Intro: The Covid-19 pandemic rattles industries after industries as it surged across the world. Here’s a look at the biggest losers in 2020 and a preview of what 2021 may bring
1. Travel and hospitality
Going on vacation wasn’t an option for most during the pandemic. The cruise industry was battered as Carnival (CCL), Royal Caribbean (RCL) and Norwegian (NCLH) were forced to suspend voyages for much of 2020 and into 2021. The news wasn’t much better for hotel chains, which were hammered by a decline in demand for both leisure and business travel.
What’s next: The industry is hoping for a rebound as would-be travelers look to hit the road in 2021 once vaccines are widely available, but it’s not clear whether business travel will approach pre-pandemic levels at a time when video conference calls are the way.
Adding insult to injury for the big hotels, Airbnb soared when it went public in December.
2. The oil industry
The oil industry had a miserable 2020. Plenty of industries grappled with plunging prices in 2020, but oil is the only major commodity that went negative. The unprecedented trip below zero in the spring was caused by an epic collapse in demand during the pandemic and a price war between Saudi Arabia and Russia.
The S&P 500’s energy sector is down by more than 30% this year, making it easily the worst performer in the stock market.
What’s next: The oil industry certainly will benefit as the US economy reopens in 2021 and people start flying and driving more. But coronavirus vaccines won’t fix oil’s bigger threat: a climate crisis that is causing investors to dump fossil fuels.
This was easily the worst year for America’s banks since the Great Recession. Lenders suffered tens of billions of dollars in losses as they braced for loan defaults and share prices spiraled lower. Even big banks such Citigroup (C) and Bank of America (BAC) are finishing the year sharply lower, and Wells Fargo (CBEAX) remains a hot mess
What’s next: The silver lining is that the US banking system just endured a real-world stress test — and it passed. If Wall Street’s V-shaped recovery spreads to Main Street, banks stand to be winners in 2021.
4. Airlines and Automakers
The airline industry had awful years in the past, but none were as devastatingly horrendous as 2020. US air travel came to a virtual halt in April. Traffic rebounded modestly late in the year, despite climbing Covid-19 cases, but the number of passengers screened by TSA at US airports was still down 63% compared to a year ago during the holiday travel season.
Similarly, the auto industry suffered a body blow from the pandemic in its early months, as factories shut down and demand for cars fell sharply.
Job losses soared and car companies reduced shifts for millions of autoworkers.
What’s next: More losses are expected in the fourth quarter and into 2021. Air travel isn’t expected to recover for several years, even as the vaccine raises hopes for the end of the pandemic.
Many commuters are concerned about using public transit or ride-hailing services such as Uber. That could boost the auto industry recovery in 2021.
5. Movie industry
The coronavirus pandemic forced theaters shut around the world, leading US box office sales to plummet nearly 80%, according to Comscore, It also pushed more people stuck at home to streaming. Netflix and Disney+ thrived while the $43 billion global theater global business was ravaged.
What’s next: With traditional studios including Disney and Warner Bros. going all-in on their streaming ventures, theaters find themselves in a perilous position. But the biggest question in Hollywood is will consumers return to the cineplex once vaccines hit critical mass?