Companies are canceling US domestic travel over coronavirus fears - msnNOW
China has been battling an outbreak of a new SARS-like coronavirus (COVID-19), which originated in Wuhan. The virus has claimed over 2,700 lives and infected nearly 80,000 people around the world.
(Pictured) People wearing protective face masks following an outbreak of the coronavirus make their way in a shopping district on Feb. 29 in Tokyo, Japan.
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Muslim pilgrims wear masks at the Grand Mosque in Saudi Arabia's holy city of Mecca on Feb. 28. Saudi Arabia suspended visas for visits to Islam's holiest sites for the "umrah" pilgrimage, an unprecedented move triggered by coronavirus fears that raises questions over the annual hajj.
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Traders work on the floor of the New York Stock Exchange, Feb. 28. Stocks around the world are broadly lower as investors react to news that the novel coronavirus outbreak is continuing to spread to more and more countries, raising fears of a global economic slowdown.
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Ukrainian medical workers wearing protective gear escort a fake patient during a medical training exercise in case of detection of patients with the COVID-19 coronavirus symptoms, at the Oleksandrivska Clinical Hospital, in Kyiv, Ukraine, on Feb. 28.
A government officer sprays disinfectant as a precaution against the COVID-19 outside a department store in Seoul, South Korea, on Feb. 28.
Workers unload groceries at a Sinopec gas station where customers can buy supplies while they refuel as the country is hit by an outbreak of the novel coronavirus, in Beijing, on Feb. 28.
Employees work on the production line of an antimalarial drug that Chinese officials said has curative effect on the novel coronavirus disease, at a pharmaceutical company in Nantong, Jiangsu province, China, on Feb. 27.
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Doctors at West China Hospital of Sichuan University use 5G technology to diagnose COVID-19 patients on Feb. 27, in Chengdu, Sichuan Province of China.
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Hugo Lopez-Gatell Ramirez, Mexico's Undersecretary of Health Prevention and Promotion, holds a news conference on information about the new coronavirus, in Mexico City, on Feb. 27.
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French President Emmanuel Macron, flanked by French Director General of Health Jerome Salomon, meets medical staff as he visits the Pitie-Salpetriere hospital in Paris on Feb. 27 where the first French victim of COVID-19 passed away the day before. France has so far registered 18 infections and two deaths, a 60 year-old French citizen and an 80-year-old Chinese tourist, as European governments scramble to contain a slew of new coronavirus cases popping up across the continent.
Passengers remain onboard the MSC Meraviglia cruise ship in Cozumel, Mexico, on Feb. 27. A cruise carrying 6,000 people which was turned away by Jamaica and the Cayman Islands after a crew member tested positive for flu, has docked in Mexico.
Employees of the China Streel Corp. eat lunch behind plexigass partition boards in a company canteen in Kaohsiung City, southern Taiwan, on Feb. 27. China Steel installed the plexiglass, which cover three sides of the diner, to prevents infection of Covid-19 coronavirus by saliva.
Workers with sanitizing equipment disinfect at the Shanghai railway station on Feb. 27 in Shanghai, China.
People wearing protective face masks, following an outbreak of the coronavirus, are seen in front of the Giant Olympic rings at the waterfront area at Odaiba Marine Park on Feb. 27 in Tokyo, Japan.
A resident of Jongno-Gu wearing a face mask sprays disinfectant as a precaution against the coronavirus at the Jogyesa Buddhist temple on Feb. 27 in Seoul, South Korea.
President Donald Trump, with members of the president's coronavirus task force, speaks during a news conference in the Brady Press Briefing Room of the White House on Feb. 26. in Washington. President Donald Trump announced appointment of Vice President Mike Pence in charge of response to the coronavirus in US.
Policemen guard the entrance of a school, after authorities put the school under isolation because of suspicions of a coronavirus case, after a teacher returned from a travel in Northern Italy, in Vienna, Austria on Feb. 26
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Hong Kong Financial Secretary Paul Chan is seen on a screen as he delivers the annual budget at the legislative council in Hong Kong on Feb. 26. Hong Kong's government said it will give a 10,000 HKD (1,280 USD) handout to seven million permanent residents in a bid to jump-start a recession-hit economy after the coronavirus outbreak.
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Brazilian citizens who were repatriated from China's coronavirus-struck Wuhan enter a plane after their quarantine period ended in Air Force base of Anapolis, State of Goias, Brazil, on Feb. 23.
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British Diamond Princess evacuees depart from Boscombe Down airfield following a repatriation flight from Tokyo, on Feb. 22 in Amesbury, England.
People board a plane chartered for British passengers after they left the coronavirus-hit cruise ship Diamond Princess at Haneda Airport in Tokyo Japan, on Feb. 22.
Association of South East Asian Nations (ASEAN) foreign ministers pose during an emergency meeting with China's Foreign Minister Wang Yi on the coronavirus outbreak in Vientiane, Laos, on Feb. 20.
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Workers go about their duties at a section of the Leishenshan Hospital, the newly-built makeshift hospital for novel coronavirus patients, in Wuhan in China's central Hubei province on Feb. 18. The first group of patients infected with the COVID-19 coronavirus was discharged from Leishenshan Hospital on Feb. 18, according to local media.
Passengers react after they disembarked from the MS Westerdam, back, at the port of Sihanoukville, Cambodia, on Feb. 14. Hundreds of cruise ship passengers long stranded at sea by virus fears cheered as they finally disembarked Friday and were welcomed to Cambodia. China on Friday reported another sharp rise in the number of people infected with a Coronavirus (COVID-19), as the death toll neared 1,400.
This photo taken on Feb. 13 shows a train attendant gesturing to medical staff leaving for Wuhan in Nanchang, China's central Jiangxi province. The death toll from the Coronavirus (COVID-19) epidemic neared 1,400 on Feb. 14, as the United States complained of a "lack of transparency" from Beijing over its handling of a crisis that has fueled global panic.
Jay Butler, Deputy Director for Infectious Diseases addresses the media about response to the 2019 Novel Coronavirus (COVID-19 ) as Senior Adviser Ed Rouse looks on, at the Emergency Operations Center inside The Centers for Disease Control and Prevention (CDC), on Feb. 13 in Atlanta, United States.
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Major companies are beginning to cancel conferences and travel plans within the United States due to the coronavirus, which analysts warn will have cascading impacts on the country’s hotels, airlines and convention centers.
International travel — particularly to Asia — has so far been the hardest-hit part of the industry, though analysts say that could soon change as fears of the coronavirus spread to Europe and North America. Hotels around the country have begun reporting a rise in group cancellations. Some air carriers, including Alaska Airlines and JetBlue Airways, are doing away with cancellation fees as jittery travelers rethink their plans.
“The cancellations are starting to move toward North America,” said Scott Solombrino, executive director of the Global Business Travel Association, which estimates that the slowdown in global travel has already cost American businesses $7 billion this year. “Obviously the concern is that this will have a long-term impact on the U.S. economy.”
Analysts said wide-scale cancellations — which so far have been concentrated in large cities such as New York, Washington and Los Angeles — are starting to hit smaller U.S. cities, as companies change their internal travel policies.
Workday called off a sales conference in Orlando scheduled for next week, while Google and Facebook canceled multiple events in California and Nevada between March and May. Amazon this week told employees to put off “nonessential travel” in the United States, though it did not offer details on what types of trips would qualify. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
Mounting cancellations, analysts said, are likely to have ripple effects throughout the economy, particularly for upscale hotels that rely on group bookings for about one-third of their sales, according to Jan Freitag, senior vice president of lodging insights for STR, a hospitality research firm.
“The most noticeable impact so far has been in group travel, with large conferences around the world being canceled,” he said. “These large group conferences take years and years to plan. If they don’t happen now, there is a good chance they won’t happen at all.”
Executives at Marriott International, the world’s largest hotel chain, said this week that group bookings in the United States have started to take a hit. The Bethesda-based hospitality giant said much of the impact so far has been concentrated in Asia, where it has 800 hotels.
“To date, we have not yet seen a significant impact in the U.S., and our first quarter is off to a solid start, but the situation is fluid,” Leeny Oberg, Marriott’s chief financial officer, told CNBC on Wednesday. “We have seen a handful of citywide cancellations.”
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Booking Holdings, which owns Priceline, Booking.com and Kayak, said this week that it expects hotel room bookings to fall as much as 10 percent this quarter because of the coronavirus.
Shares of hotel companies and airlines plunged this week, as coronavirus-related fears led global markets to post their worst weekly losses since the Great Recession. Shares of Marriott and InterContinental Hotels Group fell about 9 percent apiece, while American Airlines and Jet Blue posted declines of more than 20 percent. Expedia Group, meanwhile, posted a 13 percent drop in share price.
“Every day we think we could be near a bottom, and every day we are not,” Helane Becker, an airline industry analyst for Cowen, wrote in a note to clients this week. “The virus has spread, and the question is how much do people change their travel plans.”
Hostelling International USA, which oversees nearly 50 properties around the country, said group cancellations are on the rise. Individual travelers, though, are “so far going strong,” spokeswoman Netanya Trimboli said.
The company is taking extra precautions by training employees on how to properly clean surfaces and encouraging them to stay home if they feel sick. New signs at its hostels remind guests to wash their hands and cough into their elbows.
Other hotels also report stalling demand, as Americans put off travel plans. But analysts say the largest impact on the hospitality market could come from a slowdown of Chinese visitors, who last year contributed $34 billion to the U.S. economy, according to Philadelphia-based Tourism Economics. Chinese visitors typically spend about $6,000 and spend an average of 15 nights in a hotel while in the United States, the firm said. It expects the number of Chinese travelers to the United States to drop by 25 percent this year.
“Right now there’s a lot of uncertainty,” said Adam Sacks, president of Tourism Economics. “It’s shaping up to be very similar to SARS, when we saw very severe impacts.”
This time, he said, could be worse: Visits from China to the United States have grown nearly 13-fold since 2002, making a possible coronavirus outbreak much more devastating to the U.S. economy than the SARS epidemic was in 2003.
“Reservations are at a standstill,” said Kim Lee, who handles sales at Arc The.Hotel, a boutique property in Washington’s Foggy Bottom neighborhood, where multiple groups have canceled reservations in recent weeks. “We’ve seen a real decline.
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