After this is over (whenever that is) we expect people to resume eating out and traveling. I agree that it's likely that 50% of restaurants and 25% of hotels/spas would become bankrupt and shut down, but that does not mean a 50% / 25% reduction of employment; I would expect most of the bankrupt restaurants and hotels/spas to be immediately replaced with new ones, employing much of the same people and renting much of the same premises (only cheaper), and ran/owned by the same people. In such an environment, the main impact of a restaurant going bankrupt is that the creditors and investors of that restaurant lose their capital, but it can reopen after a reorganization when there's demand once again.
You are of course correct. There will be a bottom and then a recovery.
The speed of recovery will depend on how much liquidity will be available in the market. And I believe it’s going to be quite low.
You see, all of these business depend on discretionary income and after the shock to the people they will sit on any penny or they will not have it themselves.
I believe we will eventually get out of this but my timeline is 3-5 years. If people are unemployed for more than few months their prospects drop rapidly. People with no options produce ruthless competition that pushes salaries down producing wider inequality and limits the discretionary funds needed to spend in those establishments in the first place producing quite a vicious circle.
I agree that wider inequality is a likely outcome.
There will be people who won't be able to spend anything because the depression drained them absolutely, and there will be people who are accumulating income that they can't spend due to the lockdown, and will have the funds to resume all the postponed vacations with vigor as soon as they can - in the aftermath, tourism will be cheap for those who have discretionary funds for tourism, because many won't, and the service industry will be agressively competing for any income they can get while having a cheap workforce.
