Scenario: Will this affect the supply or the demand for new goods and/or services in your industry?

A key skill in economics is the ability to use the theory of supply and demand to analyze specific markets. In this week’s discussion, you get a chance to demonstrate your ability to analyze the effects of the Coronavirus on an industry of your interest (pathway or career interest). State whether the reality is as you expected.Proofread the content of your posts before making them public. Proper grammar and sentence structure are expected.

ANSWER

Effects of Coronavirus on Supply and Demand

The spread of the deadly coronavirus that the world has experienced over the last year sent shock waves that affected every economic sector. Businesses closed down and only those fortunate enough continued, but internet platforms. Sectors that major relied on personal interactions were closed down to tone down the rapid spread of the virus. With the pandemic, people got a closer look at the aspect of supply and demand. In my opinion, the most hit sector was the Tourism sector. This sector was shut down, with countries that rely on foreign tourists on the losing end. With travel bans in place, the industry received significant financial losses than ever experienced before. The supply of tourism services remained intact, but the demand deteriorated (Baum & Hai, 2020). Tourists were not allowed to gather or even travel to different countries and enjoy their vacations. This meant that countries that benefited experienced a reduction in their GDP. For instance, with airlines grounded and hotels crossed, the United Nations World Tourism Organization (UNWTO) declared a loss of $80 billion in receipts. The sector also experienced a 78% decline in international tourist arrivals by the end of 2020.

In my opinion, this is something I expected the industry to experience. The concept of supply and demand dominates this sector, and it was likely that things would go south in case of an emergency. The industry has long relied on on-demand to proper. For a famous Tourism hotspot like Kenya, the sector experiences high tourists towards the end of the year, making the first part of the year an offseason for them (Baum & Hai, 2020). Consequently, with the spread of coronavirus, the demand for tourism services was low, promoting the supply to suffer in return.

References

Baum, T., & Hai, N. T. T. (2020). Hospitality, tourism, human rights and the impact of COVID-19. International Journal of Contemporary Hospitality Management.