Coronavirus Impact: Hard Hit Sectors

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As countries around the world continue to enforce travel restrictions and as cities in the US continue to shut down, there are certain industries that will be more greatly affected than others. So, we dove into the apparel industry, hotels and airports to see how these sectors have been affected so far from the virus. 

Airports 

With both country-wide and international travel coming to a sudden stop, airports have been greatly affected by the spread of coronavirus.  When we analyzed seven airports in largely affected areas and saw significant decreases at each of the locations.  

Airports visit decreases were already visible at the end of February, but we see the largest decrease year-over-year when we look at the second week of March.  Each airport analyzed saw a traffic decline of over 26.0%. San Francisco Int’l Airport, Seattle Tacoma and JFK have seen the most severe decreases, with JFK taking the heaviest hit with a 41.9% decline. San Francisco Int’l isn’t far behind with 41.0% decline with Seattle Tacoma rounding out the top three hardest hit.   

Location does matter in this case, but the impact stretches beyond areas that are hard hit. While we see larger traffic drops in cities that have been more directly impacted such as San Francisco, Seattle, LA and New York, there’s no denying the massive effect it’s having on the entire county and travel economy. 

Hotels 

As one would expect, as airport visits decline, so did hotel visits. Hotels around the country have been hit hard by the virus with many recently announcing full closures.  Looking at hotels around the country, the Sheraton in Times Square, NYC, saw a nearly 70.0% decline in traffic for the second week of March. Unfortunately, this shouldn’t come as a surprise, since Times Square is one of the world’s biggest tourist attractions. So, as overall travel decreases, tourist visits decline, in turn leading to empty hotels. 

Hotels in largely impacted areas are seeing more significant declines. The DoubleTree in Seattle saw visits decline 64.9% during the second week of March. The Four Seasons in San Francisco and the Sheraton in LA also saw a significant decline during that week of 60.1% and 50.7% respectively.  But, it’s clear that the hotel industry as whole will be greatly affected as the virus spreads throughout the US. 

Apparel

Another industry with a tough short term outlook, is the apparel industry.  With the inevitable shutdown of shopping centers around the country and many mall closures already in effect, the apparel sector is expected to see a significant drop in traffic.  If we take a look at some of the most popular brands in the apparel industry we already see significant declines in traffic. While most retailers managed to remain in the positive for the final week of February and into March, all saw huge year-over-year declines in overall visits during the second week of March. 

Nordstrom and Neiman Marcus saw the most severe traffic declines, with 43.0% and 41.4% respectively. Macy’s, a brand that’s been in the news quite a bit lately, also saw a decline of 35.3%.  And, despite remaining on top for most of the year across the apparel sector, visits for Ross Dress for Less decreased nearly 20.0% year-over-year for the second week of March. 

Takeaways

While there are sectors that have shown continued strength during the spread of coronavirus, others will continue to struggle as new restrictions take hold around the world. But, with inevitable re-openings of stores, and lifts on travel bans hopefully in the coming months, it will be extremely important for these sectors to have rebound strategies in place to handle the the return of customers and travelers. 


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