I don't see travel picking up any time soon - not even during summer months. People are scared and that won't change soon. I'm not worried any of the hotels will stay closed, of course, but I can see them operating with a significantly reduced workforce for a long period.
2 replies (most recent on top)
Yes, I think there’s no doubt they will. Furloughs have reached critical personnel at the company headquarters now. More experienced managers will likely be replaced with inexperienced people at a lower pay scale to restart operations later this year; or they will be re-hired at a fraction of their former salaries.
It is an absolute certainty. Here's how it's going to play out:
Not trying to be a Debbie Downer, but it'll get MUCH worse before it gets better. 'Bailouts' will be forthcoming, but even with bailouts,
1) the Fed and States DO NOT have enough money (your/our taxpayer money!) to save every single company and job out there, and
2) many companies will STILL fail after getting bailout money because consumer, business and government purchasing dynamics and 'power' will undoubtedly change drastically in the future i.e. MANY products and services will NOT be purchased because they're NOT ESSENTIAL (e.g. leisure travel, that Smart phone upgrade, that new car, the latest version of software or hardware, that takeout meal, etc, etc). People and companies that already ARE NOT bringing in revenue and money , even if for a month, will have a very DEEP HOLE to dig out of
Just think about it in one of a couple ways - - > 'Dominoes falling,' or 'IF, THEN':
- IF someone loses their job, THEN they won't have money to pay their bills
- IF someone doesn't pay their bills, THEN the provider of the product or service cannot just 'give away' their product or service for free without going out of business
- IF businesses cannot generate revenue because people or companies CAN'T PAY FOR or afford their product or service, THEN the business MUST reduce costs (e.g. layoff people) or risk going out of business
- IF people and businesses can't pay their bills/debts, THEN it's inevitable that they won't be spending on DISCRETIONARY items and non-essential products or services
It doesn't take a PhD in Economics to understand that this is how the dominoes will fall. It's been proven many times before. Lessons Learned abound. However, the really bad thing about the unprecedented time we're going through is that intentional (and necessary) mass shutdowns of so many businesses has never happened in our lifetimes before, and even the so called "experts" on Wall Street, in academia, in Think Tanks, etc. can't predict or estimate the economic carnage that'll result after the pandemic is defeated. For example, the manager of the world's largest hedge fund, Ray Dalio, readily admits "we got it wrong...we weren't prepared for this scenario." Back in January he railed against people who were conserving their cash and NOT in the stock market. He's changed his tune just a little since then
The bottom line is "This to shall pass," BUT many, many businesses, large and small alike, will NOT survive this devastating economic atomic bomb. Expect to see thousands of "BKs" (bankruptcies) as that'll be the only viable way out for many businesses to shed their debt (including their stocks). This will lead to many businesses also getting "junk grade" credit ratings which many funds and money managers simply cannot take the risk of investing in, or banks not willing to lend to them. To put it in simple terms, it's like your FICO score going from an 800 to 600 overnight
I hope and pray that this will end much sooner than later for humanity's sake