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COVID-19 Impact: When will Jobs Return to the Hospitality and Transportation Industries?
By Neil Hassanwalia
August 5, 2020
BUSINESS
when will the hospitality and travel industry begin to hire

Airlines, hotels, cruise lines and associated businesses have been greatly impacted by COVID-19.  Hiring has stopped, early retirements have been offered and people who were not able to be protected under the government stimulus packages have been let go. 

With so much unknown surrounding the pandemic, it leads many to wonder when these businesses will start to hire again start and generate similar past revenues.

The answers to these questions rely on many factors such as the overall economy and how much business travel comes back post COVID-19. However, the biggest factor is the comfort level of consumers traveling and their confidence that they will not catch COVID-19 by using any of these services.

While there is not a one-size-fits-all solution to get the world traveling again, there are several factors that will influence the return of jobs to the hospitality and transportation industries.

1. Vaccines

Currently there are three vaccines in phase 3 of human trials. Based on recent data, if successful, it is fair to assume a vaccine will be approved in Q4, and available to the market by Q1 of 2021.

2. Therapeutics

Remdesivir has been approved for treatment of COVID-19, which is already being widely used.  Confidence is increasing as hospitals report the effectiveness of the treatments.

3. Protection Techniques

Face masks heavily reduce the chances of spreading COVID-19 and have been mandated by most businesses and airlines. However, wearing face masks on long flights or any transportation for lengthy periods of time can be very uncomfortable, making travel undesirable. 

Newer face masks designed for exercise have come out in the market, which allow for better breathing.  As of current, there are no convenient face masks that cover ease of eating, drinking, and breathing for longer-wear situations.

4. Reduction in COVID-19

Local, State and Federal governments have all given guidelines to help reduce COVID-19. In addition, businesses are also implementing their own restrictions to increase consumer confidence and reduce the spreading of COVID-19. 

The biggest fear of contracting COVID-19 is dying.  If COVID-19 were not deadly, we would be in a different situation today. But to reduce fear, it is important to understand accurate numbers of those infected by COVID-19 and what the death rate is. 

According to the CDC, as of August 4, 2020 there are 4,748,806 cases of COVID-19 reported in the United States and 156,311 deaths reported due to COVID-19. 

Unfortunately, the actual age demographic data is not published daily. The data shared is until July 25, where the total deaths from COVID-19 by age demographic provided was 135,574.  

total deaths from COVID-19 by age demographic

Based on the above data, COVID-19 only makes up less than 9% of total deaths in the younger demographic. However, amongst those 65 or older, the death rate reaches almost 80%.

As the news continues to report on the surges of COVID-19, it begs the question of how it will impact the risk of deaths.

In order to understand that, we must look at the deaths by months by age demographic to see if this is what is meant by surging, followed by a look at total COVID-19 cases by age next to the deaths by age to better understand what is meant by “surging.”

total COVID cases by age demographics
total COVID cases by age demographics

Note: Data was pulled from multiple CDC sources, as the data was not grouped by the exact same age ranges for ages 5-64.  The data might have minor distribution discrepancies between these brackets. The total cases provided by Age demographic on July 25th was 3,489,817. Cases by age were calculated by using data from the CDC site.

By examining the data from the above charts, we can clearly see that the deaths by month have come down in all categories, so it would not be correct to say we are surging.  By examining the above data from the second chart, the death rate of COVID-19 is equivalent to that of the flu (0.1%) when looking at ages 34 and below and a fraction of a percent up to the age of 44. 

The death rates are high, when looking at ages 45 and up, but significantly higher in ages above 75 (21%+).  Therefore, if we hear “COVID-19 cases are surging” with 12k new cases in a particular state, it would be challenging to understand the death risks without including the context of the age demographics.

When we say a reduction in COVID-19 will increase consumer confidence, it is not a reduction amongst those who are 15-24-years old that is relevant. Rather, it is a reduction in the cases from 65+ that have the highest death rates.  Based on the above data the 65+ age group makes up  16.4% of overall cases nationally, as this percentage goes down the death rate will decrease, and ultimately increase consumer confidence.

Recent media outlets have reported COVID-19 surging in Florida, but if we look at the chart below (data as of 8/3/2020), the 65+ over population only makes up 14.25% of the cases, which is lower than the national percentage of the same age group from the above data. 

Currently Florida has the second most COVID-19 cases nationally amongst all states, yet the cases amongst 65+ are 3% below the national average.  This is probably the most significant factor when trying to explain the mortality rate of the nation being at 4% versus Florida at 1.5%. (Mortality rate of 4% calculated  in above chart for US and 1.5% by using death total of 7,400 in Florida with total cases in Florida being 496,415 from below chart)

total COVID cases by age demographics

Summary

Consumer confidence will be restored in the transportation and hospitality services industries once the risks of death from COVID-19 are reduced or non-existent.  The risk of death sits primarily with ages 65+, where we need to find ways to overly protect this age group population through vaccines, therapeutics and protection techniques. 

If we wait for a vaccine to solve the problem, assuming no issues, we are tracking Q1 2021 until confidence will be restored and these businesses will start to lift off.

Over the next month we can gauge how much Remdesivir or other therapeutics are working by looking at the death rate for ages 65+, right now it is too early to tell.  If we see the death rate going down, then we are in fact treating the disease amongst the high-risk population better and should restore consumer confidence.

Lastly, something that can be monitored every week is the protection amongst the age group 65+. Although the data is three weeks prior, if we begin to see an overall decline from the 16.4% of COVID-19 amongst this age demographic, we will ultimately see a reduction in the death rate.

We will be keeping a close eye on these factors each week and will be ready for when consumer confidence returns, and these industries start to hire again – specifically in technology.   

SkillStorm’s hire – train – certify – deploy model is well positioned to skill up technology talent in the highest in-demand technologies at scale.

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