When will Chinese manufacturing companies reopen?

The deadly Coronavirus, also known as COVID-19, continues to spread rapidly worldwide, with over 80,000 confirmed cases of the disease and more than 2,700 resulting fatalities. Our previous report on the Coronavirus’s impact on hospitality stated that factories were extending closure up to 14 days past the initially planned shutdown time for the Chinese New Year. Though some factories have reinstated production at low volumes, many others are continuing to hold off on reopening for the foreseeable future. 

Safety Precautions Delay Shipping and Production

One reason production cannot ramp up more quickly is the lack of factory workers. Government-issued travel bans prohibit many employees from returning to their jobs. In other cases, factory workers are voluntarily taking leave to lower their risk of exposure to the Coronavirus. The scarcity of manufacturing laborers is so severe that some companies are offering financial incentives for workers who come back, in hopes that a few are willing to overlook potential health repercussions in exchange for a bonus.

Even finished goods are subject to delays. Shipments from China are going into quarantine for a two-week period at any indication that someone on board may have symptoms of COVID-19, further suspending product deliveries and receiving.

A Temporary Solution

Now more than ever, the hospitality industry is relying on domestic manufacturers for FF&E. However, this remedy does have a time limit. American-made goods often have parts that are outsourced from countries like China. Once domestic vendors run out of supply, they, too, will experience setbacks from prolonged factory closures. 

One of the biggest challenges facing the hospitality industry regarding the COVID-19 outbreak is a lack of knowledge. News reports and statements from China’s government only release so much information, making it difficult to assess when Chinese manufacturing will return to previous production rates.  What we do know is that the already significant impact of the Coronavirus on hotel FF&E supply chains will continue to grow.