The 2008-2009 recession hit every industry around the world very hard. One of the most affected industries, however, was the hospitality and restaurant industry. Before the recession, oil prices were at a all time high, and hotels and travel companies had already started to see a significant decrease in travel and tourism. When the stock market crashed, millions of Americans lost big investments or life savings. At the same time, the housing market collapsed and many homes in America were in foreclosure. Banks were not giving out loans or credit, so discretionary spending plummeted and consumers weren't traveling anywhere. Because Americans had no money to spend, they also were not eating out as often as they might be, so restaurants saw a decline in customers as well. The end of 2008 and all of 2009 was a very difficult time for the hotel and restaurant industry. It has only been since the end of 2010 that this industry has started to see a turn around in it's balance sheets. Consumers are slowly starting to gain confidence in the market once again, and there has been growth in the HRL industry. Nothing is stable yet by any means, but if the stock market continues to grow and Americans increase their spending, this industry will see some large growth .
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This posting, with some further research helped me write one of my sections (Section 1) of the industry paper which was about the background of our industry. We must add that hospitality industry is a luxury good, thus it is the first thing that consumers will stop consuming. As it is not a basic good customers can live without traveling or going to restaurants for example. They chose to save and not to spend and thus the circulation of money in the overall economy declined.
ReplyDeleteCOMMENT POSTED BY: Katerina Argyrou
Recession is main reason for each and every industry negatively. Hospitality is also couldn't far away from recession. Ratio of profit is going down in hospitality business peoples have no faith to invest their money in this industry at the time of recession.
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