By: First Union
How the Coronavirus Can Affect Business 2022
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The Coronavirus is causing quite the uproar worldwide, not to mention endless amounts of anxiety in our communities, small and large. The outbreak first started in Wuhan, China, but cases have been identified in a growing number of other locations internationally, including in Washington state, California, New York, Florida, and more. Cities are on lockdown, travel restrictions have been put into place, and the stock market is taking a heavy hit. As of March 11, 2020, there has been a record of 116,460 cases, 4,091 deaths, and 47,619 active cases worldwide and the World Health Organization (WHO/) declared the outbreak a pandemic.
With this pandemic lingering, people are not only worried about their health, but how they will be able to pay for their health insurance and business expenses. The stock market is dropping, federal banks are decreasing rates, and businesses are shutting down for a short period to prevent the spreading of the virus. The main question here is: which type of businesses are mostly affected by the coronavirus and in what ways are they being affected?
Travel and Tourism
The travel and tourism industry has been hit hard over the past few months and is continuing to lose business daily. Since people are postponing travel, industries affected include airlines, hotels, tour operations, restaurants, and transportation services. The travel and tourism industry is one of the largest in the world, worth a whopping $ 5.7 trillion in revenue. The industry is responsible for an estimated 319 million jobs and there is currently no sector more at risk from the coronavirus.
According to some experts, it could be the worst crisis for the industry since September 11, 2001, terrorist attacks. If the coronavirus continues to spread worldwide, the industry will continue to suffer.
Recent concerns sparked the cruise industry earlier this month when over 600 Carnival's Diamond Princess passengers were forced to remain on their ship in chaotic conditions after testing positive for coronavirus. The CDC has advised all non-necessary travel to be rebooked and has asked people to not go on cruises or book cruises for the foreseeable future. It is more than likely that those who have booked cruises will hear from their cruise line that they are working out a plan to reschedule their sails.
The automotive industry has been crippled by the virus as sales in China dropped 92% in the first half of February (2020/). China is the world's biggest car market and Wuhan, the city at the center of the outbreak, is known as a "motor city" for being home to auto plants including General Motors, Honda, Nissan, Peugeot Group, and Renault. As part of the nationwide shutdown, auto companies like Tesla in Shanghai postponed the production date. Workers are being quarantined, which in turn affects supply lines at various factories that are struggling to reopen.
Recently, there have been confirmed cases at a Kirkland, Washington based long-term facility. The facility faced 19 cases and at least seven deaths tied to the coronavirus. A comprehensive checklist was released in early March for home healthcare and hospice. Senior living and skilled nursing operators are some of the only groups to regularly provide updates on how the flu impacts their businesses, hence, operators are well-versed in disease and infection control. The Centers for Medicare & Medicaid Services (CMS/) recently announced various actions it is taking to limit the spread. All health care providers must immediately review their procedures to ensure compliance with CMS's infection control requirements, as well as the guidelines from the CDC.
As factories close, more industries like major smartphone providers will feel the impact. The majority of smartphone parts are assembled in China with some being entirely manufactured in the region, so the effects are starting to become clearer. For example, Samsung temporarily shut down a flagship store in Shanghai, as well as a staggering $2.2 billion worth of loans to suppliers facing coronavirus-related issues. Even the Mobile World Congress event scheduled in Barcelona February 23, 2020, has been canceled. Discussions of the cancellation came after big parties pulled out like Facebook, Sprint, and Cisco.
From luxury brands to fast-food chains, these industries are taking a hit. Some of these companies include Walmart, Burberry, Home Depot, McDonald's, Walgreens Boots Alliance, Starbucks, Target, and Ikea. In response to the virus, over half of the Starbucks locations in China have been closed, while operating hours of all coffee shops are subject to modification. According to Burberry CEO Marco Gobbetti, "The outbreak of the coronavirus in mainland China is having a material negative effect on luxury demand," said in a statement the retailer provided to Business Insider. "While we cannot currently predict how long this situation will last, we remain confident in our strategy."
It is evident businesses from around the world are tremendously affected by a coronavirus. All of these specific industries described will continue to feel the effects as more cases and deaths are reported. Conferences, events, and releases of new products could continue to be postponed and canceled. However, these industries are taking all of the precautions needed in order to be as prepared as possible.
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