Seattle area, while California, Oregon and Washington State have identified four cases of unknown origin, indicating that the virus could be spreading within U.S. communities.

In reaction to CDC’s Tuesday announcement, the Illinois Department of Public Health released a statement this week stating that Illinois was taking “all preventative steps available” to limit the spread of coronavirus, though the current risk remained low.

“While COVID-19 is not spreading in communities in Illinois or the U.S., there is evidence of community spread in several countries around the world and IDPH is committed to working across local, state, and federal agencies to ensure Illinois is prepared,” the statement said.

As of Saturday night, Illinois has identified three coronavirus cases, two involving a couple where one spouse had been exposed abroad. They have recovered and are released from home isolation, while the third patient has been hospitalized in isolation, according to IDPH. The third case was considered “presumptive” as of Saturday and is awaiting CDC confirmation.

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Research hub at Northwestern powers next-generation solar cell research

By Henry Ren
Medill Reports

Next-generation solar cells might power personal electronics such as watches and backpacks that could recharge your cell phone.

These solar cells are being tested and prototyped in a research hub launched this year by the Institute for Sustainability and Energy at Northwestern University.

The ISEN research hub, named Glovebox Inert Atmosphere (N2) Thin-film Fabrication and Testing or GIANTFab, allows academic and commercial users to explore new materials for solar cells in a set of connected and airtight glove boxes that eliminate air interference. The goal is to find more efficient alternatives to expensive and rigid silicon solar cells, a game-changer for solar energy.

The GIANTFab is the only publicly accessible user facility in Chicago that offers a one-stop solution for users to both build and test solar cells without the interference of the air, said Nathan La Porte, ISEN’s Operations Director of the GIANTFab. Continue reading

The Doomsday Clock sends a message: The world is closer to catastrophe than ever since World War II

By Henry Ren
Medill Reports

The hands of the Doomsday Clock moved to 100 seconds to midnight on Thursday, indicating that the world is closer to catastrophe than ever since The Bulletin of Atomic Scientists debuted the symbolic clock in 1947.

The Bulletin announced the move to 100 seconds from a mere 2 minutes to midnight in the annual resetting of the clock based on the threats of nuclear disaster, climate change and disruptive technologies.

“We now face a true emergency — an absolutely unacceptable state of world affairs that has eliminated any margin for error or further delay,” said Rachel Bronson, president and CEO of the Bulletin.

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