Coronavirus forces hotels to close...
As the coronavirus claims more victims this week than SARS did at the turn of the millennium, the economic loss is felt in the hospitality industry. Airlines grabbed headlines by canceling routes in and out of China but travel impacts the hotel sector just as critically.
Hilton and Wyndham announced closures of 150 and about 70% of hotels in China respectively. This amasses to over 60,000 hotel rooms that will go unoccupied for an undetermined period of time. Overall, according to STR, occupancy in mainland China has dropped by 50% from the beginning of January. Following suit Airbnb has suspended booking in the country until April 30.
However, the crisis is affecting the hotel industry globally. Tourism Economics predicts a 28% drop in travel to and from China which amounts to $5.8 Billion of lost revenue worldwide. Some of this revenue is in the form of refunds and cancellation fees waived due to the outbreak.
As the World Health Organization is still grappling with the spread of this virus and its 45,000 affected patients, it is unclear how long the effects will linger or the extent of the recovery period.
The hotel industry will have to continue to be vigilant of this outbreak and its effects not only on travel but on labor markets throughout the world. As governments put restrictions in place and deal with the effects of the crisis, the economic scars it will leave on an industry dependant on fluid borders will be tested.