Coronavirus

Travel, Retail Take A Hit From The Coronavirus 

coronavirus-economic-impact

Companies and sectors worldwide are encountering the economic effects of the coronavirus as it spreads throughout the globe. The travel industry, in one case, could take a forecasted $820 billion revenue hit as international business trips, for the most part, have been suspended.

Three quarters — or 75 percent — of companies in a poll noted they sidelined trips to Hong Kong, Taiwan, China and other places in the Asia-Pacific region.

President Donald Trump forbade travel for 30 days from 26 countries in Europe, with the exclusion of Britain. And Princess Cruises stopped operating its cruise ships for two months after two boats transported passengers who had the virus. In addition, Airbnb has seen its bookings drop by 40 percent.

In the food and beverage sector, select Starbucks coffee shops are shuttering seating areas and restricting offerings to drive-through as well as mobile orders. And food delivery platform Grubhub, along with mayors of large cities, has rolled out a economic relief plan for independent restaurants that face negative coronavirus impacts. Mayors from Boston and New York City, among other cities, are participating in a program in which Grubhub will halt the collection of a maximum of $100 million in commission payments from restaurants nationwide.

And in grocery, Costco is going at full speed as shoppers visit the warehouse club to keep their pantries stocked amid the outbreak of COVID-19. CFO Richard Galanti said on an earnings call last week per a report that the retailer’s procurement team is “working, in some cases, around the clock to procure supplies for both existing suppliers and from other sources where possible” to keep meeting demand.

In the workplace, employers are working to make sure that their staffers are healthy in the face of the coronavirus. Apple, in one case, is providing its hourly staff, with the inclusion of retail workers, unlimited sick time off in the event they have symptoms of COVID-19.

On-demand economy companies DoorDash, UberPostmatesInstacart, and Lyft are mulling the establishment of a fund to compensate workers who are quarantined because of or fall ill from the coronavirus. The news comes as after a New York City Uber driver had a positive test result for coronavirus.

In the markets, Wall Street banks are in discussion with regulators about putting aside rules against brokers telecommuting. A change would let daily traders work from their residences.

And, in recent days, there has reportedly been a noticeable pullback in initial public offerings (IPO) amid volatile markets. This is said to run a wide range of verticals and sectors, showing that worries and challenges are not confined to one end market or class of firms.

Government has also taken action to help mitigate some of the coronavirus’s economic impact, with President Donald Trump introducing multiple executive actions. Trump called these actions an “unprecedented response” to the coronavirus outbreak.

At the same time, banking regulators crafted a joint statement letting banks know that they would not be punished for assisting borrowers contending with the coronavirus’ financial consequences. They would offer “appropriate regulatory assistance” to impacted institutions.

In Europe, the Bank of England reduced the country’s interest rate by 50 basis points to 0.25 percent with a move intended to reduce the COVID-19 economic impact. Also, the Monetary Policy Committee of the central bank unanimously voted to implement a funding program with SMB incentives.

In other news, as the coronavirus upsets volatile markets and interest rates get smaller, the world is entering uncharted territory. The stage may be set for multiple ripple effects, one expert told PYMNTS in an interview.

From the markets to retailers, the coronavirus may have widespread effects on a variety of industries and verticals.

 

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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