GlobalData: Tourism Sector Must Brace For Headwinds As Coronavirus Spreads
Anna Kroupina, Open Jaw
Following the news of serious coronavirus outbreaks outside of Asia, the tourism industry must ready itself for a rocky ride, says GlobalData.
“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," says Nick Wyatt, Head of R&A and Travel & Tourism at GlobalData.
With 12 towns in Italy currently on lockdown and Austria and Croatia both announcing their first cases, these are strong signs that the coronavirus impact will likely to be felt on a more global scale than was previously anticipated.
“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 traveller confidence," says Wyatt.
As a consequence, these actions restrict people’s ability and willingness to travel and this is creating significant headwinds for the industry. Airline stocks were among some of the most notable losers yesterday, but other operators must brace themselves, too.
Wyatt says that 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 and IATA has estimated that the virus will cost the airline industry US$30 billion 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," concludes Wyatt.
Anna Kroupina Journalist
Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.