The deadly coronavirus continues to spread rapidly worldwide, with more than 80,000 confirmed cases and more than 3,500 deaths. Our previous report on the impact of coronavirus on hospitality states that the factory is delaying closures to 14 days after the initial planned shutdown for the Lunar New Year. Although some factories have resumed low-volume production, many others will continue to postpone reopening for the foreseeable future.
Safety precautions delay shipments and production
One of the reasons that production cannot grow faster is the lack of factory workers. The government's travel ban prohibits many employees from returning to work. In other cases, factory workers voluntarily take time off to reduce their exposure to coronavirus. The shortage of manufacturing workers is so severe that some companies provide economic incentives for returning workers, hoping that some of them are willing to ignore the potential health impact in exchange for bonuses.
Even finished products can be delayed. Cargo shipped from China will be quarantined for two weeks to indicate that someone on board may be experiencing symptoms, further disrupting the shipment and reception of the product.
Temporary solution
Now, the hotel industry is more dependent on domestic manufacturers for FF & E than ever before. However, this remedy does have a time limit. US-made goods often have parts outsourced from countries such as China. Once domestic suppliers are in short supply, they will also suffer setbacks due to long-term factory closures.
Lack of knowledge is one of the biggest challenges facing the virus outbreak in the hospitality industry. The Chinese government's news reports and statements only release so much information that it is difficult to assess when Chinese manufacturing will return to previous productivity. What we do know is that the already significant impact of coronavirus on hotel FF & E supply chains will continue to grow.
