
Category Scan: Impact of Coronavirus on Labor Market and Corporate Travel

Covid-19: Labor Market Impact
Key Highlights: The labor market is severely affected by the Covid-19 virus, as it has further widened the demand-supply gap of labor across industries, especially labor intensive ones. It would lead to significant increase of labor cost, and disruption of supply chain.
Major Risk Factors
Industry Risk Drivers |
Comments |
Risk Probability |
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Almost Certain |
Likely |
Possible |
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Demand–supply impact |
Job demand (job vacancies) is high but labor supply is low, due to high inflation and unemployment rate. |
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Labor-intensive industries |
Industries, such as manufacturing, FMCG, hospitals, hotels & restaurants, IT, etc., are severely affected by the outbreak |
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Labor cost |
Increase in labor cost, due to labor shortages across industries and regions. Companies need to focus on strategic hiring plans and budget forecast |
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Labor supply chain |
Supply chains are disrupted and sourcing strategies are affected globally. |
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Misclassification of workers |
High chances of misclassification of temporary and permanent workers might arise, as employers would ask them to do overtime and neglect employment contract, especially for temporary workers. |
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Labor sourcing |
Disruption is being experienced in labor sourcing |
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Alternate work arrangements |
Employers would be dependent on alternate work arrangements to fulfill the tasks. |
Key Highlights: Temporary/contract and migrant workers are majorly affected by the Covid-19 virus, as their earnings are based on hourly or daily wages. Loss of employment opportunities in cities due to varying lockdown measures may lead to a temporary increase in the unemployment rate.
Category Impact
Key Categories |
Impact Level |
Outlook Impact |
Comments |
Migrant workers |
HIGH |
Short term |
Severely affected. Reports indicate many out-of-town workers are unable to travel back to economic hotspots due to varying degrees of lockdown. |
Permanent employees |
MEDIUM |
Long term |
They have been informed to work from home for a longer period to avoid spread of infection |
Temporary/contract labor |
HIGH |
Short term |
|
Freelancers |
LOW |
Short term |
Least affected, as they are free to work from home and do not have restrictions from employers to come to the office. |
Impact of COVID-19 on Corporate Travel Industry
Key Highlights: The impact of the COVID-19 outbreak on travel in-and-out of China has been significant, leading to postponement and cancellation of incentive travel programs.
Major Risk Factors
Industry Risk Drivers |
Comments |
Risk Probability |
||
Almost Certain |
Likely |
Possible |
||
Demand – Air travel |
Demand for air travel is affected globally. |
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Demand – Hotel booking |
Hotels are facing more cancellations |
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Air fare |
Air fares may go down, as oil prices have declined sharply, due to reduced demand for jet fuel. |
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Hotel rates |
Hotel prices will go down, as supply outpaces demand. |
Category Impact
Key Categories |
Impact Level |
Comments |
Airlines |
HIGH |
Highly impacted, as companies are canceling their travel plans to and from China. |
Hotels |
HIGH |
Restriction on travel will impact hotel bookings. |
Car Rentals |
LOW |
May get affected, due to travel cancelations. |
Impact of COVID-19 on Meetings and Events
Key Highlights: Demand for events and venues has come down. The cost per attendee will also come down, due to a decrease in prices of hotels and airfares. The usage of virtual meetings will increase, as it is the next best alternative available in the market.
Major Risk Factors
Industry Risk Drivers |
Comments |
Risk Probability |
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Almost Certain |
Likely |
Possible |
||
The demand for face-to-face events is expected to come down, due to safety concerns of the attendees. |
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Supply of venues |
The supply of venues and hotel rooms is expected to surpass the demand, resulting in price fall. |
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Cost per attendee |
As airfares and hotel rates are going down, the cost per attendee per day is also expected to go down. |
Category Impact
Key Categories |
Impact Level |
Comments |
Venues |
HIGH |
Venues will be severely affected, as there will be more cancellations. Venues will also have to mandate check-ups for the safety of the attendees. |
Exhibitions and tradeshows |
MEDIUM |
Many exhibitions and tradeshows are mandatorily having screening points and sanitization booths, in order to safe guard the attendees. |
Virtual meetings |
HIGH |
Key meetings and events happening in the affected areas are being conducted via virtual meetings platforms. This trend is expected to continue for a longer term. |
Cancellations and Postponements
Cancelation of Event |
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Resources |
Postponement of Event |
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The following resources are being updated regularly with timely information:
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Impact on International Events |
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Source: Beroe Analysis
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