Employers in the hospitality sector were scrambling to develop plans to either stand down hundreds of thousands of workers or lay them off, as restaurants, bars and clubs shut their doors at noon on Monday.

One of the largest employers, Crown Resorts, which employs an estimated 18,500 workers and contractors, made a statement to the Australian Stock Exchange on Monday afternoon.

The hotels attached to Crown’s casinos in Melbourne and Perth will remain open, but all gaming and restaurants will shut under the government’s orders to limit the spread of Covid-19.

The company and thousands of others were investigating whether to stand people down – allowing them to use their holiday and long service leave but remain employed – or lay them off, which could trigger Centrelink payments.

But the impacts will reverberate well beyond Crown employees.

Crown estimates it has 4,000 small businesses that depend on it, either as suppliers of products and food for the casino or those who provide food outlets in its food courts.

The Star, the other major casino operator, was yet to comment.

The Australian Hotels’ Association issued a statement saying the shutdown was “unprecedented in our peacetime history” and warning it would have “a devastating effect” on the 250,000 people it directly employs.

“We saw what an important role hotels play in their communities during the recent bushfires across large parts of the nation – today’s closure is an unprecedented move which will have a big social impact for months to come,” the AHA national CEO, Stephen Ferguson, said.

The clubs sector will also be hit hard. As a major employer in regional Australia, the closures will ripple through towns that are already suffering from the drought and bushfires.

ClubsNSW said the shutdown was devastating for the 63,000 people who rely on clubs to make a living.

“Clubs across New South Wales are in the process of communicating with their employees on what the federal government’s shutdown means for them,” a spokesman said.

A ClubsNSW census done in 2015 said 49% of those employed in the sector worked in regional NSW.

Much more difficult to assess is the job losses in the restaurant sector comprised of thousands of small businesses.

A site, #ilostmyhosposhift, run by the United Workers Union, was reporting 1,581 jobs lost, 8,173 shifts lost and over $1.3m in wages lost this week. But this is likely to be just the tip of the iceberg.

In the entertainment sector, the impact of the social distancing rules has already led to closures of events and productions with the Media, Entertainment and Arts Alliance inundated with calls from members working in television, theatres and production houses who reported their contracts had been cancelled, shows closed or they were being stood down.

The value of the entertainment industry is worth billions to the Australian economy.

In 2017, ticket sales to theatre and arts productions totalled $23m and generated $1.88bn in revenue, according to the Live Performance Australia study. A 2010 report said live performances employed 13,800 people.

Similarly the live music industry is a major employer with a Music Australia study putting the total employment at 14,800.

“Run of show” contracts are commonplace in the industry, leaving many workers extremely vulnerable, with no recourse to holiday pay or other entitlements.

The Media, Entertainment and Arts Alliance chief executive, Paul Murphy, said that one of the earliest companies to act was Opera Australia, which has stood down its orchestra, but others were following suit. Sydney Theatre Company has cancelled scheduled performances through to mid-year.

The shutdown of television and film production will not only affect jobs now, but industry experts fear it will decimate Australia’s production capacity in the future.

Deloitte Access Economics estimated in 2015 that film and television production and distribution industries directly contributed $5.8bn to Australian GDP and about 46,000 full-time equivalent employees.

Several shows have halted production, including Home and Away and Packed to the Rafters, he said.

The major cinema chains are now closed as well, leaving some of the lowest paid workers – ushers and ticket sellers – without work.

Murphy said employers in the media, entertainment and arts industries must ensure that cash payments set to flow to deal with the impact of the coronavirus crisis are used to keep people on their payroll – and that obligation must extend to any freelancers and contractors.

He said the union is concerned that Sunday’s economic stimulus package places no obligations on businesses to use payments to boost their cashflow to retain their workforce.

“The overriding objective must be to keep people in work, not push them onto the welfare system. All businesses that are receiving government support must do all they can to ensure that the money is used to keep people on the payroll, he said.

“Everyone has to play their part during this unprecedented time, and employers have a moral obligation to do all they can to keep people in the workforce.

“But this message also needs to be conveyed by the government – otherwise we will see a mass exodus of workers from this industry, some of them forever.

Murphy said he was working with the major employer bodies to get a specific assistance package for the arts, to ensure the industry could survive after the crisis.