COVID-19 vaccines are now widely available throughout the United States for most people, and many companies, government entities, and citizens perceive vaccination as the way to finally get back to normal after this worldwide crisis. Yet now that the initial vaccine rollout has occurred, vaccination rates have slowed dramatically. According to the CDC, daily vaccination rates peaked in late March 2021 and have shown a steady decline since then. That's why many vaccination sites and even businesses are starting to offer incentives to encourage those who are on the fence to go ahead and get vaccinated.
Are COVID vaccine incentives the new normal?
President Biden has asked employers to allow time off for those wishing to get vaccinated, and the Internal Revenue Service (IRS) created a rule that offers small companies of 500 or fewer employees a tax credit to compensate for the time off. Many businesses, including Amtrak, Darden Restaurants (NYSE: DRI), Chobani, Instacart, and Target (NYSE: TGT), have taken it one step further than just approving time off. These businesses have all offered various incentives to their employees encouraging them to get vaccinated.
Rewards range from cash incentives to extra paid leave and vacation time. There are also vaccination sites that are offering small gift cards to restaurants and gas stations or food treats like Krispy Kreme doughnuts and popcorn. The Greenhouse of Walled Lake in Michigan is even offering a free prerolled joint in their campaign "Pot for Shots.'' All these programs have the intent of getting as many people vaccinated as possible.
CoStar takes vaccination incentives to new levels
CoStar Group (NASDAQ: CSGP) recently launched an incentive program to encourage its employees to get COVID-19 vaccinations and return to in-office work that has blown most of the other companies out of the water. They aren't offering an hour or two of paid leave. Incentives include a new Tesla (NASDAQ: TSLA), a $10,000 cash prize, and an all-inclusive trip for three employees and their guests to Barbados on a private plane. The incentive program is supposed to continue into the summer, if not longer, with additional unannounced prizes.
According to their CEO Andrew Florance, these perks are a "drop in the bucket" for CoStar. And it's no wonder, as their total revenue for the first quarter of 2021 came in at $458 million, representing a 17% year-over-year growth rate.
The Millionacres bottom line
There is growing debate as to whether employer incentives to get a COVID-19 vaccine are legal or even potentially discriminatory to those who cannot get the vaccine. But for now, with no clear legal guidance, it appears businesses can choose to move forward as they see fit. And with CoStar's lavish incentives, other companies may begin to follow suit in an effort to convince their remaining nonvaccinated employees that the perks outweigh their hesitations. That could be beneficial to investors in office real estate.