More and more industries are facing the possibility of a shutdown within the year due to the Covid-19 outbreak. It is a challenge faced by many countries globally. One research shows more than 100 sectors received a record low level of downgrades within the first quarter of 2023. Here are five of the industries severely hit by the pandemic and have to deal with a potential economic downfall.
1. Entertainment and Tourism
With the implementation of community quarantine and social distancing, theme parks had to shut down. Since most countries have to close their borders to prevent the spread of the virus, overseas tourism will suffer more. There have been a lot of cancelations on flights and hotel bookings. Many small and medium tourist agencies felt its impact on their businesses.
Likewise, movies, concerts, sports events, art exhibits, and theaters experienced postponement of shows until further notice. Cinemas, stadiums, halls, concert grounds, bookshops, and museums are inaccessible to the public. Artists, athletes, and many workers in these businesses are losing. All of these resulted in billions of dollars in losses in both the entertainment and tourism industries.
2. Transportation and Logistics
The world is currently on a standstill since Covid-19. Land, train, sea, and air transportation have all ceased operations to the public. The ride-sharing market, like Uber, Lyft, Gett, and others, continues to lose revenues. It also resulted in a harsh decline in crude oil prices.
Transport activities are only allowed for health and frontline services. Most transport companies converted into freight-services to be able to continue with their operations. These businesses function to move medical supplies and essential goods to gain some profits amid the pandemic.
However, delays in the supply chain pose new threats to logistics in meeting the worldwide demands on medical supplies and equipment. If we cannot resolve the problem on Covid-19 soon, the fall of these businesses will continue.
Manufacturing companies halted production to prevent the spread of the virus. On the other hand, there have been reductions in the demands of non-essential materials. Consequently, disruptions on the schedules of many enterprises occurred. These uncertainties tremendously harmed the production and operation plans in the manufacturing industry.
Aside from this dilemma, companies need to continue paying for the social security and taxes of their employees. Rents, loans, and interest need to be paid, resulting in negative cash flows.
National governments started to recognize the impact of Covid-19, thus issued policies to support the manufacturing industry. Some corporations resorted to manufacturing medical equipment and supplies to help with the scarcity of these products. At the same time, they can provide jobs for their employees and make some incomes.
4. Catering and Food Services
Due to the closure of restaurants, the catering industry has been profoundly affected and are suffering heavy losses. Although some food chains sell their products online, sometimes at lower costs, the seriousness of the problem cannot be denied. Some resorted to food deliveries, while others completely shut down so as not to expose their staff to possible infection.
Nonetheless, when food businesses are allowed to open, changes in eating habits may need to be adopted in communities. And, our culture of eating out may never be the same. Social dining and sharing tables may no longer be allowed after quarantine.
Finally, bookings, dining out, and corporate events will be less of a trend. People will be more conscious of getting clean, quality food that comes from natural and organic ingredients, over star ratings. Restaurants may still find a silver lining in this new norm of eating habits.
5. International Trade
Before the pandemic hit the world, all countries were openly exchanging products and services with one another. Import and export activities then were dynamic. When the WHO announced that Covid-19 was already a pandemic, imports and exports were first to get the impact. All shipments had to be inspected and sterilized.
Deliveries have been delayed, worse, suspended. These problems subsequently affected the supply chain. Disruptions made it challenging to meet the worldwide demands on essential goods, medical supplies, equipment, and testing kits. The world expects that international trading will drop to as much as 30% within the year due to Covid-19.
And to beat the odds, countries are beginning to increase domestic production to meet local demands. Nevertheless, raw materials from other regions may still be needed for them to produce the required products of their citizens.
As the pandemic continues to hit more business sectors, companies are trying to adopt strategies to entice more customers. One of which is making their products and services online, enhancing deliveries, and offering promotions. An example would be giving a discount through Couponlawn, wherein consumers can get savings when they make purchases online. These strategies help businesses, big and small, to stay afloat in the middle of Covid-19.