You’ve heard it before and you’ll hear it again, COVID-19 is changing the world at every level. In this weekly report, Hawke Media seeks to help entrepreneurs and executives understand the impact of COVID-19 on their businesses, including where to find opportunities in the midst of this pandemic.
Millions of individuals, thousands of businesses, and hundreds of governments have been left in a precarious situation where people’s lives and livelihoods are at stake. It has forced governments to pony up and fill the gap for individual taxpayers and businesses by offering a lifeline.
In the United States that came in the form of the CARES Act, an economic stimulus package to help lessen the economic burden of widespread job losses, closures, and limits to operating capacity.
The average single American with no dependents will receive up to $1200 as a stop-gap to help with expenses while many are out of work, increasing $500 for every dependent claimed.
American businesses experiencing or preparing for hardship can apply for the Paycheck Protection Program (PPP). A 1% interest business loan meant to cover the cost of operating expenses like payroll (primarily), mortgage interest, rent, or utilities.
Tech giants like Facebook are also offering a helping hand to small businesses in this time of dire need with $100 million in grants, of which nearly 40% are earmarked for women-owned businesses.
Currently, there are over 500,000 confirmed cases of COVID-19 in the United States, increasing by approximately 20-30,000 cases each day. Efforts are ongoing to “flatten the curve” and continue toward a trajectory of normal functioning.
On the West Coast, California, Oregon, and Washington governors have teamed to build a joint roadmap to reopening the economies of the participating states. However, they are cognizant of the effort it will take at every level to return to business as usual.
“COVID-19 doesn’t follow state or national boundaries,” the governors added. “It will take every level of government, working together, and a full picture of what’s happening on the ground.” – Source: WWD
On Tuesday, April 14th, 2020, California Governor Gavin Newsom announced his plan to ease physical distancing and allow businesses to begin to open again. Governor Newsom outlined a 6-point plan with measures that need to be met and sustained before California’s safer-at-home order can be lifted or relaxed, predicated on science and public health criteria.
While this plan lacks specific dates and details, Governor Newsom did mention that physical distancing has started to show some signs of success as Californians have “bent the curve”, effectively changing the model for the spread of the virus in the state.
This bodes well for other states and localities observing physical distancing and their ability to get some businesses back on track following the easement of the emergency orders.
Similarly, on the East Coast, states are forming a consortium to form their own road map to reopening. New York will be joined by New Jersey, Connecticut, Pennsylvania, Delaware, and Rhode Island in putting together a working group of health and economy officials from each state.
With it, coronavirus has brought unprecedented hurdles for most businesses and some surprising results for others. The impact varies widely across industries and is beginning to be quantified in a number of interesting ways.
The Not So Good News
Leisure & Hospitality
It’s not difficult to imagine why the leisure & hospitality industry is suffering. People are staying home. Hotels, Airlines, Bars & Restaurants, and tourist destinations are all suffering because their revenue stream has been cut off.
Take Las Vegas for example. The city would normally be bursting at the seams with tourists to the tune of about 3.5 million people in the average month, now the city is practically a ghost town with virtually no visitors.
“The industry made up one-fifth of Southern Nevada’s gross domestic product (GDP), or roughly 18.4 percent, in 2017. Tourism generates roughly $58 billion annually for Southern Nevada and supplies nearly 370,000 jobs, representing about 40 percent of employment in Clark County, according to the LVCVA.” via Fox News
U.S. and Canadian airlines stand to lose $21.1 billion in revenue this year due to COVID-19, according to a dire prognosis from the CAPA Centre for Aviation, with many going bankrupt by the close of May 2020.
Many major U.S. airlines are cutting capacity for April and May in an attempt to hedge major revenue loss for the foreseeable future.
The Other News
People are on their devices more than ever, and it’s clear that a shift in thinking and strategy has to follow to reach people effectively and engage with your audience.
Tech (Hiring) Is Booming
Big Tech companies are taking advantage of the economic downturn and attempting to raise their ranks. Companies like Facebook (10,000), Apple, and Amazon (20,000) are all looking for engineers, data scientists, software designers, and cybersecurity experts.
This comes as promising startups freeze hiring and lay off employees in the wake of the crisis. With the scarcity of talent in these fields, this is the perfect time for big companies to bring in top talent.
Amazon still seems to be riding a wave up and to the right as they plan to hire an additional 75,000 employees after their last surge of 100,000 in March.
The massive online retailer is reifying its commitment to 3rd party sellers by offering a number of benefits to help weather the blow from COVID-19 including:
- Waiving the April 15 long-term storage fees for inventory stored in the US and Europe.
- Pausing repayments and interest until April 30 for sellers with direct loans from Amazon Lending.
- Waiving April fees for those using Seller Account Management or the Launchpad program.