Coronavirus risks pushing hotel, cafe, and bar businesses into extinction
The hospitality industry around the globe faces the unprecedented challenge of staying afloat amid the coronavirus outbreak.
Unlike the credit crisis of 2008 where businesses and people scaled back on spending following a crash in the financial system, 2020’s coronavirus pandemic is leading to people either being enforced or strongly encouraged to stay away from densely populated public spaces through social distancing or self-isolation.
Over 140,000 people across the world have contracted coronavirus and there have been 5,443 deaths. Out of those, more than 22,000 cases of coronavirus have been confirmed in Europe. Out of those, more than 1,200 who contracted the virus have died.
Therefore, for industries that rely on social encounters, such as bars, hotels, restaurants, it signals a troubling time for many businesses — large and small — and whether they will even be around by the end of the year. In the US, the coronavirus threatens the jobs of these 15 million workers, let alone globally.
It has become so troubling that companies and lobby groups have released letters and warnings to government about the survival of large parts of the industry.
This week, Andrea Johnston, the chief operating officer of online-restaurant reservation company OpenTable unveiled a set a data, which shows how the industry is being badly being hit by the coronavirus.
Over the last two weeks, reservations have been on a rapid slide, meaning fewer and fewer people are heading out in public and spending time and money in eateries.
“The COVID-19 pandemic is making many of us stay home and our community of nearly 60,000 restaurants is facing a severe reduction in diners,” said Johnston.
“Reservations stayed stable in February with a big increase on Valentine’s Day. But March brought new health and safety concerns around the world. Looking at comprehensive data from restaurants on our platform — across online reservations, phone reservations, and walk-ins — we note sharp declines over the last week.”
Lobby group UK Hospitality also warned that there will "a significant number" of jobs lost by May, if the laws do not change to protect businesses in the hotel, cafe, and dining chains amid the coronavirus pandemic.
According to a letter sent to UK chancellor Rishi Sunak seen by the BBC, UK Hospitality boss Kate Nicholls said that the impact from coronavirus was an "existential threat" to the sector and that news laws need to be made to allow for temporary staff redundancies.
"This is business-critical - these are cash businesses, put simply, if you don't have people coming through the door, you will run out of cash very quickly,” she said.
"So we are talking about intervention that is needed next week to make sure that in six to eight weeks these businesses continue to trade, and if we don't get that support, by May, we will be facing business failures and a significant number of jobs at risk."
The number of confirmed cases of coronavirus in the UK rose to 798 on 13 March. A total of 11 people have died. However, the true number of cases are estimated, by the government, to be around 5,000 to 10,000.
Each government has dealt with the pandemic differently. Some countries, like the US, have installed travel bans while some like Italy have enforced country-wide lockdowns.
While certain travel controls may be justified, “general travel bans are not seen as being the most effective,” said President of the European Commission Ursula von der Leyen. The EU has urged members states, instead, to focus on implementing health screening at borders instead, in order to continue to adhere to the freedom of movement.
For the latest news and updates on the coronavirus, check out the Yahoo News live blog on the subject.
