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How Coronavirus Crushed the Global Economy?

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How Coronavirus Crushed the Global Economy?

Introduction

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We are living in a crazy time, and very few of us would have predicted this current situation.

We started a new decade on 01 January 2020.

Most of us in the world are sitting like a duck in complete isolation.

The market has fallen all around us. But this kind of disaster will surely allow successful brains to rise above the pack.

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Here are few industries, which are failing due to Coronavirus and for successful brains, the world of opportunities awaits to rebuilt.

Cruise Liner Industry

Coronavirus has stopped the cruise liner to physically docking into ports.

Why?

Because the spread of the virus on the ship has been so rapid.

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It started with the Diamond Cruise refused permission to dock in Japan.

Its 3700 passengers and crew were quarantined at the Japanese port on 04 February 2020, after 700 passengers tested positive.

Sadly, 08 people lost their lives due to the Coronavirus, in this case.

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Then Grand Princess Cruise had 21 people tested positive, and all the patients were route march into federal quarantine on US soil.

Passengers have been demanding full refund, compensation, class action lawsuits and reputational damages, which will take a lot to salvage.

And the stock market hasn’t been kind either, with three big hitters in the cruise industry posting massive losses.

In the past 30 days, Carnival stock has dropped to 60%, while Royal Caribbean and Origin have lost 70% of their value.

Hotel Industry has been forced to shut down for now.

The hotel industry has been hit hard, as international travelers have been the source of spreading the deadly virus.

Sales conferences and market meetings hosted by hotels allowed the deadly virus to spread rapidly.

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Marriot Hotel in Boston hosted a conference for the Bio-Tech company Biogen in February 2020.

An infected person was there. The virus rapidly spread through attendees.

After two days, dozens of Coronavirus infected delegates left the hotel and continued to spread the virus unpronounced.

On 11 March 2020, a hotel staff member tested positive, the Hotel Marriot took the immediate decision to shut down.

This is just one example, but similar infections globally have led to the general shut down of properties, by leading hotel brands, like Marriot, Hilton, Ritz and more.

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As Government calls for an immediate and complete shutdown, the tourists and travellers are heading home before the travel ban leads them stranded.

The income is crippling in such large properties.

It is estimated that the hotel industry in the USA alone is losing US$ 1.4 Billion in revenue for every week of its non-operational.

The loss of jobs because of Coronavirus will be in the region of US$4 Million in the USA. 

Also, further 33,000 small business hotel operators and franchise owners that will be affected.

Wedding and Funeral Industry

Here comes the No One because people gathering is prohibited. 

The marriages have been postponed left, right and centre and funerals on ice.

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In South Africa, for example, even before the official countrywide lockdown on 26 March 2020, the gathering of more than 100 people were forbidden to curb Coronavirus spread.

In the USA on 16 March 2020, Trump’s administration recommended, “Avoid gathering in groups of more than 10 people”.

In Australia, funerals are suspended, as they are considered non-essential gatherings.

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If they continue, it should only be done in small groups, with a minimum gap of 2 meters, between each person.

These restrictions have put a considerable dent in the wedding and funeral industry.

We can’t imagine the risky gathering of friends and families, flying in from all over the world, all mixing with children, elderly aunts, and uncles, cramped into the stuffy venue for hours! Add in the rapid infection rate and incubation rate of the Coronavirus. It’s a recipe for disaster.

Moratorium on these taxing events is understandable, but it doesn’t take away its impacts on all vendors involved.

Photographers, catering, venue, sound, and light management are all feeling the pinch.

Weddings and funerals are postponed to unknown future dates. 

When these are allowed again, there will be a mad scramble for booking.

This will create a bottleneck impact on the industry, which is downsizing staff and resources in this stage in the game.

It’s difficult to imagine the couple’s pain who were planning to get married during these challenging times.

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The whole future planning has gone for a high jump. 

Nothing is straightforward when exactly they can plan to get married. Also, there is significant confusion regarding the uncertainty of their marriage plans and anticipated expenses they need to be mentally ready for. 

To have complete details of facts we are talking about. Please read our other article on wedding expenses Part 1 and Part 2.

Malls and High Streets

As the infection spreads, increased countries are opposing complete social distancing rules, including limiting going to public places and shops for non-essentials.

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High streets and malls are emptying and converting into ghost towns.

No matters how impressive sales in clothing shop windows look, they are not persuading the customers to deviate from the straight paths to and from the grocery store.

Many shop owners have decided to switch off the lights and send their staff home to save costs and protect their employees and shoppers. 

This pandemic has motivated the last few shoppers, who resisted online buying have finally decided to switch over to home delivery. 

The employers like amazon are snapping up the retrenched retail staff. 

Jeff Bezos recently announced that he is on the hunt for 100,000 new team members.

Airline and Travel Agencies Nose Dived

Airlines are scrambling as increased travel bans are imposed to try and stop the spread of the virus.

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Travel agents and hospitality staff are trying to plug the holes, as they haemorrhage for the loss of sales and masses of refunds they will have to issue.

Travel park and online travel sites are experiencing a 50% drop in business globally.

According to The Print, more than 16,000 passenger jets are grounded worldwide, according to industry researcher Cirium, as the coronavirus obliterates travel and puts an unprecedented strain on airline finances. 

Finding the suitable space and conditions for 62% of the world’s planes and keeping them airworthy have suddenly become priorities for 2020.

The number of passenger jets in service is the lowest in 26 years, according to Cerium. 

Managing such large-scale storage is a challenge for an industry already in crisis, with airlines worldwide slashing capacity to close to zero or not flying at all. 

The International Air Transport Association has warned that revenue from flying passengers could drop by a third of a trillion dollars this year and those 25 million jobs are at risk.

Airlines are hunting for space on the ground at airports or in longer-term storage facilities in arid places such as Australia’s outback and the Mojave Desert in the U.S.

According to a post at Amsterdam Airport Schiphol, KLM Group has more than 200 aircraft at gates and on a runway, arranged according to size and type, and ensures enough space for them to be towed if maintenance is required: the company’s website.

They have started moving their sales team into customer support to handle masses of incoming calls and emails of concerned customers. coronavirus

The only business strategy for the travel industry is to resolve the cancellation cases and attain high customer satisfaction quickly, so when the travel ban is lifted, they will still have some loyal clients coming back to them.

Beauty Service Industry

In a world where touching your face is no go zone, there is not much attraction head to the saloon for facetime with a stranger interacting with other people all day long.

Sure.

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There is a superior level of hygiene in the industry, but that doesn’t make it a wise move to head out for a facial if you don’t critically need one.

Because none of us is going out to see others.

Having your hair and nail done isn’t suddenly marked as essential, and most people are saving money for now.

Restaurants and Bars

Social distancing is critical to contain the virus.

Many Governments had to force shut down the restaurants and bars, where people didn’t heed the national call to remain away from group gatherings.coronavirus

The governor of New York Mr Andrew Cuomo declared a total shutdown of all non-essential services and ordered everyone to stay home. 

All that open across the state are the grocery stores, pharmacies, doctors’ laundromats, gas stations, and limited transportation routes.

Meaning all bars and restaurants are closed immediately, except for food delivery services. There is no way for these establishments to make an income.

Most of them are closed, but some of them keep serving clients by home delivery of food.

Music Festivals

All music festivals are called off for the near future.

These events are hotbeds for the germs swapping as it is. Now with Coronavirus deadly virus spreading, no one is taking any chances.

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This had a considerable knuckle effect on everyone involved. 

From music artists to booking agents, backstage to rigging crew, accommodation, travel ticketing, and small businesses like food vendors will all be taking a big hit on their annual income.

Many a cost like marketing, will never be able to be recovered.

It is very unclear what the music industry will be post containment of the Coronavirus.

Will the public ever have an attraction towards large public gatherings after this incident? Only time will tell.

Sporting events

On 11 March 2020, NBA suspended its season when one Utah Jazz player Rudy Gobert was tested positive for the Coronavirus. 

It seems like a dramatic move. But on 16 March 2020, the NBA confirmed 16 positive cases for Coronavirus infection, including staff and players.

Much like the music festival, the Sporting event is valued as the Multi-Trillion Dollar industry globally. 

An industry, whose future now looks bleak.

Ironman, Triathlons, school sports tours to premier leagues, there isn’t a fixture still standing.

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Even the Tokyo Olympics scheduled for commencing on 24 Jul 2020 is hanging in the balance.

The financial losses to these industries are exponential. And supporting industries like travel and hospitality are hurting too.

Gym and Fitness Industry

If you haven’t thought about the high risk of contamination involved in a hot, sweaty body fluid-filled workout session in Gym, then now is the time to start thinking.

Gyms and sporting facilities have shut down until Government relaxes on restrictions on public gatherings.

The big Gyms that have locked their customers with iron-clad contracts will not be too affected. 

Its the smaller fitness clubs and personal trainers are the one who is feeling the pinch, as people social distance themselves and stick to isolation.

Cinemas, Theatres, Museums, and Art Galleries

Social distancing means keeping out of public places. This also spells disaster for the places, which rely on the members of the public to buy tickets and attend.coronavirus

The losses of income can come crushing to these industries as many exhibits, artists, or movie titles are booked and paid for over a year to secure them. 

Then when income doesn’t come in or the season moves along, these have not cost that can be recouped. 

It is an overwhelming blow to the international and local art and culture scene and a more significant blow to all associated businesses. 

Big Factory and Industry are a hotbed for human interaction.

The factory floor can be the best place for the rapid spread of diseases like Coronavirus. 

One person could easily infect everyone on the shop floor or production line. Then interact with other people in the canteen, changing or locker rooms and other public transports.coronavirus

One of the reasons that the spread was so fast was that China is the “Factory of the world”.

Because of travel bans and lockdown, many of the Chinese industries were forced to shut. 

When there is a break in the supply chain, then others in their way, relying on their products or parts, are forced to close down too. In the health interest of all involved, it’s undeniable. 

But it also denies the knock on the fact that “No Work, No Pay!” will hurt part-time or temporary staff.

The loss of income for the factory owners during the shutdown will be huge.

The Dutch Cut Flower Industry Is Risking Complete Collapse.

At the Aalsmeer auction, the world’s largest flower auction, 20% of the flowers presented for sales were disposed of. 

Flowers from all over the world are sold daily in an auction in this vast market. 

The warehouse where the auction place is itself is the fourth largest building globally by footprint.

The global prices of flowers dipped by 50% of the actual cost, causing the market to dive into panic mode.

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Royal Flora Holland was quoted as saying, “Without emergency credit, from the Government, many companies will go bust, in a matter of weeks”.

School-related services

Many small businesses support the school and childcare industry.

From school meals to transportation, dance classes to boarding coaches are “No Work, No Pay” services.

During this time of uncertainty, many small businesses sit in limbo, waiting to see when lockdown and social distancing will be lifted, allowing them to operate once again.

Sight-Seeing Tours and Guiding Industry

If you look in the picture of the world’s most popular tourist attractions, right now they are empty.

It just doesn’t mean that tourists are staying at home. 

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That means the whole touring industry, including touring agents, drivers, food truck owners, ticket vendors, and gift shop owners, are also without work.

This supports the vast network of small businesses with little or no financial safety net to tie them over till travel bans are lifted.

Teaching English As a Foreign Language (TEFL)

English language teachers are out of work, and the online markets are completely flooded with the demand for more online courses on the English language.

The reality of the Coronavirus is set within Asia and the Middle East. 

The school closed. 

Other popular foreign countries with English teachers living abroad are Western Europe and Italy in particular. 

Most of these teachers are on the “No Work, No Pay” contract. 

So, many of them will be returned home without work.

Others have been isolated within their apartment during the lockdown.

The already flooded online teaching industry is inundated with TEFL qualified teachers trying to catch up with some income.

Competition with online sessions is fierce.

Thankfully, when the school reopens, most of the contracts will be reinstated, which has been a devastating knock-on for many educators.

CourtesyYouTube

Automotive Industry

If the trend seen in the first 2 days, after reopening the business, is anything to go by, the Indian auto industry is in for one of the worst years. 

Car dealers in various parts of the country had resumed delivery of vehicles that were already paid for before the lockdown was enforced, but new orders are hard to come by.

In fact, according to an ET AUTO report, the automotive dealers are facing large scale cancellation of bookings as customers are looking to minimizing their exposure to EMIs. 

With the pandemic still on the rise, there is a cloud of uncertainty over the nation’s economy, and this naturally makes people more conservative about spending. 

There are widespread lay-offs and pay cuts across different domains, forcing people to maximize their savings and avoid financial risks. 

It looks like the automotive industry would be one of the most affected ones. 

The fear of the second wave of the pandemic and the delay in the vaccine is expected to prolong this slump in the market.

It is reported that over 70% of new car sales in India stem from attractive EMI schemes offered by OEM-supported financial institutions or banks with aggressive loan campaigns. 

So, the automotive dealers fear that sales will be incredibly dull in the coming months. 

The order cancellations are expected to hurt the OEMs across the price segments. Carmakers who have been sitting on massive order backlogs before the lockdown are expected to be the worst hit. 

Economic Times reports, Kia with over 50,000 bookings for its Seltos, MG and Hyundai with over 20,000 pending orders for their Hector and new Creta respectively are likely to bear the brunt of widespread car booking cancellations. 

Despite the challenging circumstances, the Federation of Automobile Dealers’ Association (FADA) is confident that footfalls in the showrooms would increase once the lockdown 3.0 ends later this month. 

The quest for hygienic and sanitized means of transport is expected to make customers consider buying private vehicles. 

For OEMs and their dealer partners, 2020 will be all about surviving rather than reaping profit or registering sales growth.

While automakers face an uphill task in dealing with business-related challenges brought about by the Covid-19 pandemic and its fallout, both Volkswagen and Toyota are likely to bear the maximum brunt.

The Japanese carmaker has already painted a horrific picture of what is in store. 

According to a Reuters report, Toyota expects profit to drop by 80% to its lowest in nine years. 

This year, the company expects to take a massive 1.5 trillion yen ($13.95 billion) hit from a fall in global vehicle sales this year, due primarily to Covid-19. 

“The coronavirus has dealt us a bigger shock than the 2008 global financial crisis,” Toyota President Akio Toyoda reportedly said at a live-streamed media briefing.

The Germans may not fare much better.

According to reports, Volkswagen brand sales in Germany crashed by 68% in April.

Sales fell even more drastically across Europe and were down by 83%.

It is highlighted how the company – like most others – hardly sold any vehicles in countries like UK, Spain, France, and Italy, where the pandemic has been at its worst.

In the US, sales were down 35% in the month. Reuters reported that Volkswagen was burning through $2.2 billion a week due to production shutdowns in March itself.

Big players often weather the storm better than others but often tend to also take the bulk of the hit from global challenges – pandemic or otherwise.

Automotive analysts are united in predicting a tumultuous time.

Still, many also point to losses suffered by Volkswagen and Toyota as a reference point for what may yet to come for the entire industry.

Toyota, in particular, has officially stated that it expects sales to remain weak till December before reaching 2019 levels at some point in 2021.

It may well be the same for most other automotive players.

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Now before, you leave our website, we are curious.

Do you feel that the world will be able to contain this pandemic?

Which other businesses not mentioned above are also expected to be crushed due to the Coronavirus outbreak?

Share your story with us in the comment section below…. we will be right there with you.

Disclaimer

This article is intended for any person looking to work online and needs to follow all legal requirements set out in their individual countries. This article is not intended or made for kids in any way. If you have any questions, please ask in the comments or contact us at [email protected]!

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Courtesy:- https://www.businessinsider.in

https://www.latimes.com

https://www.wbur.org/bostonomix/

https://theprint.in

https://www.rushlane.com/car-bookings-cancelled-corona-12360374.html .

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