Impact of Consumer Awareness and Behavior on Business Exit in Hospitality, Tourism, Entertainment, and Culture Industries Under the Covid-19 Pandemic

Abstract

COVID-19 has a negative impact on business performance through anti-contagion regulations. It is especially serious in specific service industries such as hospitality, tourism, entertainment, and cultural industries. Contrary to several countries and regions in Europe and North America where economic and social activities were restricted, a more sophisticated regulation, “emergency status declaration,” was announced in Japan four times from April 2020 to date because of legal constraints. Empirical studies have been carried out on the effects of COVID-19 (including those of anti-contagion measures and support policies) on business performance, but most of them rely on one-shot survey data on firms; thus, they do not consider consumer awareness and do not target specific service sectors that are most directly damaged by anti-contagion regulations. Therefore, this study uses our original monthly survey data on consumers and telephone directory monthly data to investigate empirically the effects of consumer awareness and attitudes on business exits at the prefecture-level, focusing on specific service sectors including hospitality, tourism, entertainment, and cultural industries. Based on panel fixed-effect estimation, our preliminary results show that an increase in consumers’ risk aversion, sympathy for self-restraint from going out, and a decrease in going out with family members significantly increases the exit ratio in specific service industries in the same prefecture. Moreover, these effects vary depending on consumer types.