Wedding dresses, luxury real estate, tourism and education strike because of the impact of coronavirus
From wedding dresses to mortgage interest and an already slow luxury real estate market, tourism and even educational programs, the effects of the coronavirus start to influence companies in the US quickly.
Economic casualties are on the increase due to virus-like flu, which has affected more than 64,000 people around the world, including 15 confirmed US cases in seven states, and 1,383 people died.
That means that the economic impact of American companies that rely on Chinese tourists is expected to linger for months, unless the corona virus – now called COVID-19 – is brought under control, economists and supply chain experts say Washington Post.
Chinese factories were scheduled to reopen February 10 after a new lunar year holiday was extended due to concerns about the corona virus.
But because many employees in China are unable or unwilling to return to work in a vast quarantine region, the resumption of routine operations in many workplaces has been delayed, the Post reports.
Some in the wedding dress industry that rely on Chinese suppliers say they felt the impact of the disease.
“Everything we get [that comes] from China dramatically affects us, “Angela Jourdan, who runs the Enchanted Bridal Boutique in Bakersfield, California, told KTVU.
Most of the wedding dress in her boutique is made from Chinese fabrics, including silk, chiffon and satin, the outlet reports, and the coronavirus outbreak slows shipments for those materials and jackets.
Enchanted bridal boutique in Bakersfield, California, which has taken a hit because most of the dresses are made in China
Brides must now postpone their weddings because the production time reduces them to 2021
“You have no air travel, you have no employees to work on the jackets, you have no production,” she said.
Dresses are delayed by no less than six weeks, which, according to Jourdan, can put marriages back months.
“Your marriage can be delayed until 2021, you can lose deposits, and so on,” she told KTVU.
Apple is expected to deliver five to 10 percent less in stock this quarter, such as AirPods and iPhones, as their production has also been delayed
Another major delay may come for electronics, as technology companies have been faced with a shortage of parts made in China that can affect the supply of popular electronics.
Analysts say the virus could cause Apple to ship five to 10 percent fewer iPhones this quarter and affect its plans to boost the production of its popular AirPods, the economist reports.
Less free Chinese tourists also contribute to the consequences for American companies.
Bookings from China to America, with the US as the dominant destination for Chinese citizens, fell 64.1 percent between January 20 and February 9, according to ForwardKeys, a travel analysis company that follows scheduled flights.
Looking ahead, bookings lag behind 63.2 percent for March and April, according to ForwardKeys data provided by DailyMail.com.
Automakers are also experiencing delays due to factory closures due to concerns from Corona.
Tesla acknowledged on Thursday in its annual application that the outbreak could have a material adverse effect on its activities.
Tesla acknowledged on Thursday in its annual application that the outbreak could have a material adverse effect on its activities. The Shanghai Gigafactory is displayed
In the Risk Factors section of the 10-K declaration for 2019, Tesla has included – for the first time ever – a mention of ‘health epidemics’.
The Shanghai factor, which was closed since the extension of a Lunar New Year holiday, was reopened this month with the blessing of local officials.
But the electric vehicle manufacturer now says it is unknown if and how global supply chains, especially for car parts, can be affected if such an epidemic persists for a longer period of time.
“We may incur costs or delays in relation to such events beyond our control, which may have a material adverse effect on our activities, operating results and financial condition.”
A delay can also influence the compensation of Tesla founder Elon Musk, which results from options and depends on the achievement of performance targets.
Musk was on its way to becoming the richest man in the world in April, as the company continues to grow at its current pace.
A delay in the reopening of the Tesla factory in Shanghai can also lead to compensation from Elon Musk, which results from options and depends on the achievement of performance targets. Musk is pictured at the World Artificial Intelligence Conference in August
LUXURY REAL ESTATE AND MORTGAGE RATES
The decline in Chinese visitors already had an impact on the US housing market.
Mortgage interest rates have fallen and an already slow market for luxury real estate has in recent years been dependent on an injection with Chinese buyers, Realtor.com reports.
“China is the main source of foreign demand for real estate,” said Lawrence Yun, chief economist at the National Association of Realtors.
‘Rich Chinese buyers often buy luxury real estate, such as high-rise apartments, in California and New York.
“The high-end market can expect softer because of this.”
The impact of fewer tourists from China is felt most in the tourism industry in the US, with national cancellations as a result.
The manager of the Best Western Queens Court in Vlissingen told the New York Times that cancellations and no-shows had begun before the travel restrictions came into effect, reducing business by 25 percent in the last two weeks of January.
The Wyndham Garden Newark Airport in Newark, New Jersey, which also relies heavily on Chinese tourists, is likely to lose $ 250,000 to $ 300,000 over the next 90 days, said Dwayne Cronce, CEO.
He said he was already faced with a loss of more than $ 100,000 due to cancellations and no-shows.
“Like everything else, it will come true by itself,” he said. “But the first impact? Very difficult.’
Tourism experts believe that theme parks such as Disneyland and Universal Studios will be hit hard
Now that a fall in tourism is starting to reach large cities that attract large Chinese tourists, the consequences are expected to continue to take their toll, especially for the hospitality and entertainment industry.
“This is definitely a big blow to tourism in Los Angeles,” says Sean Maharaj, director of the global management consulting firm AArete, to the Los Angeles Business Journal.
In 2018, the most recent year for which data is available, Chinese nationals were the second largest group of international visitors to Los Angeles, according to the Los Angeles Tourism and Convention Board.
Chinese travelers spent nearly $ 1.5 billion in the city that year, the organization said.
“If this continues, I think you’re looking at a significant impact on Disneyland, Universal Studios, and other theme parks,” Maharaj said.
“The environment of the live show and the restaurant companies will probably also be influenced.”
Spokespersons for the Disney and Universal theme parks did not respond immediately when DailyMail.com contacted.
The Chinatowns of New York – in Manhattan, Queens and Brooklyn – have seen a fall of 50 to 70 percent in the last two weeks, all partly due to the decline in tourism, reports Eater.
Restaurant owners such as the historic Nom Wah Tea Parlor in Manhattan describe their environment as a “ghost town” and told Grub Street that the company had reached a five-year delay last Monday.
Chinatown in New York is hit hard by the virus where many tourists assume it is not safe to eat there even though there is no known infection
Steve Ip, owner of Yin Ji Chang Fen, tells the Times that he had expected multitudes of international students during the lunar New York-based family: they didn’t come true, and business at Yin Ji Chang Fen is less than half.
Restaurants in Boston’s Chinatown are also suffering, Eater reports.
Companies such as New Golden Gate Seafood Restaurant are normally busy at this time of year, but have been virtually empty, reports WBUR, the Boston radio station.
Business executives in Chinatown in Houston see the same situation.
The owner of the Shabu house in Houston, Debbie Chen, tells the news from KTVC2 from Houston that she is worried that she can pay her staff.
COLLEGES LOSING FOREIGN STUDENTS
Education has also been influenced by the decline in the number of tourists from China.
Sean Jasso, professor of economics at Pepperdine University, told the Los Angeles Business Journal that many short-term intensive programs at local universities for Chinese students have begun deferment and cancellations.
“The proceeds will clearly be lost,” he added.
A full 42 percent of international students in California are from China, according to a 2019 study by the Institute of International Education and the State Department.
According to the report, they contributed billions to the California economy last year.
Pepperdine’s Jasso said that future travel restrictions by the US government could affect Chinese enrollment for the 2020-2021 school year in Los Angeles County – although this depends on continued virus spread.
“If a quarter of your students come from China, like in my program, that can be a big problem,” Jasso said.
College professors say their student bodies will change drastically when Chinese students make up a quarter of the intake in some cases. Pictured, Harvard.