The coronavirus outbreak is crippling the $1.7 trillion tourism industry, the biggest setback for the travel sector in almost 20 years, according to reports on Wednesday (March 4).
International tourism generated $1.7 trillion in revenue in 2018, according to the UN World Tourism Organization. Previous travel industry downturns were triggered by the 9/11 terrorist attacks in 2001, the SARS pandemic in 2002 and the Iraq war in 2003.
Hotels in Italy said more than 50 percent of reservations were canceled in three days last week. Italy has the biggest outbreak of the virus outside of Asia.
“We had our ups and downs in the past, but nothing like this,” said Roberto Cassani, 58, president of the Como hotel operators’ association. “American tourists, in particular, seem to be victims of a collective psychosis. I am really worried.”
The coronavirus could cost the industry some $47 billion per month, according to the Global Business Travel Association. The International Air Transport Association anticipates roughly $30 billion in lost flight sales.
“We aren’t capable of saying how long the situation will last,” said Ana de Pro, chief financial officer of online booking software Amadeus.
The spread of the virus has been slowing down in China but increasing elsewhere. South Korea and Italy have reported over 8,000 cases combined. The World Health Organization said on Tuesday (March 3) that the global death rate is 3.4 percent. Nine people have died of the virus in the U.S.; 2,981 have died in China. There are 80,270 people infected worldwide.
Business travel is also sliding as companies like Facebook and Google hold webcasts instead of in-person meetings. L’Oreal SA, Nestle SA and Cargill Inc. have canceled global travel in the coming weeks and trade fairs in Berlin, Geneva and Barcelona were canceled along with Hawaii’s Festpac cultural festival.
Covid-19 is a genetic cousin of the SARS virus, although it is less serious. It does, however, spread person to person.