Tepper School Experts Discuss Economic and Operational Impact of the Solar Eclipse

As the United States prepares for the solar eclipse on April 8, cities and towns in the path of totality are preparing for an economic bump and bracing for operational challenges due to the influx of visitors. The Pittsburgh region will experience a partial eclipse, while Erie, Pennsylvania, two hours north of Pittsburgh, is set to experience a total eclipse. Laurence Ales, Professor of Economics, and Sridhar Tayur, Ford Distinguished Research Chair and University Professor of Operations Management from Carnegie Mellon University’s Tepper School of Business, answered questions about the economic and operational impact of the eclipse.

While Pittsburgh is not directly in the path of totality, the region is still poised to experience an economic bump. How does the eclipse impact local businesses, especially hotels, dining, and retail?

Ales: I could see Pittsburgh play the role of a gateway city. Folks may travel to Pittsburgh on their way further north to reach the path of totality. In this case, the benefits will be mostly connected to transportation, like incoming flights into Pittsburgh and perhaps some local lodging. 

How meaningful is the eclipse to small-town businesses in the path of totality compared to big-city businesses in terms of economic impact?

Ales: Economically, for smaller towns, this will be a small event. The bulk of the benefits I anticipate will go to local residential owners who are sharing their property, like Airbnb and Vrbo. Looking at a map in the days leading up to the eclipse shows almost full capacity utilization for rental properties along the path of totality. 

Could the eclipse be bad for business? If clouds and rain are forecasted and fewer people flock to a city than expected, is there a chance that those businesses could lose money? For example, stores may have purchased t-shirts, eclipse glasses, and memorabilia, what happens if customers don’t buy them?   

Ales: Bad for business? I don’t think so, and there are no refunds issued by celestial bodies! Besides, the experience of total darkness will be worthwhile even if the sky is cloudy.

The City of Erie issued a news release sharing its preparations for an influx of 56,000 to 200,000 visitors. City officials are implementing comprehensive plans to manage expected gridlocks, closing schools, shutting down streets, and setting up no-parking zones to manage traffic. Emergency services are ramping up staffing and resources to deal with the heightened demand, ensuring public safety amidst the crowds.

What should people expect who are traveling to cities and towns in the path of the eclipse? 

Tayur: Unlike the eclipse in 2017, the path is close to many medium and large size cities, rather than being much more interior in rural America. Travel may be more by air for people living farther away and less by road, except for those who live close by but just outside the main path. This means, that in places like Indianapolis, the airports may have long lines compared to what they are used to seeing.

What about preparations in small towns that don’t have all the resources of big cities?

Tayur: Many of the smaller towns are not far from a large enough town, so I expect the impact to be muted compared to 2017. On the other hand, the next total eclipse is in 2044, so the total volume of travelers may be much larger.

With Pennsylvania playing a significant role as both a destination and a passageway for eclipse viewers, the event promises to leave a mark on local economies and communities.