Coronavirus

Coronavirus Triggers Downturn In US Rideshares, UK Hospitality

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As the coronavirus continues to spread, the hospitality industry in the U.K. is taking a big hit while the U.S. sees a major dip in rideshare demands, according to reports on Wednesday (March 18).

UKHospitality, which represents more than 700 businesses, has urged Prime Minister Boris Johnson to implement special actions due to the “acute” economic impact on the sector.

The trade association’s letter, signed by UKHospitality CEO Kate Nicholls, said the hospitality industry was being hit hardest by mandates to prevent the spread of the COVID-19 disease caused by the coronavirus. 

“This is catastrophic for business and jobs,” she said. “The government has effectively shut the hospitality industry without any support.”

She called for “immediate and far-reaching support from the government, and meaningful business continuity measures.”

“We believe that urgent Government action is needed to support the sector” and the “wider economy” the letter indicated, as reported by Bloomberg.

The letter points out that hotel occupancy is down 15 percent in the first quarter and dining and drinking out dropped by about 7 percent. The trade association also said that reservations at hotels, restaurants, pubs and bars have fallen by up to 50 percent.

UKHospitality is asking the government for a moratorium on business rates for a minimum of three months as well as waiving business rates for areas subjected to quarantine. 

A value-added tax (VAT) cut for hospitality and tourism was also requested as a way to encourage reservations. 

“Hospitality businesses are on the front line, so to speak. There has been a significant impact on the sector. Bookings are down, footfall is down, and all signs point to it getting worse before it gets better,” Nicholls said in the letter.

In the U.S., rideshares are down some 21 percent as people work, eat and drink at home due to the coronavirus pandemic. In the seven days through March 16, people spent 21 percent less on Uber rides compared to the week before, data from Edison Trends indicated, as reported by The Wall Street Journal. Lyft saw a 19 percent drop in the same period.

Numbers had been up for both rideshare giants In the eight weeks through March 2. The median week-over-week spending went up 3 percent for Uber and 4 percent for Lyft.

Economic recovery in the U.S. is likely six weeks away, judging by China’s experience with the coronavirus.

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