Pandemic Threatens IMI Revenue and Long-Term Viability

ResearchPandemic Threatens IMI Revenue and Long-Term Viability

The COVID-19 pandemic and accompanying closure of non-essential businesses have severely compromised the financial standing of illicit massage businesses (IMBs) across the country. Once considered a low-risk, highly profitable criminal enterprise, we assess nearly all IMBs will likely be approaching complete insolvency should the pandemic and near-zero buyer demand persist for five more months (1), with many approaching insolvency much sooner.

Illicit Massage Industry

We judge the majority of IMB revenue will continue to be generated from high-frequency commercial sex buyers, as low-frequency buyers will probably avoid IMBs in the short-to-medium term. We further assess that many IMB owners will almost certainly explore alternative revenue streams, at least temporarily, to avoid the permanent closure of their businesses, such as enrolling in small business assistance programs. While IMB owners will try to capitalize on the eventual re-opening of non-essential businesses, state and city leaders are well-positioned to prevent IMBs from returning to normal business operations.

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