August 9, 2021 Coronavirus en_US The travel, recreation, and education industries faced challenges from COVID-19 restrictions, but are slowly looking up. https://quickbooks.intuit.com/cas/dam/IMAGE/A7HtFPlVG/path-to-recovery-heaer-photo-us.jpg https://quickbooks.intuit.com/r/coronavirus/worst-hit-industries-overcoming-covid19/ The path to recovery: How the worst-hit industries are overcoming COVID-19
Coronavirus

The path to recovery: How the worst-hit industries are overcoming COVID-19

By Myranda Mondry August 9, 2021
COVID-19 grounds the travel industry

The first few weeks of quarantine felt like the beginning of an apocalyptic movie: No planes in the sky, no cruise ships on the horizon…no toilet paper on the shelves. Thousands of businesses across the country struggled to adapt and remain open, but with stay-at-home orders in place, the travel industry came to an abrupt standstill.

Within a matter of days airports emptied, hotels became vacant, and Disneyland closed its gates for only the third time in history. By April of 2020, just one month into quarantine, hotels and motels had already lost nearly 50% of their monthly revenue, according to a recent QuickBooks study. Museums and other tourist attractions along with them. And travel agents immediately felt the pain.

Travel industry down 10 percent

“On March 13, 2020, I knew my business was going to be heavily affected by COVID,” said Keymia Sharpe, Creator of Key2MIA, a Miami-based tourism company. “A global lockdown meant no one was going anywhere… and my business needs travelers to thrive. I wondered how I was going to keep a roof over my head and feed my kid. My business was my primary source of income. What was I going to do?”

One year later, businesses in the travel and tourism industry have yet to fully recover. Hotels, museums, and attractions are still down more than 10% year over year — but things are starting to look up. As COVID-19 restrictions begin to lift, people are turning to travel and tourism for a long-awaited escape. But their travel plans don’t look the same as they did before.

Staycations abound post-pandemic

“The way people travel is changing,” said Jenn Zajac, a hotel marketing specialist. “TripAdvisor’s late 2020 consumer survey showed that different types of trips, namely last-minute “staycations” and short-notice, quick getaways are in demand. Travelers want to stay within driving distance of home, and they want to be able to book less than 30 days out… or even within the same week.”

The survey found that the majority of today’s travelers are looking for wide-open spaces—destinations they can enjoy without COVID testing or quarantining. Ski resorts, seaside retreats, and other rural spots are among the fastest recovering businesses. In the US, destinations like Key West and Sedona are recovering faster than crowded cities like New York or Las Vegas.

“Two-thirds of survey respondents said that avoiding crowded places when traveling was more important to them now than it was pre-pandemic,” said Zajac. “More than half said they are more likely to choose an outdoor or nature-focused destination than they were pre-pandemic.” She advises hotels and motels to create attractive “staycation” offers to capitalize on this demand.

Travel industry promoting staycations

Of course, some travelers are taking the concept of a “staycation” even further—by staying put.

Virtual experiences reign supreme

In 2020, the businesses that thrived are those that were able to think outside the box. Gyms kept their virtual doors open by offering online workout classes and training. Restaurants turned to pickup and delivery services to keep their kitchens up and running. And retailers focused on e-commerce to keep their products flying off the shelves.

These businesses found success in the world of virtual experiences, and the travel industry is no exception.

“The first few weeks of quarantine looked like the end of Key2MIA,” said Sharpe. “But the more time I had to adapt to everyone being at home, finding ways to be together while being apart, I realized I could bring Miami to the masses.”

Sharpe came up with a few virtual ideas that would allow people to experience Miami from the comfort of their homes. The most successful of which is the “Taste of Miami” experience: a virtual cooking class hosted by local Miami chefs teaching signature Miami dishes. “We do kids parties, corporate team building events, girls’ nights, and date nights,” said Sharpe. But she didn’t stop there. “Key2MIA also birthed a trap yoga class, a “mommy and me” virtual spa party, and converted a popular Miami walking tour into a virtual tour,” she said. “My mindset was to adapt or perish. Adaptation would be the key to my success.”

And she’s not alone. Tourism businesses, large and small, adapted to give people everywhere the opportunity to travel virtually. Google Arts & Culture teamed up with thousands of museums and galleries around the world to create virtual exhibits. The Smithsonian National Museum of Natural History created virtual tours that allow visitors to take self-guided, room-by-room tours of current and past exhibits. And independent tour guides took to social media to take followers on live walking tours to satisfy their wanderlust.

Travel industry: Virtual tours

In many ways, these virtual experiences give “travelers” the opportunity to see and experience places and things they might never have the chance to see in person. Even as the world begins to reopen, these virtual options are here to stay.

“Post pandemic, I believe many of the virtual aspects that many tourism businesses put into place will somehow be integrated into physical tours and experiences,” said Sharpe. “Enhancing it that much more.”

In fact, despite loosened travel restrictions, Sharpe is reducing her physical tours and focusing instead on enhancing her most popular tours with virtual experiences. “Regardless of where my customers are, Key2MIA can still bring a little piece of Miami to them,” she said.

The future of travel and tourism

Beyond virtual experiences, and more than a year after the initial shutdown, the travel industry is once again picking up. But travel experts believe that pandemic-inspired travel restrictions aren’t going anywhere—especially for those hoping to travel internationally.

“Travelers should expect to comply with more stringent mitigation measures abroad than are currently mandated in the U.S.,” said Warren Jaferian, Dean, Office of International Education at Endicott College. “Many countries, unfortunately, do not have the same access to and distribution of approved vaccines. Therefore, when traveling abroad, be patient, understanding, and grateful for the privilege of being fully vaccinated, with the ability to travel.”

Immanuel Debeer, the founder of Flight Hacks, agrees. “While tourism is slowly getting back on its feet, we have to be mindful of the new normal post-pandemic,” he said. “Some destinations will reopen, but they will be very strict with health protocols to include masks, social distancing, and frequent hand washing.”

With more than 200k miles under his belt, Immanuel has seen a lot of things. “The last time I traveled, I was so amused to see a vending machine selling face masks and sanitizer instead of the usual food items,” he said. “But this is a new reality.”

This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.

We provide third-party links as a convenience and for informational purposes only. Intuit does not endorse or approve these products and services, or the opinions of these corporations or organizations or individuals. Intuit accepts no responsibility for the accuracy, legality, or content on these sites.

Recreation suffers from social distancing

Theaters, festivals, amusement parks — these are the businesses that thrive on bringing people together. So what happens to these businesses when people are forced at least six feet apart?

According to recent QuickBooks research, the recreation industry is down 20% year over year, or $43K per organization, on average. Bowling alleys are the hardest hit by COVID-19 of all businesses in the recreation industry, with annual revenues down by an average of $251k per business. As it turns out, none of us really felt comfortable wearing shared shoes or using community bowling balls last year.

Recreation industry: Bowling alleys hardest hit by pandemic

But bowling alleys aren’t the only entertainment businesses to suffer. Theme parks shut down, concerts were rescheduled (and re-rescheduled), and theaters across the country closed their doors. Movie attendance, which had remained steady at over 1 billion per year for several decades, dropped to 240 million—an all-time low. Today, movie theaters are still down more than 50% year over year or $144k per business.

Like thousands of others struggling to keep afloat while their doors were closed, these recreation industry businesses had to find new ways to reach customers. For some, that meant either going digital or getting outside. For others, adapting to an era of social distancing proved much harder.

Digital experiences reign supreme

For many entertainment and recreation businesses, surviving 2020 meant offering digital options that would allow consumers to enjoy playing games, watching movies, and attending concerts from home. New movie releases skipped theaters entirely—allowing moviegoers to enjoy box office hits without the box office. Concerts and events streamed live from empty venues direct to our TVs, and consumers spent a record amount on video games. All in all, digital entertainment revenue in the US grew more than 33% year over year.

But what about the small businesses that don’t have such an obvious digital extension? Businesses like bowling alleys, gyms, independent cinemas, or escape rooms that rely on in-person participation?

“COVID brought our business to a halt,” said Les Pardew, Founder of Mystery Escape Room. “We started as an in-person escape room where four to twelve people—sometimes total strangers —are enclosed in the same room. When the pandemic hit, the government ordered us to close all our live locations.”

Pardew knew that his business would have to pivot, and fast. Fortunately, he was already working on a virtual experience that could bring teams together, even if they weren’t physically located in the same place.

“I used my background in developing video games to develop new ways for people to virtually enjoy all of the aspects of an escape room,” he said. “I was just beginning to feel good about our virtual rooms when the pandemic hit and the online escape room adventure was the only product we could still sell. It saved our company.”

Mystery Escape Room has since developed a handful of online escape rooms for adults and children alike. And their business is thriving because of it.

“I think that the real magic of the online adventure is that it’s won us an international market,” said Pardew. Digital Mystery Escape Room events are now hosted in more than 40 countries around the world—a far cry from their first physical location in Utah. “Some of the biggest companies on the planet are coming to us and using our escape rooms for team building events,” he said. “We are attracting customers who would have never been able to experience an escape room.”

For some, the pandemic serves as a lesson in future-proofing

Pardew was fortunate to have time and experience on his side. He was already working on a virtual experience when the pandemic hit, and thanks to his background in video game development he had the skills he needed to do it himself. But other small recreation businesses weren’t so lucky.

Recreation industry: Virtual experiences

Bowling alleys, independent theaters, and gyms struggled to think of ways to digitize their experiences. But virtual meet-ups and on-demand classes could only get them so far. Additionally, many of these companies had just a few weeks to pivot their business plans or create new experiences before they ran out of cash. A recent study by JP Morgan found that small businesses have an average of 27 cash buffer days in reserve. But a quarter of small businesses have less than 13 days worth of cash on hand. The sad reality is that many businesses simply couldn’t pivot fast enough.

With more time and more money, perhaps more businesses could have thrived. The pandemic, while impossible to foresee, served as a harsh reminder to small business owners to create a cash reserve (three to six months is the recommended amount), to have a contingency plan in place for unforeseen events, and to start now, before it’s too late.

Movies and more find success in the outdoors

Mystery Escape Room is just one example of a small business making big changes to adapt to a digital world. Bartenders took to social media to teach on-demand bartending classes. Personal trainers continued training their clients on YouTube and Zoom. And musicians relied on live streams to bring in an audience.

Of course, some things simply can’t be projected on a screen. Even the best virtual reality headset can’t replicate the feeling of flying down a snowy mountain with a snowboard strapped to your feet, or the sun on your skin as you lounge beachside. Fortunately, these types of activities are socially distanced by their very nature—literally. As such, outdoor recreation—things like skiing, golfing, and camping—flourished in 2020.

“Recreation was highly impacted by the pandemic,” said Julie Singh, co-founder of TripOutside. “But it was overall a very positive impact. As sporting events, festivals, concerts, and even bars shut down, people turned to the outdoors for entertainment, fresh air, and a boost to their mental health.”

Singh’s business saw a big spike in demand for biking, paddle sports, ski tours, rentals, and lessons throughout 2020. “All activities that provide people with a way to get active and enjoy the outdoors while staying socially distant,” she said.

Recreation industry: Success in outdoor activities

Beyond that, unconventional outdoor venues (like drive-in movie theaters) saw a spike in popularity for the first time in decades. To accommodate the surge, many drive-ins expanded their viewings to include concerts, stand-up comedy, and more.

Looking ahead, it’s unclear if consumers will continue to turn to the great outdoors for entertainment and recreation when things like Netflix and Nintendo are just a button push away. But Singh says, for now, outdoor activity providers will continue to see strong demand for their offerings.

Embracing the new normal

In many ways, digital experiences can’t replace the real deal, but experts believe virtual reality is here to stay, even when social distancing is a thing of the past. At least, to some extent. Why go to the gym when the gym can come to you? Why go to a theater when you can stream box office hits from home? (That one is easy: for the popcorn).

Consumers have adapted to and come to appreciate the convenience of online shopping, food delivery, and grocery pickup. The use of online entertainment platforms like video streaming services and video games has skyrocketed, and consumers are hesitant to resume “regular” activities in shared spaces like gyms and restaurants once restrictions have been lifted.

Moving forward, creating an omnichannel business model, one that operates in person and online (to some extent), may be essential to success. Rather than keeping us apart, these digital recreation activities have the power to bring people closer than before.

Creating digital experiences has allowed Pardew and his business to bring more people together than he ever thought possible. “We’ve been able to help people fight isolation,” he said. “We can bring together families, companies, or coworkers, and connect them wherever they are.”

Looking to the future, Pardew says they’ll continue to develop both online and on-site experiences, monitoring health guidelines and adjusting accordingly. But it’s safe to say his online adventures aren’t going anywhere. “The pandemic has been hard,” he said. “But the silver lining is that it forced us to find new ways to serve more people.”

This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.

We provide third-party links as a convenience and for informational purposes only. Intuit does not endorse or approve these products and services, or the opinions of these corporations or organizations or individuals. Intuit accepts no responsibility for the accuracy, legality, or content on these sites.

Education businesses lose more than revenue

How essential is in-person learning? This has been the subject of much debate since the onset of COVID-19. Can students really learn over Zoom? And can teachers really teach when their classrooms sit empty?

For educators and small business owners in the education industry, the debate goes far beyond the effectiveness of virtual learning. It’s a matter of survival.

In 2020, stay-at-home orders forced thousands of small businesses to shut their doors. And while essential industries like utilities and agriculture continued to perform well, students across the U.S. were locked out of their classrooms — their teachers forced to adapt as best they could.

Education industry down 11 percent from pandemic

According to a 2021 QuickBooks study, education-based businesses like tutoring companies, specialty schools, and foreign language learning were among the hardest hit by the pandemic. Revenue across the education industry is down 11% year over year or $24k per organization. Elementary schools and secondary schools suffered the brunt of it. These establishments are down 16% year over year or $38k per organization.

And while some industries have already embarked on the road to recovery, educational services are slow to return. In New York, for example, the education industry continues to experience notable job loss well into 2021.

These revenue and job losses are impactful, but these businesses lost more than just money.

The challenges of virtual education

On March 11, 2020, Cynthia Hinkleman, a music instructor from Palm Beach, Florida, heard a news story about the coronavirus reaching American shores.

“I made the decision that night to cancel everything,” she said. Hinkleman has an autoimmune disease that puts her at higher risk of contracting the coronavirus, and her husband just turned 80. They weren’t taking any chances. “Basically, for the entire year and a half, we didn’t leave our house,” she said.

But Hinkleman’s business, Lighthouse Suzuki Strings, relies on in-person, hands-on music lessons. She has students ages 4 to 82. “With the Suzuki method, we create an environment,” she said. “The students watch other students play, they hear the music. Their brain learns the music first which makes it easier for them to physically learn it.”

Without the in-person instruction, her client base suffered. “27 students stopped lessons because of COVID…because we were going to online lessons,” she said. “We had some adults that stopped, but quite a few children. Young children weren’t able to continue because they really need hands-on, physical learning.”

Education industry: challenges of virtual education

Unfortunately, Hinkleman’s story isn’t unusual. Jim Waldman, owner of Tutor A+ Team, a one-on-one tutoring company out of Virginia, echoes her sentiments.

Waldman works with more than 60 tutors to cover all topics and all ages. Typically the tutors meet with the clients in person, either in their homes or at the library. Waldman himself meets with every new client in person before they sign on with a tutor. He firmly believes that in-person tutoring is best. “Everything is face to face,” he said. “Everything is one-on-one.That’s the most effective type of tutoring. There’s nothing better than having a tutor sitting at the table.”

But when COVID hit, things changed.

“We did not do as much business as we would have done if the pandemic didn’t happen,” he explained. Along with the decrease in new clients, Waldman’s business lost some existing clients due to financial difficulties or struggles with online learning.

Like Hinkleman, Waldman found that virtual learning simply didn’t work for his youngest clientele. “We can keep their attention for about 45 seconds,” he said. “After that, the computer becomes a toy, not a learning instrument.” Waldman’s company did what they could to meet with these clients safely, but families who depended on virtual learning slowly dropped out.

But for Waldman, losing a few clients isn’t his biggest concern. He’s more worried about the long-term repercussions the education industry might face in the aftermath of 2020.

Lasting impacts on the widening achievement gap

“My biggest concern is what’s going to happen in September,” said Waldman. He’s worried that students, especially elementary-aged students, are going to struggle—and their teachers along with them. “Their teachers are going to expect them to know what they were supposed to have learned the previous year. When they don’t, the teacher has two options: Spend time trying to get these kids up to date on their education, or forge ahead with their lesson plans. Sometimes there’s just not enough time. So this is going to be a major problem for a while.”

And education experts agree: the shutdowns caused by COVID-19 could widen the already troubling achievement gap. While all students are at risk of significant learning loss due to the pandemic, the loss will be greatest among low-income students who are less likely to have access to high-quality remote learning, high-speed internet, or even a quiet space to learn.

Looking forward, low-income students may fall behind by more than a year — exacerbating the existing achievement gap by up to 20%.

“The impacts of the COVID pandemic on learning, including remote education, have been among the most significant factors contributing to a widening achievement gap that I have seen in my 30 years as a scholar and educator,” said Dr. Deb Geller, Associate Dean of Students at UCLA.

Kathryn Starke, the founder of Creative Minds Publications, an educational literacy consulting company, agrees. “Our youngest students in elementary school have experienced the greatest gaps in the foundations of reading, writing, and literacy. Remote learning is a challenge for children learning to read who require hands-on manipulatives, books in hand, and one-on-one differentiated support,” she said.

According to Geller, even college-aged students were met with significant hurdles as they transitioned to online learning. “As campuses closed, many students had to return to their family homes, where they might not have a private space to study or attend virtual classes,” she said. “Some lacked the technology and reliable internet access required for their classes. Beyond that, faculty had to learn to teach remotely, and not all responded well to that challenge.”

Starke sums it up best, “We have lots of work to do for all students when schools resume in person.”

But for educators everywhere, “in-person” will look a little different than it did before.

Hybrid education models emerge

After more than a year of quarantine, Hinkleman is starting to meet with students face-to-face—at least as close as it gets in a post-pandemic world. “I was cautious about going back to being with students,” she said. “We meet in a large room, there’s a plastic screen, we wear masks and the classes are lighter.”

While Hinkleman navigates the tricky return to in-person learning, some educators believe the pandemic has taught some hard-earned lessons about the future of education.

Dr. Brent Goldman, CEO and co-founder of Xceed Preparatory Academy, a hybrid school, believes that traditional schools can learn some valuable lessons about virtual learning and the benefits of hybrid teaching—pandemic or not.

“There’s definitely a need for long-term hybrid and virtual approaches in education,” he said. He believes that traditional school models that cater to larger and larger student populations with diverse needs don’t work for today’s students.

Throughout the pandemic, as his students made the switch to hybrid or fully virtual learning, Goldman discovered more benefits than disadvantages. “[The students] liked being able to focus on their schoolwork at their own pace or without the social drama they had at their former school. There is not a one-size-fits-all education model, and parents and students are now aware of the choices out there.”

Education industry: Hybrid education models emerge

In fact, some experts believe that adopting a hybrid learning approach and improving remote learning opportunities will not only shorten the length of disruption for students (decreasing the loss in learning due to COVID-19 from 10 months to six months) but also have a meaningful impact on existing achievement gaps going forward.

For Goldman, 2021 is an opportunity to make long-awaited changes to the industry. “The traditional model of education is antiquated and we need to re-examine the methods in which students are being taught and how they actually learn.”

After all, traditional education structures were established in the 18th century, and they haven’t changed much since. For example, the traditional summer break was adopted to give children a reprieve from sweltering classrooms void of air conditioning. However, for today’s students who struggle with learning, either virtually or in-person, a long summer break can be devastating to their progress.

Knowing this, some schools have experimented with shifting school calendars. Others are considering scrapping grade levels and focusing on proficiency-based learning. As educators everywhere figure out how to catch up on lost time from the COVID-19 pandemic, the possibilities are endless. And education experts agree: “Perhaps the COVID-19 crisis can be a catalyst for innovation.”

This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.

We provide third-party links as a convenience and for informational purposes only. Intuit does not endorse or approve these products and services, or the opinions of these corporations or organizations or individuals. Intuit accepts no responsibility for the accuracy, legality, or content on these sites.

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Myranda Mondry

Senior Content Creator

Myranda Mondry is a senior content creator for the QuickBooks Resource Center. Her work has been published in Forbes, The Huffington Post, and other top-tier publications. Myranda currently resides in Boise, Idaho, where she runs an Etsy shop selling handmade heirloom quilts. She’s passionate about her dogs, '80s rock music, and helping small businesses succeed. Read more