Multinational Companies Reliant On Chinese Goods

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

ESSAY1
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.

ESSAY2
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.