There are some industries that may never recover from the COVID-19 global pandemic. What are you supposed to think about the shares in those industries?
It's clear that some shares are going to see a long-term boost to user numbers and growth, such as Pushpay Holdings Ltd (ASX: PPH) and Kogan.com Ltd (ASX: KGN).
But what about some of the industries that are seeing the opposite? A huge drop off of activity, perhaps a permanent shift in the mindset of their customers?
Travel is one industry that many never recover from COVID-19
Australia has virtually blocked international travel because of the ongoing coronavirus pandemic. I think the travel industry may never be able to fully recover from COVID-19. Particularly if there are permanent costs and screenings of passengers. I'm somewhat confident that domestic travel will be available sooner rather than later. But international travel and tourism could be limited for some time.
How long will it take Sydney Airport Holdings Pty Ltd (ASX: SYD) to see most of its international volume to come back? The physical retail network of Flight Centre Travel Group Ltd (ASX: FLT) may never be the same again. When will Air New Zealand Limited (ASX: AIZ) be able to report good passenger numbers again?
I do think that Webjet Limited (ASX: WEB) and Qantas Airways Limited (ASX: QAN) could be some of the strongest ASX travel performers due to Australia's good infection position, the need for flights to travel to most parts of Australia and the desire of people to travel.
Physical retail stores
Forcing everyone to stay at home for a few weeks may have caused a fundamental shift in people's mindsets about shopping. Online shopping can be very convenient. You don't have to drive all that way, find a car park spot and so on. I think the physical retail store industry may never recover from COVID-19. We're already hearing some shares like Adairs Ltd (ASX: ADH) and Premier Investments Ltd (ASX: PMV) report huge online growth, and those shoppers may stay online. Retailers reliant on their physical stores could struggle.
There are some shares that have been doing eCommerce very well such as City Chic Collective Ltd (ASX: CCX).
Property trusts in general
The knock-on effects of COVID-19 will be very interesting for property. Some commercial property bulls are claiming that social distancing will require businesses to rent twice as much space so all employees can be appropriately separate. I'm not so sure that will happen.
I think this period is going to kickstart a longer-term shift to a lot of workers working at home. Imagine the costs that could be saved if businesses can downsize or completely leave their expensive CBD building.
It's also an interesting question for shopping centres and hotels. Almost the entire real estate investment trust (REIT) industry may never recover from COVID-19.
There are some interesting questions for REITs like Scentre Group (ASX: SCG), Vicinity Centres (ASX: VCX), Hotel Property Investments Ltd (ASX: HPI) and DEXUS Property Group (ASX: DXS). They all still have significant value, I'm not not sure they'll command the same premium as before.
But I do believe that REITs like Goodman Group (ASX: GMG) and Rural Funds Group (ASX: RFF) still have promising futures.
Foolish takeaway
There are industries out there that will fully recover from COVID-19. Those shares could be cheap, but you have to consider each idea carefully.
