Industries hit hardest by the coronavirus

Which Industries have taken the biggest hit during coronavirus outbreak?

The novel coronavirus, COVID-19, which has been designated a global pandemic by the World Health Organization, is having a devastating impact on the U.S. economy. After peaking at 29,000 in February, the Dow Jones Industrial Average fell below 21,000 by mid-March – a nearly 30% drop. On March 16, the Dow fell by almost 3,000 points, the most significant single-day drop in history. 

As the U.S. tries to stem the spread of the virus and contain the outbreak, life is slowly grinding to a halt – and with it much of the economy. While all industries have been affected by the COVID-19 pandemic, some bear the brunt of the downturn much more than others. 24/7 Wall St. reviewed industry publications and data from the Bureau of Labor Statistics to determine the U.S. industries being devastated most by the outbreak.

The restaurant industry is one of the most exposed industries to significant upheaval as a result of the pandemic, as the Centers for Disease Control and Prevention has recommended avoiding groups of over 50 people. Some cities and states have told restaurants to switch to take-out only. Millions of jobs in the sector could either be lost or severely impacted by the outbreak. 

As the government continues to introduce measures to slow the spread of the virus and promote the best ways to guard against it, some employers may be reluctant to let their staff go just yet. Coronavirus is fast disrupting Americans' daily lives, from school to work to going out to socialize— and job experts say that will spell trouble for some U.S. workers more than others.

Restaurants and bars in seven states –– California, Connecticut, Ohio, Illinois, New Jersey, New York, Maryland, Massachusetts and Washington have been ordered to close except for take-out services. The governors of New York, New Jersey and Connecticut also agreed to settle movie theatres, gyms and casinos in addition to banning gatherings of more than 50 people, valid Monday at 8 p.m.

"Declining consumer confidence, potentially severe retail-traffic declines, and temporary store closures are evolving risk factors that depend on uncertain variables like the geographic spread of the virus and the timing of containment/eradication solutions," analysts at Cowen, an investment bank and financial-services company. Wrote in a note this month.

This did not show up in last week's jobless claims report where jobless claims dropped 4,000 to 211,000 in the seven days ended March 7. The total number of people already collecting unemployment benefits declined by 11,000 to 1.72 million. That number reached nearly 6.6 million near the end of the Great Recession.

Thomas Simons, the senior money market economist at Jefferies LLC, expects to see an increase in jobless claims in Thursday's report. "That will be the start of a trend," he said, adding that "The travel, leisure & hospitality, airline, and other industries are going to experience layoffs, as well as small businesses in areas where large public gatherings have been cancelled or postponed."

Already, there have been 634 job cuts in the U.S. tied explicitly to the outbreak of novel coronavirus as of March 15, according to Challenger, Gray and Christmas, a Chicago-based outplacement and career-transitioning firm. Challenger arrived at that number by tracking company announcements and news reports that explicitly link job layoffs to the coronavirus outbreak.

In the wake of the coronavirus pandemic, few industries have fallen as far and as fast as tourism. The technological revolution that brought us closer together by making travel and tourism easy and affordable—a revolution that fueled one billion trips a year—is helpless in halting a virus that demands we shelter in place.

Taking a snapshot of tourism losses is difficult, as the data changes as quickly as the virus spreads. If the pandemic continues for several more months, the World Travel and Tourism Council, the trade group representing major global travel companies, projects a comprehensive loss of 75 million jobs and $2.1 trillion in revenue. Losses come daily; as of April 2, British Airways is reportedly poised to suspend 36,000 staffers.

The coronavirus and measures to curb its contagion are slashing into some of the country's biggest industries and threatening recession for the U.S. economy.

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Economic activity faces threats from supply chain disruptions and stay-at-home orders across the U.S. The initial virus-driven hit to tourism dragged travel and tourism industries lower through late February. Intense selling of airline and cruise stocks added to the market's plunge into bearish territory and prefaced the airline industry's request for federal aid.

Actions taken in March have shifted the economic hit to more domestic industries. Restaurant and bar activity tanked after major cities called for residents to avoid being in large groups. The hotel industry also faces a significant slowdown as Americans stay home and tourism grinds to a halt. The Trump administration has hinted at offering multibillion-dollar loans to ailing industries, but data suggests their downturn has already begun. Here are four charts detailing the coronavirus's hit to the restaurant, hotel, airline, and cruise industries.


The airline industry will likely be especially hard hit by the pandemic, as international and even domestic flights are restricted. The International Air Transport Association projected that the U.S. and Canadian airline industry could lose as much as $21.1 billion in revenue. The worldwide industry could see a decline in passenger revenue of nearly 20% under the extensive spread scenario, which would result in an estimated $113 billion in lost revenue. The CAPA - Centre for Aviation said most airlines in the world would likely go bankrupt by the end of May 2020.

United Airlines said it was bracing for a $1.5 billion revenue drop in March 2020 compared to March 2019. It also plans to cut capacity in half for April and May. Other U.S. airlines are planning similar actions, as well as freezing hiring and asking employees to take unpaid leave. In what may be a sign of things to come, Norwegian Airlines laid off 90% of staff on March 16. As of 2018, there were over 445,000 workers in the airline industry. A group representing many of the country's largest airlines asked the government for $25 billion in grants and $25 billion in low or no-interest loans.

Airline activity has loosely followed case spikes in China, Italy, the U.S., and the U.K., diving as countries ban international flights and companies pause non-essential travel.

China posted the most significant initial dip as the country took immediate and strict containment measures to curb further infection. Italy has since seen its airline activity slump the most as its virus death count soars past China's, according to flight capacity data from OAG.

The U.S. and U.K. have only recently seen a downturn in flight capacity as the virus's contagion intensifies. The countries' trend lines more closely match the trend seen around the globe, and the moderate downward slope suggests the airline industry could be operating below its 2019 capacity for months to come.

If people continue to delay travel plans and cancel flights and hotel rooms, service-industry workers will likely be laid off, experts say. Health professionals advise people to only travel if necessary to lower their risk of catching the virus, but also to prevent the risk of spreading it. The virus has a median incubation rate of 5.1 days, a recent report found, which means people could travel without showing any symptoms at all.

There are no CDC restrictions for consumers on travelling within the U.S. But because "crowded travel settings, like airports, may increase your risk of exposure to COVID-19," the CDC has advised travellers to consider certain factors. "Although the risk of infection on an aeroplane is low, travellers should try to avoid contact with sick passengers and wash their hands often with soap and water for at least 20 seconds or use a hand sanitizer that contains 60%–95% alcohol," the CDC stated on its site.

Companies have cancelled or postponed public gatherings, including the Coachella Valley Music and Arts Festival, one of the largest music festivals in the country.

America's travel industry is among the hardest hit. The U.S. Travel Association projects a loss of 4.6 million jobs through May, a figure likely to increase. U.S. weekly jobless claims skyrocketed to a stunning 6.6 million, doubling in a week and by far the most significant spike in half a century. Tourism decline is a driving reason for job losses in states including Nevada, where Las Vegas casinos and large hotels have gone dark.

On March 29, in an attempt to contain the virus in America, President Donald Trump extended national limits on travel, work, and gatherings of more than ten people for at least another month—and perhaps into June. Summer vacations could be on hold. "This is the worst time of the year for this to happen," says Isabel Hill, director of the Commerce Department's National Tourism Office. "This is the season—spring and summer—when the travel and tourism [industry] makes a significant amount of [its] revenue."

This impact would depend on how long the epidemic lasts and could still be exacerbated by recent restrictive measures, such as those taken by the U.S. administration on travel to Europe, WTTC's managing director Virginia Messina told Reuters. "Certain measures are not helping, and they can prompt the economic impact to be way more significant," Messina said, referring to the U.S. decision.

She argued that such policies are too generic and not proven to be useful to contain the virus. She also said that such restrictions could complicate travel by medical experts and delivery of medical supplies.

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The U.S. hotel industry employs over 1.6 million Americans, making it the ninth-largest sector in the U.S. in terms of total workers. But as people have stayed home, demand for hotels has declined sharply. In the first week of March, there was an 11.6% decline in revenue per room available in U.S. hotels compared to the same week of 2019, according to hotel research firm STR.

In response, hotels in New York City, Seattle, Knoxville, Tennessee, and more have begun to lay off dozens of workers. Hotel workers in major tourist destinations have been told to brace for job losses as well. The hotel chain Marriott just announced plans to lay off tens of thousands of workers. Industry groups urged Congress to pass a supplemental aid package to help hotels through the pandemic.

As of Monday, "hotels have already lost $1.5 billion in room revenue, which equates to one million jobs that have or will be eliminated," said Chip Rogers, president and CEO of the American Hotel & Lodging Association, an industry trade group based in Washington, D.C. "What we are most concerned about right now is the impact on our employees and small business owners."

Not all U.S. hotels have been affected in the same way. Larger upscale hotels, which tend to hold conventions, were severely hit. Hotels in big cities and resorts have also seen a more considerable drop. The lodging sector—which has suffered as much as transport, with companies such as Marriott losing as much as 75 per cent in revenue—is also a big recipient of the bailout. Hotels (and restaurants) can benefit from the $350 billion lending program for small businesses and from a slight adjustment to federal tax law that could save them as much as $15 billion.

Hotel use has steadily dropped throughout the country as Americans self-quarantine and travel activity halts. Business revenue and occupancy posted sharp declines in the week ended March 14, according to data firm STR.

Some hotel chains in the U.K. have considered turning empty rooms into temporary hotel beds as the coronavirus spreads further across Europe. Best Western Great Britain, Hilton, Holiday Inn, and Travelodge are among the firms in talks to aid the National Health Service with rooms for patients and medical staff, The Guardian reported Thursday.

Movie Theatres

It's been some time now that health officials nationwide have urged social distancing, and movie theatres felt the impact of that recommendation. Now that the CDC has requested that Americans avoid gathering in groups of 50 or more, movie theatres have no choice but close down. U.S. box office revenue for the weekend of March 13-15 came in at just over $54 million, the lowest since September 2000. For context, no weekend box office in 2020 pulled in less than $80 million.

The effects could stretch for months, as blockbusters like "Mulan," "A Quiet Place Part II," "Fast 9," and the latest James Bond film, "No Time to Die," were slated to be released in the coming weeks, but all these releases were pushed back. Over 100 theatres have closed, and more are expected to follow suit. Major theatre chain AMC has announced the closure of all U.S. theatres. Regal announced it would close all of its theatres until further notice, more than 500 in total, leaving over 25,000 employees without work.


After a luxury Diamond Princess ship became the first large outbreak cluster outside China, with at least 634 confirmed COVID-19 infections among passengers and crew and two deaths, the cruise industry has taken a huge hit. More recently, a Grand Princess cruise docking in Oakland resulted in 28 cases of the disease. As of March 16, there were at least seven cruise ships in limbo because passengers tested positive or were showing symptoms of the virus, and no country was willing to take them in.

Shares of three major cruise companies – Royal Caribbean, Carnival Corp., and Norwegian Cruise Line Holdings – dropped over 50% in the wake of the COVID-19 pandemic. Industry group Cruise Lines International Association said the cruise industry contributes $53 billion to the U.S. economy every year. The White House has made clear it intends to help the industry weather the financial difficulty with some sort of relief bill.

But cruise companies face an uphill battle to recover. Cruises have become beleaguered poster children of the pandemic as news stories chronicle the plight of ships carrying infected passengers. At press time, Holland America's Zaandam and Rotterdam ships were finally granted permission to disembark at Port Everglades in Fort Lauderdale, Florida, after the Coast Guard balked at allowing them to dock. On March 8, the Center for Disease Control and the State Department told Americans to stop taking cruises and published a detailed explanation of why those ships increase the virus's "risk and impact."

The effect on the cruise business has been swift. Companies have lost $750 million in revenue since January, according to reports. Shares of the big fish—Royal Caribbean, Carnival, and Norwegian—have dropped by 60 to 70 per cent. Future losses will mount, and sailings will likely be postponed at least until July or August.

Unlike the airlines and hotels, cruise companies aren't eligible for the $500 billion in aid because they don't count as American enterprises. Major companies locate their primary headquarters overseas, with ships flagged and incorporated in other nations. This means they pay almost no federal taxes and avoid many U.S. regulations.

The cruising industry faces more hurdles in the future. "Governments may have an increased interest in illness reporting and sanitation inspections," which means more regulations, says Ross Klein, a Canadian academic at the Memorial University of Newfoundland who studies the sector.

Restaurant Bookings

The most drastic hit to activity may be among U.S. restaurants. Several cities recently forced the industry to shift all business to take-out and delivery only in an attempt to beat community spread. The announcements brought restaurant bookings through popular app OpenTable to an almost-complete standstill by March 17.

Activity in most cities began to slow through the end of February, likely a byproduct of new cases growing in the U.S. Seattle faced the most significant initial hit as it hosted the most examples for weeks before New York City became the virus's U.S. epicentre.

Many restaurants are also likely to be hit by a drop in patrons as more consumers are stocking up on groceries and having food delivered. In 2005, when the avian-flu pandemic occurred, the Congressional Budget Office estimated that spending on food services, arts and accommodations would temporarily decline by about 80% during a major pandemic.

"America's restaurant and the food-service industry is home to nearly 16 million trained and skilled employees, and the industry is a key economic driver in communities," said Mollie O'Dell, a spokeswoman for the National Restaurant Association, a Washington D.C.-based industry organization. "We are carefully monitoring the impact that COVID-19 will have on our workforce."


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Many Chinese factories in locked-down areas have closed operations since late January. This has had a significant impact on the ability of many American tech companies to continue producing their products regularly. Production of video game consoles, smartphones, and smartwatches are all predicted to drop by over 10%. Apple could lose as much as $67 billion because of an iPhone shortage. Graphics card producer Nvidia lowered its projected earnings for the first quarter of 2020 by $100 million, saying the pandemic is disrupting its supply chain.

Apple, Samsung, and Google all closed corporate offices and factories in China. Many major tech companies are headquartered in and around Seattle – one of the areas hardest hit by the virus. Microsoft said it would continue to pay its 4,500 hourly employees, even as it sent many workers home.

5G's lightning-fast speeds, near-instantaneous communications, and increased connection density make it primed for remote interactions, which has become top of mind for many organizations and enterprises as caution mounts over the spread of the virus. Two key areas — telehealth and teleconferencing — are becoming critical for enterprise operations amid the pandemic, and we think that increased dependence on these areas will help strengthen the appeal of 5G.

The technical superiority of the new standard empowers physicians to diagnose, treat, and operate on patients without the need to be physically near them. We've already seen such use cases for 5G to combat coronavirus in China: In January, telecoms ZTE and China Telecom designed a 5G-powered system that enables remote consultations and diagnoses of the virus by connecting physicians at West China Hospital to 27 hospitals treating infected patients. Given the ability of 5G to expand the reach of expertise and services offered by hospitals in this time of increased need, we expect more hospitals will look to tap into 5G to take advantage of the benefits provided by the new standard.

Many employers have increased their reliance on enterprise teleconferencing tools — such as Microsoft Teams, Google Hangouts, and Zoom — as their employees switch to remote work due to public health concerns. We expect that employers' dependence on such tools during the coronavirus pandemic will strengthen the case for 5G connectivity in the home — and in the office, as enterprises recognize the value that teleconferencing tools offer. That's because a 5G connection will be able to provide real-time and uninterrupted communication that's not possible with most wired connections today. 


As mass gatherings of people have been declared unsafe, many of the large meetings that draw thousands of attendees from across the globe have been cancelled. The cancellations of tech conferences like E3, SXSW, and more have likely cost local economies over $1.1 billion. In 2019 alone, SXSW's full-time and seasonal workers had an economic impact of over $150 million on the Austin, Texas, economy, according to consulting firm Greyhill Advisors and SXSW.

The cancellation of the E3 conference has also cost the video game industry its most significant week of the year. New games and consoles are often unveiled at the event, which usually hosts over 65,000 guests a year. Facebook and Google also had to scrap their own conventions. This moratorium on large gatherings could devastate the 55,000-person industry of convention and trade show organizers in the U.S.


Much of the nation's $261 billion casino gaming industry has been shuttered because of measures taken to contain the spread of the coronavirus. Casinos in Las Vegas, Atlantic City, and other major gaming destinations have been closed, and some staff members have been furloughed or laid off. All casinos in Massachusetts and Illinois were ordered to close for two weeks, and Maryland's casinos, racetracks, and other betting facilities were ordered to close indefinitely.

Manufacturing and construction

"In construction and manufacturing, you can't just hire someone with no experience," she said, "especially if they expect a rebound." Employers "will be hesitant to lay off workers" to cut costs, Farooqi said. They will instead be betting on people taking preventative measures in an effort to stop the spread of COVID-19, the disease caused by the virus SARS-CoV-2.

Some 7.6 million Americans work in the construction sector and earn an average hourly wage of $31.35, according to Bureau of Labor Statistics data from February's jobs report; 12.8 million Americans work in the manufacturing sector, earning $28.20 an hour on average. (That's slightly above the national average hourly wage of $27.69.)

Supply-chain disruptions due to the coronavirus are likely to increase the cost of business for manufacturing and construction companies, said Elise Gould, an economist from the Economic Policy Institute, a progressive think-tank based in Washington, D.C. Companies like Hasbro Inc. HAS, -4.95% and Apple AAPL, -1.43% may have to spend more money on inputs that they would otherwise import from countries like China.

Hasbro has previously said that China is responsible for about two-thirds of its global sourcing. Additionally, Apple announced over the weekend the temporary closure of all stores outside of China, to help minimize the spread of the coronavirus.

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