Posted On: Wednesday - December 30th 2020 8:28PM MST
In Topics:   Economics  Kung Flu Stupidity
(Continued from Part 1, Part 2, and Part 3.)
The last 3 posts on the service economy really didn't go along with the title, as I had initial intended to write just one post (yeah, that happens a lot here). The title is good for this conclusion though.
We all have seen small service businesses close down around us. That is, the restaurants and bars in which those aforementioned folks were selling each other, and me too, occasionally those craft beers and gourmet burgers. It's hard to tell which ones will ever re-open. I can tell you that 3 favorites, one only a mile away from us, and 2 of the most favorites in our relatives' hometown are close for good. I'm just thinking of myself here (and a family member who I knew would be just devastated about 1 of them, his favorite), I guess, but this really pisses me off now. I'm sure the readers here have their own hangouts in mind that are gone for good.
Restaurants and bars aside, hotels and motels are another big area of the economy for which the elites can't outsource the whole deal. Yes, they can import the cheap labor of course, oh, and the owners - looking at you, Mr. Patel, and you Mr. Patel, and ... x 10,000. I've been traveling just as much as before this whole Kung Flu PanicFest, and I talk to the managers of hotels in the lobbies about all this.
It's not good at all. My eyes tell me that these places, whether downtown hotels or airport types, are still pretty empty, but managers tell me numbers like 10% to 40% with only a few special nights when they get up to over 50%. In the past, many were sold out most weekends or special days. I'd hear from the people at the desk that around 30-35% occupancy rates are needed to break even, but for "full service" hotels, those with restaurants inside, the number is closer to 50%.
I am not in the hotel business, mind you, so these numbers are not comprehensive. However, on the Statista website here I found the graph shown below. In this Trip Savvy article, the breakeven number is given as 37.5%, close to what I've been told.
Here's the big number I've heard, but it's one that I haven't been able to find good numbers on on the web yet: I've been told by a few people in the business that 60-something percent of hotels in the country may close for good!
Is there something about the service industry that makes it more prone to a government/media panic-induced collapse? In this case, of course, the fact that the big hysteria is about a contagious disease makes it obvious why the service industry has been beaten down. Even with some other big bad event (or supposed one) though, the service industry, specifically hospitality (food/beverages/lodging) is bound to take the biggest hit, as it provides services that we don't absolutely need. I suppose accounting, vehicle repair work, and those services that go along with production are left alone, as the production of goods is more important.
Then, there are the F.I.R.E. "industries". They are not particularly necessary, but yet, they have been left alone, or at least still making money (I read that "E" as standing for Education.) You know, I meant to mention this, so I'll stick it in yet another post.
This Service Economy that was supposed to well serve Americans after we shipped off all that manufacturing might has collapsed due to this Kung Flu Infotainment Panic-Fest. It's pretty much all we had left, so now, as the bored kids say, "what do we do??"