US Industries Being Devastated by the Coronavirus

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.

The novel coronavirus also hit the U.S. just before the beginning of one of the industry’s biggest events — the NCAA Men’s Basketball Tournament. During the 2019 tournament, Americans wagered an estimated $8.5 billion on games. With the NBA, NHL, European soccer, and nearly every other major sporting event canceled for the foreseeable future, the sports betting industry has essentially dried up.

Sportsbooks in Las Vegas typically handle $500 million worth of bets in a given month. Though some UFC events are still ongoing as of March 16, Joe Asher, CEO of sports bookmaker William Hill, told Sports Illustrated that the entire sports betting industry will have “pretty much zero revenue” until sporting events resume. This could take at least six weeks.

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 will 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.

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.

It’s been some time now that health officials nationwide have urged social distancing, and movie theaters felt the impact of that recommendation. Now that the CDC has requested that Americans avoid gathering in groups of 50 or more, movie theaters 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 theaters have closed, and more are expected to follow suit. Major theater chain AMC has announced the closure of all U.S. theaters. Regal announced it would close all of its theaters until further notice, more than 500 in total, leaving over 25,000 employees without work.

The postponement or suspension of sports leagues like the NBA, NHL, XFL, and more have created a huge vacuum not just for the leagues and players, but also the wide-ranging ecosystem that has cropped up around them. FiveThirtyEight estimates that, since about 21% of the NBA season remained when games were halted, the league stands to lose $350 million-$450 million from ticket sales alone if those games are not played — and that does not even include lost playoff revenues.

The league could also lose up to $200 million in non-ticket revenue, from sources like parking, concessions, merchandise, and more. Still, many NBA franchises — along with their owners and star players — have committed millions of dollars to ensure that arena staff hourly workers are paid during the pandemic. There are an estimated 300 staff workers in a 20,000-seat arena, like those that host NBA games.

The NHL does not make as much as the NBA but could lose a larger share of its expected yearly revenue. Because the league does not draw as many TV viewers, it relies more heavily on ticket sales. The MLB could be affected as well, as it will not begin games until mid-May, at the earliest.

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.

A supply management survey found that three out of every four American businesses experienced a disruption to some part of their supply line due to the irregularities in the shipping industry stemming from the coronavirus pandemic. China is one of the world’s foremost shipping hubs, but COVID-19 has forced the country to close ports and send factory workers home. The International Chamber of Shipping said the pandemic has cost the worldwide industry around $350 million per week.

The outbreak has affected everyone in this highly globalized industry, and Americans are no exception. In January, North American transport volume was down 9.4% compared to the same month of 2019. There are over 225,000 Americans working in the freight transportation industry, and the disruption has jeopardized over billions in wages for these workers.

Oscar-winning actor Tom Hanks announced that he tested positive for the coronavirus. Consequently, production of the film he was shooting at the time was shut down. Hanks’ film was one of a dozens of films and TV shows that halted production — either out of caution or because a cast or crew member had symptoms, tested positive, or came into contact with someone who did. These films likely would have likely contributed billions of dollars to the U.S. box office and economy in other ways.

Each time a production shuts down, it puts hundreds of crew members and cast out of work. Movies often have well over 500 crew members, including drivers, lighting technicians, directors, production assistants, camera operators, and more. Some of the larger films that have extensive visual effects have thousands of people credited. There are over 220,000 Americans working in the film production industry.

As the COVID-19 pandemic lingers, the demand for cars is decreasing. Workers who are concerned about their job security and try to save their money for emergency use are less likely to buy a car. This jeopardizes the jobs of the nearly 1.3 million Americans who work in new and used car dealerships. Researchers have predicted that American auto sales could decline year-over-year by as much as 20% in 2020. The shares of General Motors, Ford, and Fiat Chrysler have all lost over 25% of their value since the beginning of March.

Automakers have also faced serious supply chain disruptions as parts imports from China have become much more difficult as the country grapples with the disease. Four out of every five cars made in the world rely on parts manufactured in China.

As people continue to work from home and avoid travel, the demand for oil and gas has plummeted. The International Energy Agency projects a decline in demand of 90,000 barrels of oil in 2020 compared to 2019. Prior to the pandemic, the IEA projected an increase in demand of over 800,000 barrels. The effects on the oil industry have been especially dire because China, the world’s top energy consumer, was the first to be hit as the source of the outbreak. The price of oil has been in an unprecedented freefall, selling for under $30 per barrel as of March 16.

The U.S. retail industry has been devastated by the coronavirus outbreak, and a number of stores have already had to close their doors. Apple has closed all stores outside of China until at least March 27, and other major retailers in fashion, sporting goods stores, and tech have made similar announcements, with more coming in every day.

Urban Outfitters, Nike, and other companies have announced plans to pay workers at least in the short term for lost wages. This is good news for the employees, many of whom are among the lowest-paid American workers, but it will, of course, mean the companies’ bottom lines will take a hit. One Jefferies analyst told CNBC, “With stores accounting for 75% of sales for most retailers, we anticipate massive EPS [earnings per share] declines for 1Q, especially as most retailers appear to be paying employees during the 2 week closures.”

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. 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.

As mass gatherings of people have been declared unsafe, many of the massive conventions that draw thousands of attendees from across the globe have been canceled. 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 biggest 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.

Between full- and limited-service restaurants, caterers, buffets, and more, well over 10 million Americans work in the food service industry. Major cities have ordered restaurants to only offer takeout options as a preventive measure. This could jeopardize billions in wages for employees, many of whom are hourly workers. Chinese restaurants have been particularly hard hit over unfounded stigmas related to the outbreak.

Nation’s Restaurant News reported that in Seattle, restaurants were expected to lose 20% of sales in the first week of March. By March 16, a dozen states had imposed restrictions on restaurants hosting dine-in customers. On the weekend of March 14, restaurants in most of America’s major cities reported a decline in occupancy of anywhere from 30%-64%. Research firm Challenger, Gray & Christmas reported that over 600 food service industry job cuts were directly related to the pandemic, and that 7.4 million jobs in the sector could either be cut or severely impacted.

Large theme parks have stopped welcoming guests in the wake of the coronavirus pandemic, closing a massive industry for the foreseeable future. Disney is by far the largest theme park operator in the world, with six parks — all of which were shuttered initially as the outbreak spread. Disney reported over $26.2 billion revenue from its parks in fiscal 2019. Dividing this evenly throughout the year would mean the company could lose revenue of around $500 million per week that its parks were closed, assuming the same earnings this year.

Other prominent parks have been affected as well. All SeaWorld parks are closed; Six Flags temporarily closed 10 of its parks; and Universal Studios closed its Orlando and Hollywood parks through the end of March. Nationwide, there are nearly 200,000 people who work at theme parks, many of whom could be out of work throughout the worst of the coronavirus outbreak.

Gyms were already facing challenges from home exercise companies like Peloton, and social distancing recommendations and the fear of the spread of the coronavirus have further added to the challenges large gyms and group fitness classes face. Gyms and boutique fitness classes have ballooned into a $94 billion industry that is now in jeopardy.

Equinox had to close its gyms in New York, New Jersey, and Connecticut, and Barry’s Bootcamp cut capacity in half. In Los Angeles, the mayor ordered all gyms to be closed. Gold’s Gym and Orangetheory shuttered all corporate-owned locations. Planet Fitness stock lost 48% of its market value.

As the coronavirus devastates the U.S. economy, companies will likely pull back on expansion, leaving a huge gap in the construction industry. Two large airlines, Delta and United, each announced plans to reduce capital investment by $2 billion each as a result of the pandemic’s economic impact. Companies in many other sectors are expected to follow suit.

Smaller construction companies may have to lay off workers as their supply of equipment and parts from China is disrupted. There are an estimated 7.6 million Americans working in the construction sector who could be affected by these changes.

With Americans working from home and staying in instead of visiting bars and restaurants, ride sharing companies like Uber and Lyft are seeing their potential ridership dissipate. Both companies announced they would stop letting different users share the same car.

Uber has pledged financial assistance to drivers who are quarantined and not able to work, though this would likely not impact most of the estimated 900,000 U.S. drivers. Many drivers are reporting 50% declines in income as fewer people use ride sharing services. Uber’s stock has also cratered, going from over $40 per share in February to less than $19 as of March 17.