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

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By: Beroe Inc --

23 February, 2020

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covid-19 impact assesement

 

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

Almost Certain

Likely

Possible

Demand–supply impact

Job demand (job vacancies) is high but labor supply is low, due to high inflation and unemployment rate.

     

Labor-intensive industries

Industries, such as manufacturing, FMCG, hospitals, hotels & restaurants, IT, etc., are severely affected by the outbreak

     

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

     

Labor supply chain

Supply chains are disrupted and sourcing strategies are affected globally.

     

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.

     

Labor sourcing

Disruption is being experienced in labor sourcing

     

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

  • Severely affected, as companies and factories have temporarily shutdown their  operations
  • Contract manufacturers are  mainly dependent on temporary/contract for production of phones, automobiles, textiles, etc.

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.

     

Demand – Hotel booking

Hotels are facing more cancellations

     

Air fare

Air fares may go down, as oil prices have declined sharply, due to reduced demand for jet fuel.

     

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.

 

covid-19 impact

covid-19 impact

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

Almost Certain

Likely

Possible

Demand for face-to-face meetings and events

The demand for face-to-face events is expected to come down, due to safety concerns of the attendees.

     

Supply of venues

The supply of venues and hotel rooms is expected to surpass the demand, resulting in price fall.

     

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.

 

wuhan virus

covid-19 impact

Cancellations and Postponements

Cancelation of Event

  • Credit Suisse Group AG’s annual Asia investment conference, scheduled for March 25–27, 2020, in Hong Kong has been cancelled
  • Citibank’s annual Asia Pacific Investor Conference, scheduled for February 19–20, 2020, in Singapore has been cancelled
  • ISPO Beijing, a sports exhibition, scheduled for February 12–15, 2020, at NCIEC Beijing, has been cancelled

Resources

Postponement of Event

  • The International Exhibition Logistics Association (IELA) postponed its Operations Summit 2020, planned for February 13–15, 2020 at Bangkok’s Mövenpick Hotel Sukhumvit, to later this year, according to an e-mail sent to speakers and delegates
  • The National Association of Travel Agents Singapore (NATAS) has rescheduled its conference, originally planned for February 21–23, 2020
  • TCT Asia, an additive manufacturing event, planned for February 19–21, 2020 in Shanghai, has been postponed, with a new date expected to be announced soon

The following resources are being updated regularly with timely information:

Impact on International Events

  • Mobile World Congress, the telecom industry show that attracted more than 100,000 attendees and 2,500 exhibitors last year, has seen at least six large exhibitors to cancel their participation in the February 24–27 event at Fira Gran Via in Barcelona: Amazon, Ericsson, LG Electronics, Nvidia, NTT Docomo, and Sony. In fact, Sony was scheduled to host a product launch at the show, but now announced that the launch will be held in Japan and broadcast the show via video

Source: Beroe Analysis

 




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