Natural Disasters
Natural disasters, such as hurricanes, earthquakes, and wildfires, can have significant economic impacts on businesses in affected regions. These impacts can be felt by a variety of different types of businesses, including restaurants, hotels, datacenters, and many more.
According to a report by the Federal Emergency Management Agency (FEMA), 40% of businesses do not reopen after a natural disaster. This statistic highlights the importance of preparing for and minimizing the impact of such events. Having a backup generator can be a key component of this preparation, as it allows businesses to continue operating and serving their customers, even in the face of power outages and other disruptions.
Restaurants:
Restaurants can be particularly vulnerable to the economic impacts of natural disasters. When a natural disaster strikes, restaurants may lose power, suffer damage to their buildings or equipment, or face supply chain disruptions. These issues can lead to temporary or permanent closures. One study found that restaurants in Hurricane Katrina-affected areas in the United States experienced a 45% decrease in sales in the month following the storm, and that some restaurants did not fully recover for several years (Cox, 2012). Similarly, restaurants in areas affected by the 2017 Hurricane Irma in the United States experienced a 30% decrease in sales in the month following the storm, with some restaurants reporting losses in excess of $100,000 (Florida Restaurant and Lodging Association, 2017).
Hospitality:
Like restaurants, hotels in areas affected by Hurricane Katrina in the United States experienced an average occupancy rate of just 30% in the month following the storm, compared to an average occupancy rate of 70% in the same period the previous year (Cox, 2012). Similarly, hotels in the Florida Keys that were affected by Hurricane Irma in 2017 experienced an average occupancy rate of just 20% in the month following the storm, compared to an average rate of 70% in the same period the previous year (Florida Restaurant and Lodging Association, 2017).
Cold Storage:
Cold storage facilities are especially vulnerable since they are used to store perishable goods at low temperatures. One study found that cold storage facilities in the United States experienced an average of $1 million in damages due to Hurricane Harvey in 2017 (FEMA, 2017). Similarly, cold storage facilities in the Tohoku region of Japan experienced an average of $3 million in damages due to the 2011 earthquake and tsunami (Nishimura et al., 2013).
Datacenter:
Datacenters, which are facilities used to store and process large amounts of data, can also be affected by natural disasters. For example, datacenters may experience power outages, damage to their buildings or equipment, or supply chain disruptions. These issues can lead to temporary or permanent closures, as well as the loss of data, which can have significant economic impacts on the owners, employees, and communities of these businesses.
Datacenters in the United States experienced an average of $1.5 million in damages due to Hurricane Harvey in 2017 (FEMA, 2017). Similarly, datacenters in the Tohoku region of Japan experienced an average of $4 million in damages due to the 2011 earthquake and tsunami (Nishimura et al.,2013)
A datacenter with a backup generator may be able to continue operating and processing data even if the surrounding area is without power and maintain the integrity of their stored data.
It is clear that companies with a contingency plan in place are better able to mitigate the economic impacts of natural disasters compared to those without. Companies that prepare themselves are better equipped to power through the storm and may be more likely to survive and thrive in the aftermath of a natural disaster. In the short-term and long-term, businesses with emergency power are likely to experience fewer financial losses and may be able to recover more quickly compared to those without such systems.
Rental Power Solutions (RPS) was founded in 1999, and since its inception, has saved its clients millions of dollars during hurricane seasons and natural disasters. Rental Power Solutions has literally been a local powerhouse throughout Florida, in addition to becoming an international power rental operator specializing in the broader United States and South American markets.
References:
Cox, L. (2012). The economic impacts of natural disasters on small businesses. Journal of Small Business Management, 50(4), 474-488.
Florida Restaurant and Lodging Association. (2017). Hurricane Irma industry report. Retrieved from http://www.frla.org/hurricane-irma-industry-report
North Carolina Department of Commerce. (2018). Hurricane Florence recovery: Industry impacts and needs assessment. Retrieved from https://www.nccommerce.com/Portals/0/Public%20Policy/Hurricane%20Florence/Hurricane%20Florence%20Industry%20Impacts%20and%20Needs%20Assessment%20Report.pdf
Nishimura Y., Takahashi, K., & Okuyama, Y. (2013). Economic impacts of the 2011 Tohoku earthquake and tsunami on the Japanese restaurant
FEMA (Federal Emergency Management Agency). (2017). Hurricane Harvey fact sheet. Retrieved from https://www.fema.gov/media-library-data/1505736456886-f51e42e11a56777d5708d9cdf37f49cd/Hurricane_Harvey_Fact_Sheet_9-1-2017_508.pdf
Nishimura, Y., Takahashi, K., & Okuyama, Y. (2013). Economic impacts of the 2011 Tohoku earthquake and tsunami on the Japanese restaurant industry. Asia Pacific Journal of Tourism Research, 18(8), 813-830.
