Businesses and industries throughout the world are bracing for the economic impacts of the coronavirus as it disrupts supply chains, events and travel.
The airline industry, in one case, could take a huge hit of over $113 billion in revenue in 2020 with a drop in travel because of worries over the coronavirus. The fall in demand for flights has been hard and swift for airlines. The impact of the coronavirus seems to be speeding up and is forcing Delta Air Lines and United Airlines to make cuts to international and domestic flights.
The coronavirus is also crippling the $1.7 trillion tourism industry. Travel industry downturns in the past were triggered by disasters such as the 9/11 attacks in 2001, the SARS pandemic in 2002, and the Iraq war in 2003.
In Italy, which has experienced the largest outbreak of the virus beyond Asia, hotels said that more than 50 percent of reservations were canceled in three days last week. Other business sectors in Italy are also facing coronavirus-related impacts. Makers of all sorts of products in the country — from wine to cheese and leather shoes — are struggling with declining demand and disrupted production.
Beyond manufacturing, the coronavirus is also impacting events. Milan Fashion Week capped off with a not-so-typical site: Giorgio Armani presented his annual runway show to an empty theater.
The Italian designer noted in a statement across media channels: “The show will happen, but in front of an empty teatro. It will be live-streamed…on Instagram… and Facebook… Due to the status of the coronavirus in Italy, Mr. Armani has decided that he wants to safeguard the well-being of all his invited guests by not having them attend crowded spaces.”
Stateside, Target scuttled plans for an in-person investor and analyst meeting earlier this week because of worries over the coronavirus. A meeting had been scheduled in Midtown Manhattan for Tuesday morning.
And some public companies are reducing their revenue forecasts in light of COVID-19, the disease caused by the coronavirus. Financial technology provider WEX, in one case, said it now foresees first-quarter 2020 revenue to be roughly 2 percent to 3 percent under the revenue guidance provided in the past on Feb. 13.
WEX said in an announcement that its “underlying business trends remain strong as our U.S. Health and Corporate Payments businesses are performing better than expected. However, travel, and to a lesser extent shipping activity and fuel prices, are being negatively impacted by the coronavirus.”
Other companies are adapting their business procedures to contend with the coronavirus. Instacart, in one case, said it will roll out door-step grocery drop-off service to all customers over coronavirus worries. The service lets customers have the option to get groceries left on their doorsteps at a specific time instead of having them delivered by hand.
In other food vertical developments, some companies are seeing a boost from the coronavirus, as consumers stock up on the essentials. Campbell’s Soup, in one case, has officially announced that it is ordering more ingredients to try to get ahead of increased demand for its soups, snacks and sauces.
Campbell’s CEO Mark Clouse noted on CNBC that the bump-up in purchasing is still too early to be called a trend definitively. But, as of last weekend, it became clear that shoppers were not only purchasing a lot more soup and other readymade as well as shelf-stable products, the demand was coming in across all channels.
In addition, consumers are replenishing their supplies of hand sanitizers, with data from marketing firm Catalina, indicating that sales of the product jumped 619 percent during the week that concluded March 1, CNBC reported.
From consumer-packaged goods (CPG) to travel, a variety of industries are set to be impacted by the coronavirus. And, while some sectors could experience positive coronavirus-effects, such as a boost in demand, other verticals are bracing for negative impacts as COVID-19 spreads throughout the world.