Do you know what is the one thing pandemic has done? The pandemic has exposed and tested many different industries and organizations. Also, it has brought back up certain issues that we are going to talk about. Therefore, we are going to share 10 issues by which industries or organizations have been negatively or just been impacted by a coronavirus. Let’s just jump to the ten industries.
1. Airline Industry
The first is the airline industry. It employees 10.6 million people. But you are also seeing the fact that the airlines and TSA report a 96% drop in air travel as pandemic continues. Moreover, we have looked at the TSA’s numbers to show that they get 2.2, 2.5 million flights a day. However, in mid-April, it got only 87,000 flights a day.
Now let’s look at why this industry was hit hard by the pandemic. Most people will not realize that airline industries have a margin of only 3.26%. It is really small to see it. Moreover, its costs and expenses are 96.74%. They barely make any money.
For instance, the companies who sell software are making a profit of 20 % out of 70 million and on the other hand, one more company making a profit of 5% out of 200 million. So the company that is doing 20 million profits more than a company doing 200 million because they are profiting.
Hence, the airline industry has a profit of 3.26 million, making it a historically wealthy industry.
2. Entertainment industries
Amazon’s merger with AMC is not good news. It is a kind of exploitation of the opportunity. Because Amazon is looking at buying AMC theatres. AMC’s stock jumped up this week. Now the question is as to why an amazon merger is off the table? Also, amazon gobbling up AMC theatres doesn’t make any sense.
The underlying reason is that Amazon is competing with big companies like Facebook, Google, Netflix but why is there so much power to pick up at AMC? AMC started a hundred years ago with now thousands of theatres running in the country. Also, they dictate and control a part of Hollywood. Amazon does nothing accidental but it is a smart move to have control over Hollywood.
3. Fitness Industry
Over 94-billion-dollar fitness industry is reinventing itself as COVID-19 spreads. Also, the 24-hours fitness prepares for bankruptcy while the gym starts to open. Similarly, peloton, a big name was doing good last six months amid the coronavirus. However, there was a sudden decrease in the ratio of its earnings.
But not because of the coronavirus. Rather corona has impacted positively because you can do spinning at home, take online gym classes, and whatnot. Therefore, it’s not good on part of the fitness industry to show a sudden rise and downfall in business.
4. Hotel Industry
The impact of corona on the hotel industry is 9 times worse than 9/11. As per the data, 64% of hotel rooms were being occupied in 2004. However, 50% of revenue declined in the year 2020. Meaning, 8 out of 10 hotel rooms are empty right now. This accounts for the worst occupancy rate ever, more than what was at the time of the Great Depression. Moreover, it is to see how these big hotels will adjust the wages, employment of waiters, and other losses caused by the pandemic.
5. Airbnb
Vacation real-estate markets are ‘toast’ because of the pandemic as Airbnb owners rush to offload their homes. So, Airbnb hosts are also planning to sell off their properties because of the pandemic. Moreover, Airbnb has reportedly dropped its internal valuation to 26 billion dollars as a coronavirus halts worldwide.
Now, what the Airbnb model is going to do? It is very difficult to say at this moment but is it seems like they will pivot with the situation soon. However, nothing seems good at their part right now.
6. Social Media Companies
Social media companies are too being crushed by the pandemic. President Trump gave an executive order on preventing online censorship. This just happened by the way. Moreover, a few weeks ago, Elon Mush blasts YouTube for banning California and doctors’ videos that claim physicians are being pressurized into putting the coronavirus on death certificates. Not only that, but they were urged to put an end on censorship.
Another recent event involving Twitter and Trump took place. Where Twitter placed a warning on Trump’s post, calling it violent. However, CNN posted an article titled as Trump is at war with truth, and not Twitter. In reply, Twitter said that Trump is censoring Twitter.
Meanwhile, when asked Trump about Twitter, he related it to free speech. Whereas Facebook says to take down things if they glorify violence. The result is that Trump is soon suing these companies by issuing its executive order.
7. Pharmaceutical Industry
The coronavirus outbreak has exposed the US’s pharma supply chain vulnerability. When it comes to the US, there exists no clear data regarding importation by the US. Instead, it only has data on the location of the factories that produce drugs. However, 72% of these manufacturers are located overseas. And 13% of manufacturers operate inside China. Meaning, if China ever wants to have a trade war with the US, it would be very ugly.
Elderly people relying on medicine will get affected. Therefore, the pandemic exposed that the US cannot afford to have 73% of API’s located overseas.
8. Sports Industry
As per the data, the sudden vanishing of sports due to the coronavirus will cost at least $12 billion loss. This was the news published on May 1. Looking at the recent figures, Rob Manfred, commissioner of Major League Baseball proposed that MLB offers players a sliding pay scale in return to play.
If you are making a 4-year contract of $563.5K, you will get $262K and the list goes on. So the point to come back and play for less is illogical. Similar to baseball, many other sports are hit by the pandemic hard. Over 300,000 runners showed up in Marathon, Tokyo back in 2019. Whereas, they only have 200 runners in 2020.
9. Commercial Real estate
The US commercial real estate braces for defaults as the pandemic cuts a heavy cash flow. It’s not just the small companies affected by the pandemic but big names too. Moreover, commercial real estates are facing a severe downfall.
10. Starbucks
Similarly, Starbucks asked for a break on rent for the next year. The company lost $915 million in sales due to store closure. Moreover, the company wants to renegotiate with the landlord on lease terms and conditions. Perhaps, the Starbucks is asking for 1 whole year extension. Because these real estates will eventually go out of their business if they do not pay mortgages.
So industries are taking a hit but not all of them. Some of them have to do with leadership.
UFC 249 generated over 700,000 paper view buys on ESPN for $64.99. It makes 45.34 million dollars. Moreover, he paid his fighters a high of $500K. The majority of his fighters have three and a half million salaries. This is a massive profit margin for the company.
Conclusion
Hence, the affected companies have to improvise and figure out a way to make their work at a time like this. These are the top 10 issues and industries affected by the pandemic. We need to focus on how to deal with them. Among all, the issues of hiring, firing, training, technology, etc., are the top.
Therefore, the pandemic has not just exposed industries but us. It is now challenging our capabilities as to how to sell products on zoom. Moreover, it is high time for every business to formalize policies accordingly. So that if any such condition happens to occur in the next 20,30 years, they already know how to deal with it.
