COVID five years later: How the pandemic changed the way PA does business

From closures and contact tracing to streeteries and relief subsidies, the COVID-19 pandemic and its aftermath changed not only our daily lives for years to come but also how – and why – people live, work and play in a new age of hybrid work. 

Public transportation and restaurant usage has come back up but still trail pre-pandemic numbers, while online sales and the shift away from brick-and-mortar stores have continued to reshape downtowns and shopping centers. 

As part of City & State’s ongoing coverage of COVID-19’s lasting impact, business leaders provide first-hand accounts of how work life has changed since the commonwealth and the world came to a standstill five years ago.

Below are business-focused conversations with Khine Zaw Arthur, president and CEO of the Asian American Chamber of Commerce of Greater Philadelphia; Eric Goldstein, president and CEO of King of Prussia District; Alex Halper, senior vice president of government affairs for the PA Chamber; and Joe Massaro, president and CEO of the Pennsylvania Restaurant & Lodging Association. 

The conversations have been edited for length and clarity.

How did the COVID-19 pandemic and pandemic-era policies change the way Pennsylvanians do business?

Eric Goldstein: The pandemic affected our organization in several ways. Two of the most notable are: First, prior to the pandemic, we ran an employee shuttle bus system in King of Prussia. That was permanently discontinued after regulations required limited capacity ridership. That resulted in commuting behaviors that ultimately made the shuttle system ineffective. We also were required to end several of our in-person events and switch to virtual formats. After the pandemic, business networking events remain difficult to fill, with many employees still working in hybrid or remote capacities.

Alex Halper: The pandemic accelerated shifts in consumer behavior, with more reliance on e-commerce and online services. Many Pennsylvanians embraced the gig economy – both wage-earning opportunities and the convenience as customers … Some sectors, including the hospitality industry and brick-and-mortar retailers, have yet to fully recover, with workforce shortages and changing consumer habits exacerbating things.

Joe Massaro: The COVID-19 pandemic and the policies that followed led to long-term shifts in the way Pennsylvanians do business, particularly in the hospitality industry. Many of these changes appear to be permanent, shaping both consumer behavior and operational challenges. The restaurant industry has seen a shift where the dining experience itself is now a bigger draw for consumers than price, according to the National Restaurant Association’s latest State of the Industry Report. Consumers continue to seek unique experiences and socialization, while at the same time, younger generations are fueling demand for takeout and delivery. However, operators still face significant challenges, including ongoing workforce shortages, rising food and labor costs, and supply chain disruptions that continue to pressure the bottom line. Traveler behavior has evolved on the hotel/lodging side. Economic pressures and rising costs continue to impact both leisure and business travel, but we’ve seen a growing trend toward experience-driven tourism over traditional destinations. Ultimately, the pandemic fundamentally reshaped the landscape of Pennsylvania’s hospitality industry. 

What was the impact of the COVID-19 pandemic and pandemic-era policy on entrepreneurship and small businesses?

Khine Zaw Arthur: In short, many of our businesses have not fully recovered from COVID lockdowns. From Chinatown to the Northeast, Manayunk to South Philly, not only from a revenue standpoint but also in terms of foot traffic, they have yet to see their pre-COVID business growth coming back. Not to mention, the steadily rise in cost of living, goods and services, crime  – retail theft to looting where our members feel that the perpetrators are not being held accountable for their actions – and street safety issues have led to shorter business hours and difficulty in hiring staff, and availability of raw materials and products, are all affecting our businesses. 

JM: The impact of both the pandemic and polices were profound on hospitality businesses. Many business owners faced difficult decisions, with thousands of restaurants nationwide shutting down during and after the crisis. At the same time, the industry’s resilience and creativity led to innovation and adaptation. Some entrepreneurs shifted business models by expanding takeout, partnering with third-party apps, or embracing outdoor dining, allowing them to survive despite the circumstances.

How did the commonwealth handle business closures/reopenings, policy and financial assistance to businesses compared to other states?

AH: Pennsylvania’s business closures were among the strictest in the nation, creating unnecessary uncertainty and hardship, particularly for small businesses.  An Auditor General report later confirmed the perception that Pennsylvania’s approach was deeply flawed … While federal aid helped many businesses stay afloat, Pennsylvania could have done a much better job providing clear, consistent guidance and a more transparent reopening process.

JM: Pennsylvania’s approach to business closures and reopenings was among the more restrictive in the country, particularly for the hospitality industry. While all businesses faced challenges, restaurants, hotels and event venues experienced some of the longest-lasting restrictions, with Philadelphia and Pittsburgh operators navigating even stricter policies than other parts of the state. This all led to competitive disadvantages. For example, Philadelphia’s catering businesses often lost events to New Jersey or nearby counties that had less restrictive policies. States that adopted more flexible reopening strategies often saw faster economic recoveries. State and national financial assistance programs provided some relief but often fell short of fully addressing the needs of the industry. The hospitality industry continues to feel the effects of these policies, but operators have demonstrated resilience and adaptability as they work toward long-term recovery.

What are the downstream effects of the widespread shift to remote work on municipalities, real estate, and/or tax revenues? How has this manifested differently in urban versus rural regions of the commonwealth?

AH: Remote work has reshaped downtown economies and reduced foot traffic, affecting small businesses and commercial real estate values declining in urban centers – Harrisburg and  Pittsburgh are great examples of this. There was some discussion about rural communities being able to attract remote workers seeking a lower cost of living, but infrastructure challenges like broadband access are barriers to sustained growth in these areas.

What business lessons can be learned from how the commonwealth handled the pandemic – and how should lawmakers do things differently during another pandemic?

AH: Future crises will require a much more balanced approach: one that protects public health while minimizing unnecessary economic harm through transparent, data-driven decision-making. Pennsylvania needs to ensure businesses have more explicit guidance and more predictable support, rather than the uncertainty that defined much of the state’s COVID response.

JM: One of the biggest lessons from the pandemic is the importance of communication and collaboration between policymakers and business leaders. Decisions were made quickly, often without industry input, leading to unintended and avoidable consequences. Moving forward, ensuring that industry leaders have a seat at the table during crisis response discussions and valuing their input would lead to more balanced, effective policies. Another key takeaway is the need for more efficient deployment of relief programs. While financial assistance was available, delays and administrative hurdles made it difficult for businesses to access support when they needed it most. Ultimately, Pennsylvania’s experience highlights the need for greater coordination between government and industry.

What's your take on the continuing return-to-office efforts?

AH: Many employers recognize that hybrid work is here to stay, but there's a growing push to make downtowns more attractive through tax incentives, infrastructure improvements, and investments in quality-of-life amenities to encourage workers to return. Forcing a full return to the office isn’t a viable strategy in all cases; instead, businesses and policymakers should focus on making in-person work more appealing instead of making it mandatory.

Are there other, more creative ways of thinking about how to adapt new work patterns that emerged out of the pandemic to those same concerns around downtowns, tax revenue and real estate values?

AH: Cities are rethinking their commercial districts right now. A great example is how Reading is adapting office spaces for mixed use, converting vacant offices into residential units, and investing in public spaces to create a more vibrant downtown.

JM: The traditional workplace has evolved, and with it, so have downtowns. Instead of solely focusing on bringing workers back to traditional offices, PRLA and our members are exploring policies that encourage a balanced mix of residential, commercial, and entertainment uses to revitalize urban centers. For example, some of our members in Philadelphia have repurposed former office spaces and courtyards into hospitality gardens, event venues, and new dining concepts, demonstrating how creative adaptation can bring energy back to downtown areas. Incentivizing businesses to invest in flexible workspaces, supporting local hospitality and retail through events and tourism initiatives, and repurposing office buildings for mixed-use development are all ways to drive foot traffic and economic activity. Hospitality and tourism are critical to community development, and our industry is eager to be part of these discussions. A vibrant downtown benefits workers, businesses, and residents alike.