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Three Industries Facing Debt Collection Crisis in 2020

by | Nov 10, 2020 | Debt Collection | 0 comments

When the COVID-19 pandemic hit the United States in March of 2020, the impact on the economy was immediate and brutal. Across the country, cities and states began to take drastic measures to contain the virus. This included shutdowns of businesses deemed non-essential. The greatest impact was to businesses like event spaces, restaurants, retail stores, and recreational facilities; as Americans had little choice but to stay home and limit their exposure to other people. This also meant that many Americans lost jobs and had to cut costs. This delivered a one-two punch to many industries who rely on recurring billing or payment plans. Now, these businesses are in a crisis to recover those funds and keep themselves afloat.

Gyms and Fitness Centers

The economic impact on gyms has been one the hardest of the pandemic. They were shut down along with other non-essential businesses in early Spring, but they have been one of the last types of business allowed to re-open. Patrons in gyms touch multiple types of equipment, use changing and showering facilities, and breathe heavily in close proximity to each other. This makes it an environment that is especially conducive to spreading the virus. Since most gyms bill on a monthly basis, they have been faced with massive cancellations. This is understandable since their patrons can’t use their facilities. However, many gyms face the choice between collecting their contractually owed fees or going bankrupt.

Event Venues

One of the most emotionally difficult situations during the pandemic has been the loss of important social gatherings. In mid-March, many dreams were shattered as people realized their treasured celebrations were unlikely to go ahead as planned this year. Weddings, quinceaneras, bar and bat mitzvahs, anniversaries, proms, and myriad other events were canceled. But the celebrating parties were not the only ones disappointed by these cancellations. Event venue owners also found themselves in the hook for supplies, rent, and utilities with no payments arriving from their clients. While it doesn’t make sense to charge clients for events that didn’t take place, it is still important for venues to be reimbursed for the products and services they did provide.

Luxury Memberships

Another hard hit industry during this crisis has been the golf and country club industries. Country clubs and golf clubs are uniquely social institutions. They often house restaurants, group activities, restaurants, sports, and more. Because this requires people to be together in close proximity and the clientele skews older, these businesses have had to shut down sooner and for longer. Members of these establishments are less likely to have lost jobs or be in financial crisis at this time, but they may still choose to resign their memberships if they are unable to use the facilities. Because these clubs often house event venues as well, they are dealing with this crisis from both sides. While understanding is paramount at a time like this, there may still be instances where it is appropriate to collect on outstanding fees. This may help you weather the storm and be able to open your doors again when the crisis has passed.

Southwest Recovery Services Can Help

During this unprecedented crisis, it is more important than ever to handle debts with care and compassion. That has always been our mission at Southwest Recovery Services. We function as an extension of your business, and always represent you in the most positive light. We can help you recover the money you need to stay operational while treating your clients with respect. Give us a call today to get started!