Business Guide: Here is the Top 10 Most Vulnerable and Affected Businesses in Singapore this 2020
Launching a business is risky, and overlooking warning signs would lead to the management’s demise. That is why it is important to acknowledge and mitigate perils to minimize failure and setbacks. However, some happenings are beyond our control. There are anomalies that hit some sectors harder than usual, and it has become a struggle for these industries to bring in enough revenue.
The COVID-19 outbreak disrupted economic activities in the country, resulting in collapses of different sectors that heavily rely on the restricted measures. The imposed health protocols to ensure the safety of people have caused businesses to put their operations on hold. People readjusted their needs. And there has been a continuing decline in availing for specific services.
1. Travel Industry
The prime minister announced the circuit breaker measures, a nationwide partial lockdown to prevent the spread of COVID-19. The government closed the border and mandated the residents to stay at home. The travel industry continues to restrict operations and is unlikely to recover from the loss quickly.
According to the report of the Singapore Tourism Board (STB), a statutory department under the Ministry of Trade and Industry, visitor entries fell sharply at 85.7 percent. In comparison, tourist receipts declined by 78.4 percent in the first three quarters of 2020. Such a decline has caused major financial difficulties, and there is no clear or very low mobility in terms of other tourism activities.
Commercial hops and airlines struggled from flight cancellations and the decline of travel admissions, making it one of the sectors with the most casualties. The massive reduction of passengers has made airports empty, and there were 49 cities with reduced direct flights. There were fixed operating costs even when little to no flights were being admitted.
Since the travel habits of people have changed, airlines had to cope up with cost-efficient services. Fewer persons are booking premium flights since most organizations change to video conferencing to discuss business matters.
3. Aviation Industry (Manufacturing & Operations)
The decline of tours and domestic flights has led to the low production of aircraft-related services. There was a huge drop in demand for parts and repairs, leaving aircraft manufacturing companies with low revenue and fewer clients. The industry had to implement retrenchment to cut expenses.
The long-term effects and new perspectives on traveling for leisure would hinder aviation companies from recovering the loss. Aviation-related companies would have to develop new operational management to mitigate emerging risks and become resilient. Doubled efforts to thrive in the market.
4. Hotel Industry
Hotels and accommodation services either had to close temporarily or operate a section of their range. There were no foreign guests since the imposition of travel bans. Canceled bookings on local and international levels have led to revenue loss and an increase in the unemployment rate. It has resulted in a significant amount of mortgage debts, attempting to pay off the operating costs.
With the gradual lifting of operations, the industry has to adjust operating services to serve the new consumer demand—ensuring that the environment is safe while following the health protocols.
5. MICE Industry
The COVID-19 pandemic has made the Meetings, Incentives, Conferences, and Exhibitions (MICE) industry quickly devalue its services. Both the attendees and presenters reconsidered new ways to reach global and international audiences without sacrificing their health in physical gatherings. It has resulted in salary reductions and contract freezing to lessen costs.
Safe management measures on MICE events in the country are implemented. Meaning, organizations ought to maintain the highest standards of healthcare protocols. The interaction between the attendees is restricted, having them prefer utilizing digital platforms.
6. Arts, Entertainment & Recreation
The global crisis affected not only economic pursuits but also disrupted daily human activities. Stay-at-home orders have prevented most people from going out and engaging in social gatherings. Venue-based businesses become empty, with almost no individuals doing outdoor activities. Lifestyles and approaches to well-being have changed.
Among the affected venues are amusement parks, theaters, museums, bars, restaurants, and other outdoor places where locals could stay and interact. Festivals and music concerts are no exception to the consequences of the pandemic.
7. Offline Retail
Fears in visiting public places and stay-at-home orders have caused changes in the stability of the market. Consumers adjusted to the new normal and found new methods on how to purchase necessities. People are shifting to digital platforms where no physical interaction is required, making offline retail depreciate its essence.
Even mall-based retailers are not spared. The country’s retail sales in April 2020 suffered from the worst decline during the circuit period. According to the data published by the Department of Statistics on June 5, the fall went down by 40.5 percent. Economic difficulties have lowered the consumer shopping drive.
8. Banking and Finance Industry
As banking and finance continue to grapple with the workforce challenges brought by the virus, low-interest rates also reduced the profitability of investing. The consequences of pandemic increased credit risks of both corporate and retail clients, exposing them to fraudulence from pressures or demand for stimulus checks.
Adding the fact that the sector is associated with businesses and companies affected, a significant amount of funding would be needed. Singapore bankings are obliged to maintain their service amid the pandemic, but the management had to cut costs and freeze hirings.
9. Construction Industry
The circuit breaker period disrupted the scheduling of subcontractors and manufacturing activities to reduce COVID-19 infection. There are minimal projects ongoing since most designs are on hold and existing schemes have been deferred. Both internal and external production are suspended and are not in the best condition to resume operations.
Devastating consequences of the spread include a massive job loss and time overrun. Construction cycles are heavily impacted, and labor standards have developed their basis. Costs are fixed despite having no construction works being carried out.
10. Traditional F&B
The food and beverage industry is also struggling with the changes in the food supply chain. During the circuit breaker period, there are no dine-ins while takeaways are regulated. Food chains were only required to serve a few tables.
There are changes and adjustments in every phase of the process to reduce the potential spread of COVID-19. Restaurants and food chains have to comply with the restricted trade policies—from production, distribution to service. The slow easing of restrictions has made the industry grapple with less revenue.
Quarantine measures in 2020 and health protocols were imposed to curb the COVID-19 pandemic. However, the restrictions had made vulnerable businesses struggle with the new norms. The circuit-breaker period readjusted the consumer demand, discouraging people from performing physical activities where specific sectors earn a profit.
If your business is one of the above, there is no doubt that you undergo changes and unfortunate circumstances. But this doesn’t mean you would have to shut down or have your company strike off. Consider shifting to modern tools and advanced technology to stay relevant. Digital platforms and virtual conferences would allow you to meet the demands of clients as well staying connected with them.