The covid-19 pandemic has changed the entire planet overnight, in the sense that some industries that we took for granted and that have been there since the day we were born, are disappearing, morphing or about to vanish forever. Who of us could have imagined at the start of 2020 that by the end of the year, we may never do or see those things ever again? Let’s look at some examples of how the old models are falling away and new paradigms are emerging. In this 4 part series, I will briefly discuss the industries and cultural norms that are being forced to adapt or die in the wake of this historic global lockdown and consequent economic fallout occurring all around us today and going forward throughout 2020.
As corporations realize quickly the need to pivot now after lockdown and pandemic has changed the world, some are repositioning themselves or reinventing their strategies. Others who are unable or too slow to adapt, are vanishing like the dinosaurs. And if historians are correct, then the extinction of the dinosaurs also happened in the blink of an eye. Perhaps their was an asteroid that hit the earth and the explosion was so great that it instantly eviscerated an entire dinosaur species in mid stride on that very day. Or perhaps an ice age arose and suddenly froze the woolly mammoths in mid munch, as they chewed their grass, so that their fossils can be found still with undigested food in their mouths.
Similarly, in an apparent overnight shift, our world has changed, possibly for ever. In the space of a few months, perhaps six by now, if we take the start of the year as the arrival of the pandemic, even though it was only officially announced months later, like three months ago, some mainstream industries have already collapsed. The first which comes to mind in the airlines. Globally the airline industry employs over 10 million staff, but due to lockdown they are experiencing a 96% drop in activity and revenue. Some will never recover. Even national airline carriers are going bankrupt, particularly when you consider that many were already subsidized. The profit margins were so small to begin with, along the lines of 3%, that they won’t survive this massive hit to their income. Staff lay-offs in the millions may occur. And even if the lockdown were lifted on international travel right now, how many people would consider just going on a holiday, getting on a plane with 200 other people in such close confined quarters, while the rumor of the virus still lingers. Only those in need of business travel may be bold enough to take a flight. Why risk contagion now? We have already been socially engineered to fear the invisible enemy.
Another dinosaur is the movie theater industry. It was already in decline, now that we have Netflix or all the other home based facilities to watch our favorite movies for entertainment. Now there is even less attraction to going to a large public theater to sit among dozens or hundreds of strangers in a closed room. We have been conditioned to stay home. Hollywood itself may have to rethink its strategy, along with the entire acting industry. CGI could be the new thing. Less human risk. Add to that other potentially terminal entertainment giants like Disneyland for example. Even Las Vegas itself was basically shut down throughout the lockdown.
And this brings me to the hotel industry, who are suffering up to nine times worse now that they were during the aftermath of 9/11. Obviously with no travel, there is no need for hotel bookings. As a result they are apparently up to 80% empty. The hotel industry is worse off now than it was during the Great Depression around the early 1930s. Around 70% of employees are being laid off. Add to that the newer Air BnB industry – basically collapsed overnight. There was a unicorn of an industry that blossomed over the past decade into what seemed to be the new norm. People bought real estate just to turn it into an Air BnB. It looked like the new big thing. But then the pandemic came, the planet was shut down, and now it’s dead, a short-lived concept that fell at the first asteroid or should I say black swan event to land on our unrippled waters. The same people are now rushing to sell those homes like wildfire.
As a result the housing market may get flooded with homes and prices may dump. It’s a buyers market potentially. Much like the second hand car industry, now flooded with all the cars from the bankrupt car hire companies, like Hertz, who are dead after over 100 years of successful service. No one could have ever seen that coming, or been able to predict it or position themselves for such an outside event like the one we are experiencing now. Those businesses and in fact entire industries are vanishing before our eyes. They were there when we went into lockdown, but they will be gone as we emerge into the new light of day on the other side. And that’s just the start. In the next posts I will mention still more sectors of our life that may disappear in the blink of an eye, so stay tuned and watch out for the part 2.