- The Covid-19 pandemic has caused economic recession worldwide, primarily due to government intervention that has closed or restricted operation of places of business and recreation where people congregate. The resulting increase in unemployment has decreased consumer spending, which has led to an accelerating depressing effect on the economy. In addition, people have made personal decisions to practice social distancing, which has further reduced the income stream of many places of business and recreation.
- Social dance activities, which are nonessential and bring people into close proximity, in particular have been negatively impacted by the spread of the coronavirus, due to both external (governmental) and internal (personal) constraints. Tango social dance events have nearly ceased to exist during the pandemic, most likely because, among all social dances, tango brings people into the closest physical contact.
- An examination of the types of tango social dance activities and the variety of facilities hosting these activities in the United States provides the background for understanding the impact of the Covid-19 economic recession on the viability of these different institutions in surviving the pandemic.
- The types of tango social dance activities that usually occur in tango communities are classes, workshops, practicas, milongas, tango weekends, marathons, and festivals.
- The facilities that have been used for hosting tango activities include dance studios, houses of worship, fitness centers, coffee houses, bars, restaurants, banquet halls, night clubs, community centers, museums, art galleries, libraries, bookstores, fraternal and veterans’ organizations, social clubs, convention centers, hotels, and colleges and universities.
- Weekly tango classes most often have been held in dance studios, houses of worship, community centers, and colleges and universities.
- Milongas most often have been held in dance studios, houses of worship, restaurants with banquet rooms, community centers, and colleges and universities.
- Evaluation of the vulnerability to financial failure (i.e. permanent closure) of the various institutions supporting tango social dance activities can indicate the risk of failure of tango community revival after subsidence of the Covid-19 pandemic. This involves an examination of the sources of income and common expenditures of these institutions.
- Sources of income evaluated are (a) sale of consumable products, (b) fees for service, (c) membership fees, (d) charitable contributions, (e) grants and contracts, (f) return on investment, (g) rental income, and (h) government allocations.
- Expense categories evaluated are (a) property expenses, (b) loan payments, (c) equipment, (d) operating supplies, (e) utilities, (f) payroll, (g) contracts for service, (h) purchase of products for sale, (i) income taxes, and (j) sales taxes.
- For most institutions, property expenses (mortgage/rent, property taxes, property insurance) are high and fixed, regardless of the level of activity at a facility. Loan payments comprise a large expenditure commitment for many institutions.
- Nonprofit organizations [IRS 501(c) tax classification], (e.g., houses of worship, educational institutions, social clubs, fraternal organizations, veterans’ organizations, publicly owned community centers) are exempt from paying income taxes and property taxes, which decreases their vulnerability to some degree. However, colleges and universities in particular maintain high payroll and property maintenance commitments that could threaten their viability.
- The Covid-19 recession has had a devastating impact on the infrastructure supporting social dance activities. Facilities hosting tango social dance activities that have closed permanently or are likely to close permanently due to financial complications caused by the Covid-19 pandemic are dance studios, bars, restaurants, banquet halls, night clubs, coffee houses, bookstores, fitness centers, private museums and art galleries, houses of worship, some fraternal organizations, privately owned convention centers and hotels, and small private colleges and small regional public colleges.
- Tango communities dependent upon failed facilities for their social dance activities are at risk for extinction if they cannot find suitable alternative facilities for hosting their events upon subsidence of the pandemic. The replacement facilities need to continue to attract dancers to the events hosted in these locations.
- Facilities hosting tango dance activities that are relatively immune to permanent closure as a result of the Covid-19 pandemic include large colleges and universities and publicly owned community centers.
- Tango communities that have utilized these more financially stable institutions for their tango social dance events are more likely to survive the interruptions of the Covid-19 pandemic, all other things being equal.
- Loss of tango community members due to high normal turnover and lack of social and educational reinforcement during a prolonged pandemic are all factors that also contribute to tango community extinction associated with the Covid-19 pandemic. These effects are magnified for small tango communities.
- All tango communities will need to focus on recruitment and retention of community members upon subsidence of the Covid-19 pandemic.
Worldwide spread of the novel coronavirus (SARS-Cov-2) and the disease it causes (known as Covid-19) have resulted in governmental interventions designed to minimize the transmission of this deadly virus. Government recommendations and mandates have prescribed social distancing, wearing of face coverings, frequent hand washing, and limiting the size of social gatherings to mitigate the impact of the Covid-19 pandemic. As a result of these policies, certain institutions have been targeted directly for closure or restrictions in operation (e.g., educational institutions, bars and restaurants, fitness centers, houses of worship, community centers), mainly because of high event attendance, high population density, and frequent intermingling of event attendees. The resulting curtailments in facility operations have caused massive employee layoffs and, as a consequence, economic recession, manifested in decreased consumer demand, which has further negatively impacted the financial status of institutions upon which restrictions have been placed.
As a result of the imposed public health measures and their economic consequences, as well as personal decision making based upon knowledge of the epidemiology of the coronavirus, social dance activities have been severely curtailed. This has been particularly evident for tango social dance activities, such that in-person tango dance instruction and social dance gatherings, which have become nearly non-existent worldwide during the Covid-19 pandemic, in part because it is recognized by participants that the close physical contact between partners in tango dancing creates a particularly high risk of coronavirus transmission. In person tango dance events have been replaced to some degree by online instruction and ‘virtual milongas‘, but these fail to provide the reinforcement gained through in-person social interaction with other dancers.
The economic impact of the Covid-19 pandemic has placed many institutions providing facilities for tango social dance activities at risk for financial failure and therefore permanent closure. This collapse of the tango social dance infrastructure could result in some tango social dance communities, upon subsidence of the Covid-19 pandemic, becoming unsuccessful in finding suitable alternative sites for hosting tango activities and this, coupled with loss of membership associated with the long pandemic period of inactivity, could result in the extinction of some tango communities.
A previous Tango Voice post (The Longterm Impact of the Coronavirus Pandemic on Tango) has examined the long term impact of the Covid-19 pandemic on the future of tango, focusing on the role of individual decision making in returning to tango dancing after the pandemic. This post examines the role of economic factors in causing the collapse of the infrastructure during the Covid-19 pandemic and how these factors will affect tango community revival upon subsidence of the pandemic. The focus here will be upon the United States, the epicenter of the global Covid-19 pandemic and home of one of the largest collections of tango communities worldwide.
Tango Social Dance Activities
The range of usual tango social dance activities is described below. When relevant, events are classified according to attendance as small (≤ 25), medium (26 – 50), large (51 – 100), and very large (> 100). Facility needs for each type of activity are indicated.
(1) Classes: regularly scheduled (usually weekly), taught by local community instructors; attendance is often small (≤ 25) and often comprised of the same group of individuals. Flexible seating (e.g., folding chairs) is usually adequate for seating needs (changing shoes, storing excess clothing and personal items). Food is rarely provided and attendees tend to bring their own (nonalcoholic) beverages for consumption, therefore no kitchen or concession stand is needed. Separation from other activities (i.e., in a separate room or undisturbed area) is nearly essential.
(2) Workshops: irregularly scheduled, typically taught by traveling instructors; these are often part of a tango weekend. Attendance for workshops is usually higher than for recurring classes, with many (possibly most) in the 26-50 range. There are usually workshop attendees who do not attend weekly classes regularly, and some may be from outside the immediate geographic region. Snacks and (nonalcoholic) beverages may be provided by the event organizers, and attendees may socialize around a refreshment site. Flexible seating is usually adequate for the workshop environment. Kitchen or concession facilities could be helpful for the larger attendance at workshops. Separation from other activities is essential.
(3) Practicas: are events where considerable time is allocated to dance practice, but differ from milongas in that instructional input is available to dancers. Instruction may be directed to the group as a whole, perhaps as a prelude to practice, or there may be periods of group practice interspersed with group instruction. Regardless of whether or not there is group instruction, instructors are available for consultation or, in some cases, instructors may give advice that is unsolicited. Attendance at practicas varies widely, but is usually small (< 25), except when incorporated into a tango weekend or festival. Not all attendees may be active participants throughout the duration of a practica, and attendees often arrive and leave at different times. Therefore, more comfortable seating (i.e., tables in addition to chairs) is advantageous. Proximity to a kitchen or food concession area may be desirable, although easy access to alcoholic beverages would be counterproductive given the instructional purpose of a practica. Maintaining segregation of the practica from other facility activities is still highly desirable.
(4) Milongas: are social events, with attendance of various sizes, depending upon venue, popularity, and size of the community. Seating setup is typically tables with chairs, often of a durable nature, but still movable in order to accommodate a dance floor. There is space beyond the tables for movement of attendees for the purposes of socializing. Food and beverages are almost always available, in some cases provided by the host or brought by attendees and shared, or available for purchase in a commercial establishment; it is common for alcoholic beverages to be available at a milonga, either sold by a commercial establishment or brought by the attendees. Milongas are usually held in a segregated facility, although in some cases a dance floor may be available and integrated into a commercial environment such as a coffee house, restaurant, night club, or bar. Some restaurants have separate rooms (banquet halls) that are segregated from the remainder of the establishment and these appear to be the more common sites of milongas when held in restaurants.
(5) Tango Festivals and Marathons: are very large gatherings of tango dancers (> 100) that occur over an extended period of time, usually a weekend or extended weekend (e.g., 3 or 4 consecutive days). If instruction is available, as in festivals, it is standard for there to be multiple simultaneous workshops. For milongas, multiple rooms for social dancing may be available simultaneously (e.g., to provide an opportunity to dance to tango or non-tango music). Most festivals and marathons provide space for venders to sell shoes, clothing, jewelry and other items.
Types of Facilities Supporting Tango Social Dance Activities
Listed below are the characteristics of the type of facilities most commonly used for hosting tango social dance events.
(1) Dance Studios
These are privately owned dance academies, often small to medium in size, i.e., in many cases not able to accommodate more than 50 people for a social dance event. Many have only one room designed for dancing; therefore, it is unlikely that a social dance event will have to share space with another simultaneous event, or have the presence of people not associated with the event. The most extensive use of these facilities is for teaching group classes, although private lessons may also occupy these facilities for a significant amount of time. Almost all dance studios dedicate a certain amount of time to social dance activities. Usually social dance activities are held within the same space(s) as instructional activities, with tables and chairs moved into place temporarily for social events. Some dance studios allocate a certain amount of time to activities other than partner dancing, such as line dancing, ballet, hip hop, jazz dancing, belly dancing, or fitness classes such as yoga, tai chi, or zumba, either as part of their programmatic structure or rented to outside parties. The dance studio facilities may be owned by the dance academy managers or the space may be acquired under a rental contract from the facility owner.
Dance studios dedicated to tango dancing only are rare. When tango activities are held in dance studios, they may be nested within a larger program, particularly ballroom dance (broadly defined) or Latin dances (salsa, merengue, bachata et al.), i.e., within a more inclusive programmatic structure or, alternatively, tango organizers may rent space on an hourly or event basis from the dance academy renters or owners of the facility. When tango activities are hosted within a dance studio, event size is usually small to medium (< 50), although some dance studios are large enough to host large milongas (≥ 50) and workshop weekends.
Dance studios usually lack kitchen facilities and bars, and rarely have food or beverages for sale, although at social events it is commonplace for finger foods and beverages to be available at no extra charge to attendees. Consumption of alcoholic beverages is usually permitted at social events.
(2) Bars, Night Clubs and Restaurants
Bars and night clubs are business establishments where the primary source of income is the sale of alcoholic beverages. Food is usually available for purchase, but the menu is usually more limited than in a restaurant, and food prepared to order may not be available at all hours that a bar is open for business. A night club is a bar that offers live entertainment on a regular basis. When social dance events are held in night clubs, it is common for a live band to play music for dancing. Night clubs tend to be larger than bars and, if having a dance floor, they tend to be larger than those in bars although, in both of these types of facilities, dance floors tend to be small relative to the establishment seating capacity. In both bars and night clubs, dance floors and dancers are integrated into a larger social environment that includes non-dancers who have other motivations for being present, including alcohol consumption and socializing. For this latter group the dancers are a form of entertainment, or perhaps an extension of their social goals, which may include wandering onto the dance floor while lacking the prerequisite skills.
Restaurants rarely have permanent dance floors imbedded within the main dining area, although in some cases seating can be altered to create a dance floor, usually during hours when dining is not at high demand. The social dance event that can be created in these situations is typically at most medium sized (≤ 50 people). Nevertheless, there are some restaurants that have separate large rooms that are rented to groups for special social events. Some of these rooms have flooring suitable for dancing and can be configured for social dance events; these rooms can often accommodate up to 100 people. In this setup, food and (both alcoholic and nonalcoholic) beverages can be ordered from the restaurant. Restaurants of this type are often popular locations for milongas. However, rental cost and limitations of space availability usually prevent these facilities from being available for events of longer duration, such as tango weekends, festivals and marathons, although some milongas within the schedule of a tango weekend or festival may be held at a facility of this type.
Some restaurants may have outdoor areas for dining, such as on patios, terraces, verandas, and decks; in some cases, these areas may be suitable or transformable for hosting social dance events.
In most facilities that host tango social dance events, tango organizers rent space on an hourly or event basis. However, when milongas are held in facilities that sell food and beverages (i.e., bars, restaurants, coffee houses), particularly when the milonga is integrated into a more inclusive dining or drinking environment and provides a type of entertainment for the non-dancing clientele, alternative financial arrangements may exist; e.g., the host establishment may collect the admission fee, or the tango organization may use the facility rent-free as long as food and/or beverage sales reach a certain criterion level.
(3) Coffee Houses
Coffee houses are typically private businesses whose primary income is from the sale of coffee, tea, and other nonalcoholic beverages, although some coffee houses also sell alcoholic beverages. A limited variety of (usually) pre-prepared food is available for purchase. Some coffee houses have flexible enough seating to hold social events and there have been cases where small to medium sized milongas (≤ 50) have been held in larger coffee houses that have appropriate flooring. This usually occurs during evening hours when sales of coffee and other stimulants is lower and may be more likely to occur in coffee houses that also sell alcoholic beverages.
(4) Banquet Halls, Convention Centers, and Hotels
Banquet halls have large dining rooms that are typically rented for weddings and other rite of passage events, as well as for conferences of various types. If the flooring is appropriate, a banquet hall can be rented for milongas, typically in conjunction with tango festivals and marathons. Catering of food is rare at tango social dance events, but is an available option, particularly at festivals where there are dance performances.
Convention centers have a greater variety of rooms of different types, and may have more than one banquet hall. Convention centers are often used as locations for tango festivals because there are typically multiple rooms with suitable flooring available to allow for simultaneous workshops, as well as additional smaller rooms or open areas that can accommodate concessions that sell shoes, dance clothing, and other tango related merchandise. Convention centers may have food concessions, bars, and restaurants, or offer catering for events. Often convention centers are associated with hotels, being adjacent to or within the hotel grounds.
Banquet halls are usually privately owned businesses. Convention centers can be either privately or publicly owned, although daily operations and small businesses operating on the premises are typically run by private corporations. Hotels that have banquet halls or can serve as conventions centers are usually privately owned, although public ownership of these facilities may occur. In some cases, colleges and universities (both private and public) have conventions centers and hotels with banquet facilities, although usually on a smaller scale than nonacademic settings for these types of facilities.
(5) Fitness Centers and Yoga Studios
The primary function of fitness centers is to provide fitness machines for exercise. However, it is not uncommon for fitness centers to offer group fitness classes (e.g., aerobics, Zumba, yoga, tai chi). Some fitness centers may offer classes in social dances, although rarely classes in tango. Larger fitness centers (e.g., some YMCA facilities) may rent space to tango event organizers for classes, workshops, and milongas.
Yoga studios are designed to accommodate group instruction and practice in yoga. In some cases, yoga studios have been rented by tango organizers for the purpose of hosting tango classes and sometimes even milongas.
Fitness centers and yoga studios rarely have kitchen facilities and therefore generally do not provide food for sale. In some cases, fitness centers have snack bars providing beverages and pre-prepared foods for sale. It is unusual for a fitness center or yoga studio to provide or allow on site consumption of alcoholic beverages.
(6) Community Centers
Community centers are broadly defined as:
… public locations where members of a community tend to gather for group activities, social support, public information, and other purposes. They may sometimes be open for the whole community or for a specialized group within the greater community. Community centres can be religious in nature… or can be secular, such as youth clubs.
For the purposes of this article, community centers administered by religious organizations will be considered separately under ‘Houses of Worship’ below.
The type of community center hosting social dance activities is one that focuses on social, recreational, educational, or cultural activities. These community centers often contain multiple rooms of various sizes that can serve as locations for tango dance activities such as classes, workshops, practicas, and milongas. Regularly scheduled dance classes can be part of an educational program, and social dances can be part of a social program managed to varying degrees by the community center administration, or space may be rented by dance event organizers.
It is common for community centers to have large rooms than can accommodate more than 50 people, sometimes more than 100 people. Therefore some community centers can serve as locations for tango festivals and marathons. Most community centers have kitchen facilities but do not sell food or beverages, except possibly through vending machines for soft drinks and snack foods. At social events, event organizers or attendees usually provide food and beverages free of additional charge to attendees or event attendees may bring food to share. Consumption of alcoholic beverages on site may or may not be permitted.
(7) Houses of Worship
Houses of worship are designed primarily for providing religious services for a community. However, many houses of worship have rooms of various sizes that may be rented to community members for instructional and social activities; sometimes these are in a separate facility (e.g., religious community center) administered by a religious organization.
The dance activities that can be held in houses of worship (and their community centers) are similar to those hosted in public community centers, although event capacity is often smaller. Use of facilities, e.g., with respect to provision of food and beverages, food preparation in a kitchen, may be comparable, although consumption of alcoholic beverages is likely to be restricted to a greater degree in facilities administered by religious organizations. Given the use of houses of worship for worship services and related congregation based social activities on weekends, opportunities for weekend social dance events tend to be somewhat limited, and therefore it is unlikely that houses of worship or their associated religious community centers would be used for tango festivals and marathons.
In contrast to public community centers, it is unlikely that cultural, educational, or recreational programs would be incorporated into the programmatic structure of a house of worship or its associated community center. Therefore, any social dance activities that occur in a house of worship are likely to occupy the facility for only several hours per week.
(8) Museums, Art Galleries, Bookstores and Libraries
In the US, museums tend to be either publicly owned or run by privately owned non-profit organizations. Art galleries are smaller operations that tend to be run by non-profit organizations or exist as part of an establishment selling art or having another commercial function (e.g., coffee house, bookstore). Bookstores are privately owned businesses. Libraries are almost always publicly owned. Some museums and libraries have large rooms that can accommodate social functions such as milongas; these milongas would be segregated from other activities at the facility, but are also likely to occur outside normal hours of operation. Even within existing display space, museums and art galleries sometimes can be reconfigured (e.g., by moving of tables and chairs) to host smaller milongas, also usually at times outside normal hours of operation. Some of these facilities have cafes where food and beverages can be purchased, and these may be adjacent to an area where a social dance event can be held. Some bookstores have cafés where seating can be reconfigured to host a milonga; this type of event may occur within the normal operating hours of the facility but is also likely not to be separate from normal commercial activities, including at the café. Alcoholic beverages are unlikely to be available for purchase at these facilities, although attendees may be offered alcoholic beverages or bring their own at some events at museums and art galleries.
(9) Colleges and Universities
Although the primary purpose of colleges and universities is formal education towards an academic degree, there usually exist extensive facilities for hosting educational, social, recreational and cultural activities. Many facilities with flooring suitable for dancing are typically available for hosting social dance events of various sizes, including group classes, workshops, practicas, milongas, festivals, and marathons. Most colleges and universities also have coffee houses and restaurants with flexible seating arrangements that can accommodate small to medium size social dances. Likewise, there may also be art galleries and/or museums that have rooms with suitable flooring that can be reconfigured for dancing. Some colleges and universities have reception or lounge areas within such facilities as performing arts centers, cultural centers, and student, faculty or alumni centers that can be configured for social dance activities, and can usually accommodate large events (> 50 attendees).
Social dance events at a college or university may hosted by officially recognized student and cultural groups (which may obtain access to such space at little or no cost), or some of these spaces may be rented to outside groups on an event basis. However, in some cases, there may be significant competition for space. Another limitation in events held on college/university property is that the sale and consumption of alcoholic beverages may be restricted, perhaps to areas that are primarily designated for faculty or alumni use.
Colleges and universities usually offer the widest variety of space facilities of different sizes available for social dance activities within a community where they exist. There is no other single institutional type that has the flexibility and capacity for hosting social dance activities that colleges and universities have. Many large (and some small) colleges and universities in the US support viable tango dance communities.
Not only do the colleges and universities themselves provide facilities suitable for hosting tango activities, but in the neighborhoods surrounding their campuses, there are often houses of worship, restaurants, bars, night clubs, coffee houses, bookstores, art galleries, fitness centers, banquet halls, hotels and convention centers that are also suitable for hosting tango social dance activities. These institutions all benefit from the economic activities associated with college campuses.
(10) Fraternal and Veterans’ Organizations
Facilities operated by fraternal organizations (e.g., Freemasons, Knights of Columbus, Elks) or veterans organizations (American Legion, VFW) often have large halls with floors suitable for dancing. These facilities also often have bars selling alcoholic beverages and kitchens available for preparing food. Tango organizers sometimes rent facilities of these types for hosting instructional and/or social dance events.
(11) Outdoor Facilites
Open air facilities such as verandas, decks, patios, gazebos, bandstands, and pavilions have been used for hosting milongas in some communities. Some of these facilities (those attached or adjacent to buildings) may be an outdoor section of a restaurant or even occasionally a bar, but most of these facilities are in publicly owned or non-profit establishments such as parks and fairgrounds, community centers, botanical gardens, museums, and colleges and universities. They serve as attractive locations for hosting tango social dance events when the weather is favorable. In some public facilities, it may be possible for tango organizers to take possession of a space for dancing on an ad hoc basis, subject to availability, without being charged for the usage.
(12) Hybrid Facilites
Larger establishments such as colleges and universities, community centers, museums, hotels and convention centers often have multiple spaces that can be configured for tango social and instructional events, including not only large rooms that can serve as dance halls, but some also have restaurants, bars, coffee houses, and art galleries that can be reconfigured to host milongas.
(13) Private Homes
In some cases, tango organizers may own (or even rent) a home that has a large area (e.g., remodeled basement; dance studio addition, attached or detached) that can serve as a site for tango instruction and milongas. In some cases, homeowners who have a large living room or sunroom with a suitable dance floor can move furniture to create a space for a small social dance event. In some other cases, there may be an outdoor area (e.g., patio, veranda, deck) that can be suitable for a social dance event under favorable weather conditions. It is unlikely that a tango organizer hosting a milonga in a private home will charge admission, although it would be normal to charge for tango instruction. The use of private homes for tango social dance activities is most likely to occur in small tango communities where most members of the community are already familiar with one another.
Vulnerability of Tango Facilities to Closure and Failure during the Covid-19 Pandemic
(1) Evaluating the Financial Status of Tango Supportive Facilities
Government restrictions imposed during the Covid-19 pandemic have forced many businesses and recreational facilities to close or restrict operations, albeit for limited durations. All of the facilities mentioned above (with the possible exception of outdoor facilities) have been targeted for closure or reduced operation at various times in various geographic regions in the US, due to high patron density, high event attendance, or frequent movement of individuals throughout the facilities. Concomitant with this has been decreased consumer demand for services in many of these facilities due to reduced earnings by potential patrons as a result of the unemployment or other economic uncertainty caused by the Covid-19 pandemic. In addition, there has been decreased use of these facilities due to individual decisions to maintain social distance in order to minimize the risk of coronavirus infection. Dance activities in general have experienced reduced participation for these reasons, and tango dance activities in particular have been virtually eliminated from the social dance landscape in the US during the pandemic.
Political, social and epidemiologic factors have exerted significant influences on establishment viability during the Covid-19 pandemic, but ultimately it is the financial balance sheet that determines whether a facility will remain open or reopen after the pandemic has run its course. Establishments are at high risk for failure when their primary sources of income have been severely compromised while expenditure commitments remain high. Within this perspective, the examination of sources of income and expenses for each type of facility supporting tango activities is critical in assessing their risk of failure. Common categories of sources of income and expenses are listed here.
Sources of income:
- Sale of consumable products (e.g., food, beverages)
- Fees for service (e.g., tuition, educational fees, admission fees)
- Membership fees
- Charitable contributions
- Grants and contracts
- Return on investment (interest, dividends, capital gains)
- Rental income
- Taxes (government allocation)
- Property expenses (mortgage/rent, property taxes, insurance, building maintenance)
- Loan payments
- Operating supplies (e.g. office supplies, tableware)
- Utilities: heat, electricity, water, sewage, trash collection, telephone, internet
- Payroll: wages, salaries, benefits, payroll taxes
- Contracts for service (e.g., equipment maintenance, cleaning services, pest control)
- Purchase of products for sale (e.g., food & beverages)
- Income taxes
- Sales tax
For most facilities, property expenses are high and relatively fixed regardless of the level of activity. Loan payments are often substantial and remain constant. Utility costs decrease with decreased activity, but a certain amount of heat and electricity is consumed even if the facility is closed or operating at reduced capacity. Telephone and internet contracts, which are not insubstantial, are typically maintained during temporary closure in order to be prepared for immediate startup in anticipation of imminent reopening and these costs will remain constant under conditions of reduced activity. The expenses that are or can be decreased during closure or reduced operation are operating supplies, purchases of equipment and products for sale, as well as expenses due to payroll and income taxes.
A major factor affecting the budget of establishments is their tax liability. Certain institutions receive federal and state exemptions from some types of taxation, which greatly reduce expenses even during normal times. Nonprofit organizations [501(c) IRS classification] are exempt from paying federal income taxes. These include charitable organizations that have a religious or educational mission [501(c)(3)] (e.g., religious organizations, colleges and universities, museums, the YMCA), social clubs [501(c)(7)], (e.g., country clubs, sports clubs), fraternal societies [501(c )(8) & 501(c)(10)] (e.g., Knights of Columbus, Freemasons, Elks), and veterans’ organizations [501(c)(19)] (e.g., American Legion, Veterans of Foreign Wars). State and municipal owned organizations such as libraries, museums, community centers and convention centers are also exempt from paying federal income tax. All nonprofit organizations [as classified under IRS Code Section 501(c)] are exempt from property tax in all 50 US states. In almost all cases, nonprofit organizations are also exempt from paying state income taxes, although they are required to pay payroll taxes of employees. Property taxes and federal and state income taxes are major expense items for for-profit businesses.
The sources of income for establishments that are reduced most during closure or reduced activity are fees for service, sales of consumable goods, and rental income. Other sources of income, such as membership fees, charitable contributions, grants and contracts, return on investment, and state and local government allocations (through taxation) are also likely to be reduced, to varying degrees for different institutions, during an economic recession.
Federal legislation (the CARES Act) has provided some economic relief during the Covid-19 pandemic through loans to small businesses and direct payments to state and local governments. Payroll Protection Program loans to small businesses have been designed to maintain employees on payroll for 8 weeks; these loans are forgivable if certain conditions are met. This program ended August 8, 2020. Small businesses and private nonprofit organizations have also been eligible for Economic Injury Disaster loans to meet normal operating expenses. SBA Debt Relief provides small business a mechanism for deferring payments on previously contracted loans. CARES Act funding, to the degree that it has been available, may delay the financial failure of small businesses. All funding from the CARES Act will have terminated by December 31, 2020 (Forbes). At the present time, inaction in the US Congress has resulted in the failure to provide additional needed financial assistance to businesses and government agencies.
(2) Risk Assessment for Financial Failure among Tango Supportive Organizations
Social dance studios have been severely negatively impacted by the Covid-19 pandemic (Washington Post). If they have not been closed outright, classes have been restricted by government ordinances limiting the size of social gatherings. Attendance has been reduced further by dancers’ fear of coronavirus infection due to close proximity and lack of interest to participate in dance activities because masks may be required and fewer people attend events, thereby limiting opportunities for social interaction. Decreased disposable income among dancers during the pandemic has further reduced attendance at activities in dance studios.
Most social dance studios derive their income almost entirely from fees-for service, i.e., payment for group and private social dance classes; this income falls substantially during closure, with online instruction replacing it only to a limited degree. Online instruction and virtual social dance events do not substitute adequately for in-person participation in meeting the social needs of dancers.
Dance studios are an integral component of many tango dance communities. They frequently are the primary sites for recruiting new dancers and they also typically offer reinforcement of learning within the same physical environment in their hosting of practicas and milongas. This is particularly important for beginners. Some dance studios have multiple tango instructors to offer developing tango dancers continued engagement within a tango supportive environment. Small tango communities that rely primarily upon a single dance studio for continued recruitment and social and educational activities could face significant challenges in surviving if the business fails during the Covid-19 pandemic.
Bars and restaurants rely heavily on sales of beverages and food for income. Reduced capacity requirements and closures due to government mandates have severely reduced income for these businesses and many have failed (ABC news; Marketplace). The role of these facilities in tango communities is that they often are the site for milongas. A business failure for one of these facilities may not have a significant long term impact on a tango community, although if an organizer had been able to rent a facility of this type at a reasonable cost and milonga attendance had been high because of the location, time of availability and atmosphere, it may become difficult in post-pandemic times to find a replacement facility offering these amenities. For small tango communities in geographic areas with limited alternative options for hosting tango social events, it may not be possible to recreate the same advantages in a new environment of this type. This could have a significant negative impact on tango community survival.
Banquet halls and night clubs have faced the same financial challenges as do bars and restaurants, albeit on a larger scale; i.e., these larger facilities have higher property expenses but face common restrictions on the size of social gatherings.
Coffee houses, with balance sheets similar to restaurants, also have been at risk for business failure during the Covid-19 pandemic (Pittsburgh Post-Gazette).
Fitness centers also have experienced permanent closures during the Covid-19 pandemic (IHRSA).
Privately owned museums and art galleries occasionally have provided attractive facilities that have been rented by tango organizers to host milongas. These museums and art galleries have been at risk for permanent closure as a result of the Covid-19 pandemic (Artsy News).
Many bookstores also face the prospect of permanent closure due to the economic consequences of the Covid-19 recession (Hartford Courant; Los Angeles Times).
The permanent closure of coffee houses, fitness centers, museums, art galleries, and bookstores are only likely to have a significant impact on the viability of a tango community if one of these facilities is the only site for a milonga in the community and alternative sites are difficult to find.
Privately owned convention centers and hotels have suffered financially during the Covid-19 pandemic due to government imposed travel restrictions, self-imposed cancellations of conferences by organizations, as well as by personal choices in limiting travel during the Covid-19 pandemic (Los Angeles Times; Eater Chicago). Permanent closure of these facilities is likely to limit the ability of a tango organizer to host tango festivals and marathons; however, since it is primarily well-developed tango communities that have the population and resources to host festivals and marathons, closure of hotels and convention centers that have hosted tango activities is unlikely to have a negative impact severe enough to threaten the existence of tango communities that have been able to host festivals and marathons.
Almost all private businesses carry loan debt incurred with the establishment of the business or renovation of the facilites. The amount of this debt is correlated with the size of the facility and the degree of remodeling needed to establish or modify the business. Inability to meet loan payments can cause business failure for any of the facilities mentioned above.
The Covid-19 pandemic has had a significant negative financial impact on colleges and universities (Brookings; US News). Most transitioned to online instruction during the initial wave of infection during the spring of 2020, many had delayed a return to in-classroom instruction in the early fall, and the renewed acceleration in infection rates in the late fall has resulted in additional curtailment or cessation of in-person instruction. Both in late spring and late fall, at many colleges and universities, students were dismissed from campus housing, obligating them to return to their parents’ homes. Restrictions on entry into the US and health concerns have led to lower rates of matriculation of foreign students, which often comprise a large percentage of the graduate student populations (PEW). Loss of opportunities for in-classroom learning and restrictions on social gatherings that are an integral part of the college experience have led many graduating high school students to delay entry into college, as well as causing many continuing students to take a leave of absence from their educational programs. All of these impacts on the social organization of college campuses has resulted in decreased enrollment and therefore decreased tuition income. Dismissal from dormitories has led to decreased income from housing rental and dining hall contracts. Economic recession has decreased charitable contributions to colleges and universities. Decreased state funding has significantly reduced this source of income for public colleges and universities.
Despite exemption from federal and state income taxes and local community property taxes, colleges and universities still maintain large expense responsibilities. Large fixed expenses such as salaries for tenured faculty and other contracted personnel remain a financial liability. Building maintenance, utility costs, and service contracts, even if lowered somewhat, still represent large expenditures for these institutions with expansive facility development. Although to date there have been only a few colleges and universities that have closed during the Covid-19 pandemic, continued viral spread resulting in abandonment of in-classroom instruction (and on campus residence) will exacerbate budget shortfalls and cause additional colleges and universities to fail and close permanently. It has been predicted that small private liberal arts colleges (WBUR) and smaller regional public colleges (PEW) are at greatest risk for permanent closure. (See also US News; Marketplace; Foundation for Economic Education).
Numerous colleges and universities support active local tango communities, both in terms of providing the necessary infrastructure for holding events, as well serving as a source of potential dancers (students and staff) for the development of tango communities. In college towns, the college or university is usually at the center of tango activity. Although college students usually comprise the largest proportion of dancers in a college town tango community, older dancers associated with the college or university, as well as local residents, are also attracted to its tango activities.
Permanent closure of a college or university in a college town is almost certain to cause extinction of the local tango community. However, despite the fact that the facilities of many colleges and universities potentially will be available after the Covid-19 pandemic has subsided, as the pandemic persists into 2021, the prospects of tango community revival in college towns remains at risk, for several reasons. If one assumes that social activities on college campuses return to normal in the Fall 2021 semester, something that is likely but not guaranteed, there will have been no new recruits to a tango community for about 18 months (since March 2020). With no reinforcement provided to beginners during that interval, plus an expected turnover rate (through graduation, withdrawal, and transfer) of 25% or more per year, the size of a college town tango community could be greatly reduced, perhaps to the point of inability to thrive upon resumption of normal activities. Thus, given the central role of colleges and universities in tango community development, the impact of Covid-19 upon these institutions is likely to have a significant negative impact on tango communities as well.
Numerous tango communities host tango instructional and social dance events in houses of worship and their associated community centers. Houses of worship often operate with limited income (charitable donations, rentals, fees for service) that has been curtailed by temporary closure, event size restrictions, and economic hardship imposed on congregation members during the Covid-19 pandemic, while maintaining a financial burden of fixed or relatively fixed expenses (salary of clergy, loan payments, building maintenance, utilities). As a result, some (mostly smaller) houses of worship have been placed at risk for permanent closure during the Covid-19 pandemic (Christian Post; Akron Beacon Journal). Tango organizers have often been able to rent space in houses of worship or their community centers at low cost; therefore, the loss of one or more of these options for hosting tango events could have a negative impact on tango community viability.
It has not been possible to determine whether there has been permanent closure of social clubs, fraternal organizations and veterans’ organizations due to loss of revenue during closure during the Covid-19 pandemic; however, this possibility cannot be precluded. The financial situation is particularly precarious for fraternal organizations, which have been experiencing membership decline for decades (Washington Times). The Covid-19 pandemic could be the tipping point causing the permanent closure of already financially struggling fraternal organizations.
Publicly owned community centers throughout the US have experienced partial or complete closure at times during the Covid-19 pandemic. In a few cases (e.g., Bloomington MN), some facilities have been closed permanently as a result of the Covid-19 pandemic. The saving grace for publicly owned community centers is that they themselves are exempt from property taxes, while their funding can be replenished through government allocation of the property taxes paid by others when the economy recovers from recession. Therefore, it appears that, overall, publicly owned community centers are relatively immune to permanent closure during the Covid-19 pandemic.
Summary and Conclusions
As of the time of publication of this post (December 2020), the Covid-19 pandemic has caused over 1.6 million deaths worldwide (Worldometers-1) and over 300,000 deaths in the United States alone (Worldometers-2), including over 3000 deaths per day (New York Times). Government mandates and recommendations have attempted to limit the spread of the coronavirus by reducing population density, which has decreaased economic activity and caused a severe worldwide economic recession. As a result, many businesses have failed, resulting in the permanent loss of access of their facilities to the general population. Recent acceleration in the spread of the coronavirus is likely to lead to further government restrictions on economic and social activity, further unemployment, decreased consumer demand, and therefore more business failures. Nested within these business failures has been the permanent closure of many facilities available for recreational activities. These losses, as well as future losses that will occur before the pandemic subsides, will cause many dance communities, including tango communities, to lose familiar and desirable facilities that have hosted their social dance activities. This will create the need for social dance event organizers to seek alternative facilities upon resumption of social dance activities, which may not be as desirable or may not even be available. Therefore, the economic consequences of the Covid-19 pandemic will place many social dance communities at risk for failure to revive after the pandemic has ended.
When considering the facilities most often used by tango organizers to host their social dance events, those at greatest risk of permanent closure due to the Covid-19 pandemic are those that have high fixed expenses and income greatly lowered during the pandemic, i.e., dance studios, bars and restaurants, and houses of worship. Small colleges and universities are also at risk for permanent closure. Prior reliance on these facilities for hosting tango social dance activities could place a tango community at risk for failure to find attractive alternative sites for tango social dance activities. For example, it may not be possible to replicate the night life atmosphere of bars and some restaurants that is an attraction for some dancers. Replacements may not be found for dance studios that can reliably offer a variety of classes on a predictable schedule, and also be available for private lessons and social dances at the same location. The loss of dance studios, which exist on fragile economic grounds to begin with, could have the greatest negative impact upon the future development of a tango community.
The institutions most likely to have survived the Covid-19 pandemic are large colleges and universities and publicly owned community centers although, in individual cases, any type of facility that has hosted tango activities may have survived, despite the economic challenges faced. These and other facilities that still will be available for hosting activities may not have the same convenient set of characteristics as those that existed prior to the pandemic (e.g., location, parking or access to public transit, hours of availability, attractive atmosphere). Some facilities (e.g., at universities) may not be available to event organizers not affiliated with the institution, or available only on an unpredictable low priority basis. In any case, post-pandemic shortage of available facilities for social events of any kind will create competition and perhaps even increase rental costs, which could be formidable obstacles for small tango communities.
Another limiting factor in seeking new facilities for hosting tango social dance events after the pandemic is the almost inevitable shrinkage in tango community size as a result of the pandemic. It is likely that there will be a shrinkage in community size for several reasons. There will be significant losses in the cohort of beginners recruited in the months before the pandemic, due to lack of reinforcement of tango skills and social involvement. There will also be the normal turnover among existing dancers, which may be higher than usual because some dancers may have been uprooted from a community in search of employment elsewhere. Turnover is expected to be higher in communities that normally have high turnover, such a tango communities in college towns. Even among former dancers still residing in a community, a depressed economy (and lowered consumer spending) will persist beyond the point when the health risks of interpersonal contact have subsided. However, in contrast, it is also expected that dancing desires repressed during the pandemic will be unleashed when it is deemed safe to gather to dance again and many communities may experience a renewed excitement about social dancing when it once again becomes available.
The post-pandemic risk of tango community failure will generally be greater for smaller tango communities. Smaller communities may not be able to afford the rental costs for hosting events in the facilities still available to accommodate tango social dance events. If the facilities available for hosting tango social dance events are less attractive to dance community members, attendance will decrease and this alone can cause further subsequent attendance decline. Failure to recognize these hazards, for example due to complacency that may have existed in a community that coasted along for years without expansion or even slow decline, could cause a sudden collapse in involvement in a tango community. Even in vibrant medium- to large-sized tango communities, viability prior to the Covid-19 pandemic cannot be considered to be the inevit