The impact of coronavirus on british businesses - Jochen Schaefer-Suren
The impact of Coronavirus on British Businesses
Jochen Schaefer-Suren Follow
Mar 17 · 4 min read
It’s fair to say that this topic is going to need to be revisited several times over the coming
months as the situation appears to be worsening, and then changing, daily.
Coronavirus is a respiratory illness that originated in Wuhan, China, and as recent events
have shown it is extremely difficult to contain. But essentially it is a strong form of the
However, if we look at where we are now and where we know from studying what’s
happened abroad will happen here, we can draw some conclusions about the impact of
Covid-19 on British businesses.
In general it’s fair to say that the actual medical threat to the country and the economy is
far less threatening that the panic and hysteria in the media which has evolved. In fact to
date only 6000 people have died worldwide over the last 3 three months when every
year on average 100.000 people die every month from car accident. But as a result of the
panic travel and tourism has been badly affected and major companies are bracing
themselves for the fall-out. CEO of Hotels and Leisure Industry for Principal Real Estate
Europe, Jochen Schaefer-Suren, says that for hotel travel trade and leisure industry it
looks bad as governments seem to have overreacted. The closing of borders by the US
and European countries makes the cure worse than the disease.
“Indeed only 5% of people infected needed to be hospitalised and these are especially
older people over 70+ as well as people with underlying health conditions. So yes it is a
health risk but not a reason to shut down whole countries which lead to much more
severe economic damage as well as damage to people’s normal life”
It’s not just the hotel and leisure industry that’s going to be hit hard by this virus. We’ve
already seen it provide the final nail in the coffin of budget airline Flybe — although, in
truth, that airline was already struggling for survival.
It’s not just the big airlines though, the big airlines such as British Airways and Ryanair
are experiencing a massive drop in bookings and cancelling flights as a result. Last week
the airlines forced the competition watchdog to relax the rules stating that they had to
fly 80% of their advertised flights, as so many of those flights were flying completely
empty it was unsustainable (as well as being environmentally damaging). Elsewhere, a
Norwegian airline has moved all its staff onto part-time hours for the foreseeable future
and EasyJet is imposing a pay freeze on staff as consumer demand falls.
The airline industry will definitely feel the results of this in their annual results
announcements — as will the travel industry too. As well as fewer people booking
holidays, and many people cancelling the holidays they’ve already booked, the
coronavirus is also delaying the sales of major travel companies themselves. Saga, the
specialist UK based over 50s travel group, has put the sale of one of its main companies,
worth £100 million, Titan Travel, on hold as the fallout from the pandemic grows.
Over this last week, global stock markets have all suffered their worst performance in
more than a decade, plummeting to levels not seen since 2008’s Global Financial crisis.
This prompted Donald Trump to announce a US$1.5 Trillion financial market support.
Closer to home, the UK markets initially showed some signs of recovery after drawing
down assurances from The Bank of England’s Mark Carney that financial institutions will
bolster efforts to stem the economic effects of the virus. However, with more recent
announcements of major sporting events in the UK cancelled including the Premiership
and Football League matches for a month, the market is again showing signs of decline
and there’s a genuine belief among economists and businesses that coronavirus could
lead the global economy into a recession.
The recent UK Budget and Bank of Engla dattempted to help to prevent this, by lowering
interest rates from 0.75% to 0.25% and also by announcing a raft of measures designed
to boost confidence in businesses however, is it enough and will it have any effect?
With cases of coronavirus rising, events being cancelled, and people staying at home
more the economic outlook for industries like the tourism, leisure and hospitality
industries is poor so confidence building measure by the government such as funding
small and medium sized business to allow them to pay payroll etc are urgently required.
Within the hospitality industry, with people staying at home restaurants and cafes suffer
— and will even close temporarily, as is the case is in Italy. It’s also a problem coming up
for the take-away industry too, with it becoming increasingly likely that all stores will
have to close in the near future.
Whether these companies can keep going through this, or whether this is in fact the
death knell for significant numbers of small — and large — British businesses remains to
be seen. The only thing we can be sure of at this stage is that the situation is going to get
worse in the short term not necessarily for medical reasons but because politicians and
the media have overreacted across the western world. Medium term like during the
global financial crisis will be back to normal which I would expect will take 12–18
Jochen Schaefer Suren Coronavirus Covid 19 British Business
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