Industry Sectors Most Impacted by COVID-19: United States

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Industry Sectors Most Impacted by COVID-19: United States

The reasons why the restaurant industry, the casino gaming industry, the airline industry, the hotel industry, the cruise industry, the auto industry, the oil and gas sector, the retail industry, the technology sector, theme parks, the fitness industry, and transportation industry are, or will be, affected by the COVID-19 pandemic have been curated and presented below. Additionally, a high level overview has been presented surrounding some of those twelve industries, and which ones might be potentially and possibly receptive to an approach by a management consulting service during a COVID-19 or a crisis similar to it, and the reasons why.

Restaurant Industry

  • Most restaurants are likely to see a steep drop in customers as more consumers are choosing to stock up on groceries and have their food delivered. The Congressional Budget Office estimated, in 2005, when the avian-flu pandemic occurred, that spending on food services, arts and accommodations would temporarily decline by about 80% during a major pandemic.
  • According to Mollie O’Dell, Vice President, Communications & Media Relations for the National Restaurant Association, “America’s restaurant and food-service industry is home to nearly 16 million trained and skilled employees, and the industry is a key economic driver in communities. We are carefully monitoring the impact that COVID-19 will have on our workforce.” The restaurant industry will likely see at least a $225 billion loss and will be compelled, as a result, to eliminate between 5 to 7 million jobs over the next three-months, according to early economic forecasts.

Casino Gaming Industry

  • The United States casino gaming industry, valued at $261 billion, has been completely shut down due to measures taken to halt the spread of COVID-19. Casinos in Las Vegas and other major gaming locations have been shut down, and most employees have been let go. Massachusetts and Illinois casinos in were told to close for fourteen days, and Maryland's betting facilities, which includes all casinos and racetracks, were ordered to close until further notice.
  • Major casino hotel chains like MGM and Wynn had already announced temporary shutdowns, but the Venetian and some others attempted to stay open until the Governor’s announcement.
  • All the United States commercial casinos and additionally ninety-seven percent of America's tribal casinos, have closed. That represents 973 casino closings which translates to 98 percent of all gaming properties nationwide.
  • The U.S. economy will lose $43.5 billion in economic activity, if the country's casinos stay shuttered until May 2020.
  • The primary reason behind the devastation rippling across the casino gaming industry is obvious. Most people are restricting their outdoor activities and only go out for necessities, and many local governments have required their citizens to shelter in place. One bright spot, is online gambling. In America, states with legal online options will likely be seeing a boost in revenue as more and more people stay home. Those living in states without it may instead search for illegal, off-shore options.

Airline Industry

Hotel Industry

Cruise Industry

Auto Industry

Oil and Gas Industry

Retail Industry

Technology Sector

  • Many Chinese factories in locked-down areas have closed operations since late January. This has had a major impact on the ability of many American tech companies to continue producing their products regularly.
  • Predicted to decline by over ten percent, the manufacturing and production of video game consoles, smartphones, and smartwatches are all in jeopardy. In fact, because of an iPhone shortage, Apple could lose as much as $67 billion. Nvidia, a graphics card producer, reduced its predicted earnings for the first quarter of 2020 by $100 million, blaming the pandemic as interfering with its supply chain.
  • Seattle, Washington happens to be one of the areas hardest hit by COVID-19. Many major tech companies are headquartered in and around that area which is taking a toll on day to day operations. Microsoft said it would continue to pay its 4,500 hourly employees, even as it sent many workers home. This will impact their profits.

Theme Park Industry

Fitness Industry

Transportation Industry

Potential Industries Receptive to Management Consulting Firms

In light of the unprecedented and rapidly changing operating environment, consultancies are having to work up plans to deal with the coronavirus (COVID-19) outbreak to protect their staff, clients and stakeholder communities as well as to ensure business resilience as the global economy possibly moves towards a recession. However, one thing is clear, most of the industries mentioned above might be amenable to a management company approaching them in the wake of this pandemic to get them back on track.

With few exceptions, the twelve industries being battered by COVID-19 are being hurt overwhelmingly for one reason: the American government's orders for the closing down of businesses, social distancing, and mandated self-isolation. Additionally, all these industries are consumer driven and rely heavily on how confident consumers feel about the economy. For example the casino gaming industry is extremely tied to consumer confidence, so if the US economy does not bounce back quickly after the COVID-19 crisis is over, then this industry may continue to suffer. On the other hand, food and restaurants industries typically do well as people need food and can only cut spending by so much. As much is speculative as to how quickly the US economy will recover and how the jobless rate will be, understanding which industries would be in need, and therefore be open to spending on a management consulting service, is difficult to predict, but some assumptions can be made. Insights on that are presented below.
The development and the trajectory of the coronavirus in the United States (and worldwide) will probably require social distancing measures to be continued for an entire year or longer until a vaccine can be produced to avoid grave public health and economic consequences. The economic costs of social distancing will be felt drastically across every state's economy as companies close and employees are told to stay home. Based on the insights offered in this brief, it is likely almost all industries will require the services of a management consulting service to navigate this Black Swan event.