The pandemic of COVID-19 has caused devastation throughout the globe. Having originated in the Wuhan City of China, the novel Coronavirus has created a panic situation among the people worldwide. Each and every country has been affected by COVID-19 and is in great turmoil. The death toll that stands at 234,000 as of May 01, 2020, further adds to the grave situation. The horrifying statistics depict the seriousness of the situation. Apart from affecting the lives of the people, the pandemic has led to the loss of revenues of a number of industries.
The Effect of Coronavirus on the Travel Industry
Among all the industries, the travel industry is being affected the most. COVID-19 has literally brought the travel industry to a standstill. The travel industry that witnesses nearly a billion trips a year has come to a complete halt due to the rapid spreading of Coronavirus. As social distancing and lockdowns are being used as tools to bring the situation under control, the travel industry continues to suffer. With people staying back at their homes, taking up work from home, and canceling their travel plans, the travel industry is largely affected.
Coming to the travel industry of the United States of America, the losses are snowballing. According to the US Travel Association, the collapse in the travel industry of the USA will lead to a 910 billion dollar hit to the country’s economy. According to the data recorded by Tourism Economics, the travel and tourism industry of the US will potentially suffer a loss of about 24 billion dollars in foreign spending. The crisis of Coronavirus is affecting the industry really hard and pretty fast. The airlines and hotels are the ones that suffer the immediate repercussions of the pandemic.
Impact of Coronavirus on the Aviation Industry
Since the very beginning of 2020, many countries started shutting down their borders that led to the travel restrictions. The aviation industry faces a direct impact of the Coronavirus outbreak. In the month of March 2020, American Airlines have reduced 10% of its international flights. The loss of revenues of the airlines across the globe is forecasted to be 252 bn USD. Owing to the lockdowns, the aviation industry reports a huge number of flight cancellations.
As of May 21, 2020, the number of flight cancellations surpassed the number of new bookings in the US aviation industry. It is even a worse situation than that of 9/11, the US Treasury Secretary has said. Moreover, the airlines have to cancel the booking and refund the amounts to the customers, thereby putting them under more stress. In the wake of the novel Coronavirus, the employee furloughs, capacity cuts, and cash constraints in the aviation industry are domination the news.
By the month of June, the American airlines plan to retire the remaining 767-300 ERs. Moreover, it is not likely to back-fill the capacity any time soon. The network of the US airlines expects to see a change after the pandemic ends. The decisions that the US airlines will make in the post 6-12 months of the pandemic will shape the US airline network’s future.
Impact of Coronavirus on the Hospitality Industry
Along with the aviation industry, the hospitality industry around the globe is suffering much loss due to the Coronavirus pandemic. The COVID-19 is having a severe economic impact on the hotel sector. According to the American Hotel and Lodging Association, about 45% of the jobs in the hotels are likely to be eliminated. Keeping in view the present status, a 30% drop in the hotel occupancy can be predicted. If such a case happens, the hotels will experience a loss of about 4 million jobs.
Owing to the current situation of travel demand, the hotel industry will be losing nearly 1.4 billion dollars of revenue every week. The economic impact on the hospitality industry due to the novel Coronavirus will ultimately affect the United States economy. According to the reports of the World Street Journal, Marriot Hotels have even started furloughing their employees. Urgent actions are necessary to address the situation and save the hotels from incurring huge losses.
The Near Future
As the case of the Coronavirus is still on the rise, the future of the travel industry remains still uncertain. A specific solution needs to be crafted in order to bring the grave situation under control. The broad shutdowns owing to the rapid spread of the Coronavirus are affecting the travel and hospitality industry really hard. Government aids can help in preventing the disruption of various industries. Still, there is a positive hope for the bright future of the travel and aviation industry. As the world recovers from the shock of COVID-19, the demand for these industries is likely to increase.