Note — Sep 06, 2020

Remote Work Is Killing the Hidden Trillion-Dollar Office Economy

Lots of numbers in this piece, to get a better grasp of the size of the tumble many city centres are still reeling from amidst the pandemic. Some of the drops are pretty staggering and affect a much broader swath of workers than “just” those fired, furloughed, or working from home. Restaurants, shops, airlines, office supplies, maintenance, are just some of the fields affected by this redistribution of where people work from, or work at all. Airlines for example have seen a drop of 97% in business travel for July and analysts expect there’s at least a good two or three years of this slow-down still ahead. For those working from home, there are quite a few benefits (and difficulties) and in general knowledge work seems to be trending towards an ongoing chunk of it being done from home.

Vaccine or not, a lot of jobs are going to change, city centres are going to change, and the daily and longterm flux between them, suburbs, and medium and small cities will be an ongoing transition that governments will have to deal with. Yet so far the public facing message pretty much comes down to “go back to work.” We’ll need better, and we’ll need it to factor-in climate, decarbonizing, and equality issues.

A result has been the paralysis of the rarely remarked-upon business ecosystem centering on white-collar workers, who, when you include the enterprises reliant on them, account for a pre-pandemic labor force approaching 100 million workers.rare opportunity

The travel pain is broad. The hotels that typically cater to business travelers are in a crisis, with some poised for bankruptcy. As of July, 23.4% of mortgage-backed loans extended to hotels were delinquent at least 30 days, amounting to $20.6 billion. That compares with $1.15 billion in pre-pandemic delinquent loans, and $13.5 billion at the peak of the 2008 recession.rare opportunity

Regardless of the length of the recovery, it looks likely that airlines and hotels will have to shrink, die, or reinvent. And, in a profound forced makeover, the cities will have to reimagine themselves as well, with a severe potential hit to years of national GDP for the country as a whole.

More → This 🧵 by julian dobson is quite good on this very topic.