Over the past few months, the infamous flu, coronavirus, has been the center of attention in the media. Since the first breakout in late December, the illness has impacted 32 countries, including the United States.
As the number of cases continues to spread, traveling concerns are also rising. Several recent travel notices have been posted by the CDC to inform travelers and clinicians about current health issues that could affect travelers’ health.
These travel warnings and changes have caused a large impact on the hotel industry. Out of every country, China has the largest amount of travelers visiting the United States. With restrictions on Chinese travelers coming in and out of the States, tourism is taking the biggest hit.
What The Stats Show
China is now the largest tourism source market in the world, with an astounding 159 million outbound tourists spending $275 billion in 2019. These numbers are expected to dramatically decrease for the next few years.
Tourism Economics says this could result in a 28% drop in Chinese visits to the US in 2020, translating into a $5.8 billion loss in airfare and domestic spending. Chinese tourists who traveled to the US last year stayed, on average, 18 days longer and spent around $7,000 more per visit than most other nationalities.
According to Business Insider, the coronavirus is expected to cost the US travel industry more than $10 billion over the next four years, with more than half of that loss coming in 2020.
What This Could Mean For Hospitality
This large drop in tourists will create a significant economic impression on hotels, as rooms will not be at full occupancy. Hotels should expect many last-minute and planned out cancellations. Unfortunately, filling rooms will not be the only issue.
Disruptions in the supply chain can make it difficult to complete day-to-day hotel operations. Without the regular flow of supplies being sent in from various locations, materials may become scarce. Our team has seen limited disruptions, but RFID chips and base pens (non-printed portions) are two products that we have monitored closely to try and limit the impact.
Similar to any emergency situation, it is crucial for hotel management teams to be able to react quickly to potential location closures and concerned employees. Management should also take any necessary precautions, such as providing basic protection for guests.
Hotel New Resource stated, “For the hospitality industry, the virus has created severe disruptions in the largest single source of tourists. Hotel companies, both inside and outside of China, have warned of reductions in revenues, and as the virus continues to spread, the trend does not bode well. Like the SARS virus of 2002-2003, coronavirus has the potential to disrupt travel for months, and the travel industry will take time to recover.”
As the year continues, we expect to see more predictions of where the hospitality industry will go as the coronavirus continues.
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