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The Travel Industry and Pandemics
By Anne R. Lloyd-Jones
Monday, 17th February 2020
 

As of the writing of this article, the Coronavirus pandemic is only a few weeks old, yet it is clear that this event is already having a significant impact on the travel industry.

The World Health Organization (WHO) has declared the virus, now known as COVID-19, a global health emergency, and individual governments have imposed travel restrictions and other measures, principally directed at travellers arriving from China.

To gain some perspective on the potential impact of the current Coronavirus scare on the lodging industry, this article looks at the SARS pandemic of 2003, which has strong parallels to the current Coronavirus situation. Both originated in China, and the diseases are similar in terms of symptoms, severity, and transmission.

The SARS impact will be considered from two perspectives: how a pandemic scare can affect an individual market, and the broader impact on international travel.

The SARS Outbreak of 2003

Severe Acute Respiratory Syndrome (SARS) was first reported in Asia in February 2003. Based on further research, the earliest case dates to November 2002, while the last cases were reported in June 2003. During that period, a total of 8,098 cases were reported; of those cases, 7,324 people recovered, and 774 people died.

Although the virus appeared in 37 countries, the majority of the cases were in Asia. The only country outside of Asia to report a significant volume of cases was Canada, and most of these were in the greater Toronto area.

Location and Number of SARS Cases and Deaths

Source: World Health Organization

As it has in the present situation, the WHO issued regular bulletins as information concerning the disease and identified cases became available. The first of these was issued on March 15 and was followed by regular updates. The bulletins generally addressed the number of cases and deaths, reported the areas affected, and discussed the progress in identifying and treating the disease and its symptoms.

The WHO bulletins also addressed the issue of travel and, as it deemed appropriate based on the number of cases and the pace of new cases reported, issued travel advisories pertaining to specific regions. Notably, at no time did the WHO issue a travel restriction; the strongest advisory recommended that people “postpone all but essential travel” to specified destinations.

The destinations initially specified were Hong Kong and Guangdong Province, China. Toronto, Beijing, Shang-XI Province, Taiwan, and Inner Mongolia were subsequently added to the list.

Ultimately, the impact of the Coronavirus on the global travel industry will depend on the course of the pandemic, the extent and duration of travel restrictions and, perhaps most significantly, the media’s coverage of, and the traveling public’s response to, these events. Clearly, the U.S. lodging industry and other sectors that benefit from travel and tourism will be negatively affected; some markets are already feeling this impact.

Over the longer term, however, the outlook is more optimistic. As is illustrated by travel patterns following prior pandemics, the volume of travel can recover relatively quickly.

Moreover, China continues to be a significant source of tourism for the U.S., with the potential to generate substantially more visitors and economic impact than recorded in recent years. As the trade issues continue to be resolved, the U.S. can expect to participate in this expanding market.

Read the full article here

Anne R. Lloyd-Jones, MAI, CRE, is Senior Managing Director of the New York office, and Director of Consulting & Valuation of HVS, the premier global hospitality consulting firm. Since joining HVS in 1982, Anne has provided consulting and appraisal services to over 5,000 hotels. Anne’s particular areas of expertise include market studies, feasibility analyses, and appraisals. She is also an expert in the valuation of management and franchise companies, and brands. Her experience includes a wide range of property types, including spas and conference centers. She has appeared as an expert witness on numerous occasions, providing testimony and litigation support on matters involving bankruptcy proceedings, civil litigation, and arbitration.

For further information, please contact Anne at +1 (516) 248-8828 Ext. 208 or ALloyd-Jones@hvs.com / www.hvs.com

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