26 Feb 2020
Posted in Coronavirus
As coronavirus spreads beyond Asia, global tourism sector must brace itself for significant headwinds
Following the news of serious coronavirus outbreaks outside of Asia, the tourism industry must ready itself for a rocky ride.
Nick Wyatt, Head of R&A and Travel & Tourism at GlobalData, a leading data and analytics company, offers his view on the situation:
“If there was previously a temptation to view the coronavirus as a China or Asia issue, then developments this week must force a shift in mindset.
“With the news that 12 towns in Italy are on lockdown and countries like Austria and Croatia announcing their first cases, it is readily apparent that the impact is likely to be felt on a more global scale than was perhaps previously envisaged.
“Governments have very much erred on the side of caution with regards to restrictions and guidelines and some high profile airlines have followed suit, first imposing and then extending flight suspensions. Incessant media coverage of the issue is also impacting traveler confidence.
“These actions restrict people’s ability and willingness to travel and this is obviously creating significant headwinds for the industry. Airline stocks were among some of the most notable losers yesterday, but other operators must brace themselves too.
“Occupancy rates and daily rates in hotels will suffer, while OTAs are reliant on people booking trips. Cruises have seen negative press coverage in the last few weeks which is not helping operators there and IATA has estimated that the virus will cost the airline industry $30bn in revenue.
“While it’s important to temper the hysteria and make it clear that the travel & tourism sector is not going to grind to a halt altogether, we must be realistic and acknowledge the fact that it will need to navigate choppy waters for some time to come.”