Multinational Companies Reliant On Chinese Goods

Running head: ESSAY
Globally how does the fear and reality, of the Coronavirus impact the hospitality industry?
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Author Note

1ESSAY
Introduction
The coronaviruses (CoV) belong to a large virus family that result in signs and
symptoms ranging from cough and common cold to more severe illnesses. The 2019-20
outbreak of coronavirus has been identified by the World Health Organisation as a public
health emergency. The first case was reported on December 1, 2019, in Wuhan, Hubei of
China and not less than 110 territories and nations have been affected with this virus. An
estimated 4,000 individuals have died from this outbreak and there is no current antiviral
treatment or vaccine (Wang, Horby, Hayden & Gao, 2020). This essay will highlight the
impact that coronavirus outbreak has created on multinational businesses, food supply, and
the hospitality industry.
Impact on multi-national businesses
In recent times, economy of China is intricately associated with the economy of the
entire world, with as much as 17% share of the world-wide GDP with business accounting
for roughly 34% of the domestic GDP, in comparison to the figures during the SARS outbreak
in the year 2003 (Singh, 2020). It is anticipated that the global economy would rise by 3.1%
in this year, with the GDP of China decreasing from 5.9% to around 5.4%. In addition to the
impact of the outbreak on GDP, it is likely to affect macroeconomic indicators such as
interest rates and oil prices that are expected to reduce owing to the decreased demand of
oil from China which is one of the largest oil importers (Jones, Brown & Palumbo, 2020). As
claimed by the Organisation for Economic Cooperation and Development (OECD) businesses
might get their work suspended and the staff might be asked to remain at home to prevent
virus transmission, thus affecting trade.

2ESSAY
Figure 1- OECD growth forecast
Source- (Jones, Brown & Palumbo, 2020)
Fear of this outbreak has also prevented people from buying Chinese goods, lest
they get exposed to the infection. Not only has Apple temporarily shut its retail stores and
factories in China, other companies like Nike and Adidas have also reported about their
business getting disrupted due to this outbreak (Horsley, 2020).
Impact on hospitality service providers
Hotel chains have been found to cut back on their development predictions for the
present quarter and are observing a decrease in residences and incomes, following the
outbreak of the virus with both leisure and business trip annulments by inbound travellers
and upcoming bookings getting hindered. According to recent reports, the Baird/STR Hotel
Stock Index decreased to around 11.7% in February to an estimated amount of 4,296
(Hospitalitynet.org, 2020). Moreover, the hotel stocks also decreased owing to the
increasing COVID-19 concerns internationally. The Chinese had spent an estimated $277
billion in the year 2018, in international tourism and roughly 166 million outbound travellers
had been predicted in 2019. Therefore, restrictions on travel would result in a loss of around
$69 billion in the global tourism industry, thus affecting travel and airline providers. With
spread of the virus, restaurateurs and suppliers in China have battered months of virtually
zero sales. Furthermore, theatres, amusement arcades, cinemas, public saunas and
convention centres have also been closed due to this outbreak. As claimed by Perrett and
Gilbert (2020) there has been a sharp decline in travel to and from China, the centre of this

3ESSAY
virus outbreak, in addition to other nation. Some significant conferences that have been
cancelled are the Mobile World Congress, Barcelona and the Geneva Motor Show. Hence,
the impact on hotel and travel industry will severely affect global economy. In addition,
some major sporting events that have been affected by this outbreak are namely, Swiss
Super League, Chinese Super League, Japan's J.League, 2020 World Athletics Indoor
Championship, UAE cycling tour, and China Masters tournament.
Impact on food supply and local food export
Apprehensions are snowballing over the effect of coronavirus outbreak on the
beverage and food sectors, both internationally and domestically. Major food supply
companies have already been subjected to severe impacts, from scarcity of food supplies to
travel restrictions, augmented with the heightened shipping costs. The situation is expected
worsen over time owing to the fact that there will occur disruptions to food supply chains
that will probably choke production by a significant extent (Chen, 2020). All across the
globe, the food retailers are taking efforts to supervise their supply chain, in addition to
taking precautionary measures for ensuring that the consumers are able to gain access to
necessary food products. China, the centre of fish processing, however is facing substantial
food supply disruption. Though food prices are comparatively stable in Wuhan and China
since the virus outbreak, online survey reports highlight that the poultry industry is under
stress owing to insufficient feed supply and timely marketing interruptions, which might
result in the development of a food supply hiccup, thus threatening food security. Chinese
households had consumed around 28% agricultural products in 2017, however, if the
outbreak persists in spring season, the production of staple crops like rice, wheat and
vegetables will suffer a major setback and might even cause food market panic (Holmes,
2020).
New business opportunities
One major business opportunity is the fact that Google has capitalised on
coronavirus, in addition to providing schools and enterprises G Suite enterprise features
until the month of July. It has been announced by Google that access shall be provided to
the Hangouts Meet features that will allow the enterprises to permit as much as 250
persons for participating in a call, saving meetings, and live streaming content, considering
the impact that coronavirus outbreak has created on educational institutions and businesses

4ESSAY
(Marks, 2020). The outbreak has also improved business of medical suppliers who are
working overtime for the development and distribution of gloves and face masks to the
public (Biron, 2020). Furthermore, hand sanitizers are being sold at high prices amid the
outbreak of the virus (Baynes, 2020).
Conclusion
Thus, it can be concluded that coronavirus outbreak has been identified as a major
challenge all across the globe. Apart from the negative health consequences that are
associated with this virus outbreak, the hospitality industry is also severely affected due to
coronavirus. In addition to the decrease in GDP and fall in economy, food supplies, hotel
industry, and sports arena are suffering huge impacts. However, there are few businesses
that are utilising this scenario and rapidly growing.

5ESSAY
References
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Chen, K. (2020) If coronavirus disrupts staple crop production the impact on food security
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6ESSAY
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