Contemplating Recession at the Edge of the World
Two hours away from Washington D.C., small rural businesses are finding out that urban COVID problems are their problems, too.
An hour and a half should be enough to get you from Washington, D.C. to the very edge of the Washington metro area. Winchester and Front Royal, Virginia, are the last two sizable towns before you enter the different world of West Virginia. While neither lockdowns nor COVID cases were ever as intense here as inside the Beltway, this urban-rural intersection—featuring seemingly independent small towns and genuine countryside—is broadly affected by the downturn because it has relied so heavily on city visitors and their investment in the region. So, even far away from the hot spots, we can sense possible trends in the post-COVID economy.
Hugging the north-south Interstate 81, Middletown, Stephens City, and a few smaller towns cluster in between Winchester and Front Royal. Winchester, featuring a pedestrianized downtown, is an underrated example of classic architecture and streetscape. This area does have distinct, local sources of economic growth, including agriculture, government employment, and even manufacturing. But the region also serves as a countryside escape for many metro-area vacationers and daytrippers, as well as, increasingly, the final “ring” of commuter exurbia. It’s less of a day trip destination in these times. This is a little preview of what that might mean.
Anecdotally, most of my friends outside of the D.C. area are going out and about close to normally, while many within the region are not ready to dine out or gather in person with friends. D.C.-area businesses, particularly restaurants, seem to have fared well enough; I was only able to find two that were still closed on a recent drive down the area’s U.S. Route 1 corridor. But the customers keeping these establishments afloat with takeout orders are mostly not daytripping or vacationing anywhere else.
One affected business, Pembroke Springs Retreat, is a unique Japanese-themed bed and breakfast with hot springs and minimalistic rooms, nestled in the Blue Ridge foothills, 20 minutes from the nearest store or restaurant. From the wrap-around porch of the cozy five-room house, one cannot hear so much as a distant car engine. Smartphones pull in a weak signal, at best. The darkness is enveloping, the silence total. Insects are out in droves, so ubiquitous that they quickly become an inoffensive piece of the landscape. It is a matter of debate whether such a setting is worth a four-hour round-trip commute into the city, but the folks who board a 4:45am D.C.-bound bus in Front Royal, for example, very much believe it is.
Lisa Floyd, a former catering director and hospitality manager, is the general manager of Pembroke Springs Retreat. Opened in 2001 by her parents, a foreign service officer and his Japanese wife, it’s become a part of the sparsely populated area’s economy. Guests engage in outdoor activities like horseback riding and hiking, or patronize restaurants and boutiques in Winchester and a couple of smaller towns nearby. The inn occasionally draws Japanese travelers and D.C.-area international students, often Chinese—a single guest’s positive post on Chinese social media can spark a burst of such bookings—but its bread and butter are affluent metro-area families looking for a break. Very little of Floyd’s business is local, which is common for inns, though most are more pedestrian than this one. (My own guess is that while most locals probably find the inn too familiar, others may find it too exotic. A horseback riding instructor we rode with said he’d heard of the inn and found it interesting, but he didn’t fancy sushi for breakfast. I didn’t tell him that the fish at breakfast is actually cooked.)
In any case, the survival of the inn relies on a steady stream of guests from Washington, D.C. and the surrounding suburbs. Neither this, nor the international travelers or students, will come back to pre-pandemic levels for a long time. In addition, Floyd has chosen to reopen very cautiously after a full closure that went beyond government mandates. Pembroke Springs Retreat has not received any government assistance either, whether local or federal. The pandemic has been much more than a bump in the road, and it’s not obvious that the inn’s business will ever quite be the same. This can be said for many surrounding businesses too. Nearby Middletown, home to just four non-chain restaurants pre-pandemic, has already lost one; it happens to be the one where my wife and I ate dinner during one of our own weekend retreats out this way. The possibility of a cascading economic contraction cannot be discounted.
In some places, like closer-in Middleburg, Virginia, local governments have enacted their own small business relief programs. Middleburg’s program, however, required the businesses to be operating; and it also likely required a critical mass of population that is lacking in the rural stretches of Pembroke’s Frederick County. There’s also the dynamic—my observation, not Floyd’s—that liberal reopening policies have put the most diligent business owners at a competitive disadvantage, forcing them to either put themselves and their customers at risk or forego profits that competitors are scooping up.
However, Floyd noted that inns have been exchanging advice on reopening. Small business is obviously competitive, but it also must have an element of cooperation. Places like Frederick County, with relatively fewer chains, fewer people, smaller governments, and less wealth than the core of the metro area, are not top-down economies running on suburban growth or the welfare state. Their economies are, largely, local networks of commerce, with a more personal touch. But they are still not fully independent, or else the spending and traveling habits of metro residents would make no difference.
This is all a fascinating reminder that small towns and rural countrysides are not idyllic other worlds, but satellites of their surrounding cities. Efficiently moving agricultural products from farms to cities was a major reason for building modern roads in the early 20th century. The thriving of these rural places relies largely on the flow of dollars from the city out to the edges. Thus, in its way, the success of Pembroke Springs Retreat or Winchester’s boutiques is connected with the thriving of the “imperial city” and even with the explosion of globalization.
There is something almost wondrous about college students from China supporting rural American businesses, and those who see elite college towns as belonging to a lesser or less authentic America have probably not considered things like this. The concentration of wealth in superstar cities can be extractive, but it can also be additive. Many a military-industrial complex dollar makes its way out to more remote places, sustaining new sources of productive enterprise. There is always an element of complexity and emergence in things like this—and always a temptation to look at the economy with the arrogant certainty of the Soviet planner. That the economic diminution of the D.C. area would likely hurt its surrounding rural communities suggests no particular policy, but it does recommend humility.
Other businesses face a deeper problem than shutdowns or reticent customers. Bill, who runs and owns Rocking S Ranch outside of Winchester, is one. His problem is also an opportunity; the land on which he takes people riding—again, largely groups of tourists—is worth a lot of money. The phenomenon of real estate values outstripping the value of existing businesses as going concerns is a fundamental mechanism of urban development. It is often the only way for people like Bill to retire in comfort.
For those who prize rural places as such—or those who simply decry the fact that amber-encased first- and second-ring suburbs have forced new housing growth further and further out—there is something sad about this. Sometimes, to make it sadder, land value is not the only consideration. The children of business owners, enabled by their parents’ success, often seek a more rarefied and flexible life than the sisyphean work of maintaining a business. Selling the business itself is either impossible or far less profitable than selling the land. This is one reason why relatively low-margin, land-heavy establishments like garden centers, old motels, and kiddie amusement parks are some of the first places to sell as development inches outward. It’s an offer the owners can’t refuse, and that’s not necessarily a bad thing.
If real estate markets in more remote places or at the edge of suburban development hold up, more of these businesses may opt to sell sooner rather than later. This can look like decline and development at the same time. It is worth noting that this kind of intentional closing-up is not failure, let alone bankruptcy. It is even possible that non-urban land values will rise—meaning that COVID will have delivered a windfall to aging business owners who were already looking to cash in. Not likely, perhaps. But nothing this year has been likely, and no doubt many small-business entrepreneurs are betting men.
Whether these businesses out at the edge of the D.C. metro area reopen, shut down, or sell, their owners deserve admiration. Whether it’s the trails and fences at Rocking S Ranch or the hot springs and guest rooms at Pembroke Springs Retreat, keeping places like these in order entails endless work. Making them fun, relaxing, and welcoming is a vocation. The better that such work is done, ironically, the more invisible it is and the more effortless it appears.
A stiff window or a rusty fixture is everyday life for a homeowner; for an innkeeper, it can be a casual negative review with material consequences. Meeting the rising expectations of consumers is difficult enough in ordinary times. Every small business owner who makes it through the COVID crisis, particularly those who make real sacrifices for the safety of their employees and customers, are role models. Many chains have the ability to simply absorb temporary losses, while others shut down locations at the first sign of trouble. Small business owners, having invested their lives into their enterprises, rarely have either option available. Whatever their fate in our ongoing crisis, they are an irreplaceable part of our American life.