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Coronavirus takes toll on travel sector confidence

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The vast majority (80pc) of travel managers believe it is likely their travellers will change plans to avoid flying and business travel (stock photo)

The vast majority (80pc) of travel managers believe it is likely their travellers will change plans to avoid flying and business travel (stock photo)

PA

The vast majority (80pc) of travel managers believe it is likely their travellers will change plans to avoid flying and business travel (stock photo)

There's nothing more worrying in business - especially in the travel and aviation sectors - than uncertainty. And the uncertainty over coronavirus has eclipsed all other business threats - politics and terrorism included.

With airlines avoiding China until the end of this month, March onwards is crunch time to decide on action in the longer term regarding the world's second-biggest economy.

But even in the last few weeks, the disruption has been considerable, with travel managers spooked.

A survey by the Washington DC-based meetings and travel body the Global Business Travel Association, which has 9,000-plus members, found that 89pc reported they have employees who travel to China and other international destinations for business travel. Of those, nine in 10 are concerned about the virus spreading around the world, with 40pc saying they are "very concerned".

And those in the front line - business travellers - are worried, with seven out of 10 travel managers reporting their employees have expressed "a lot" (27pc) or "some" (42pc) concerns about the disease's spread.

Health screenings at airports are also a major issue, with half of those surveyed admitting their employees are concerned about screenings.

The vast majority (80pc) of travel managers believe it is likely their travellers will change plans to avoid flying and business travel.

Almost half (46pc) of travel managers say it is "very likely" their travellers will change their plans.

The evidence is there from the last few weeks. Global travel and data analytics company Ascend by Cirium says nearly 10,000 flights have been cancelled since the outbreak in China.

And those figures - mainly of domestic trips in China - are only up until the end of last month, before the mass cancellations by global carriers from the Middle East and North America. The difficulty is that it's hard to quantify the actual knock-on economic effects, but Federal Reserve chairman Jerome Powell warned the US Congress on Tuesday that the disease could hurt the global economy.

"We will be watching this carefully. What will be the effects on the US economy? Will they be persistent? Will they be material? That's really the question," he said.

Powell, who was also meeting with Congress leaders yesterday, added: "We know there will likely be some effects on the United States."

The only upshot, for now, comes from Ascend by Cirium's chief economist, who noted that "data clearly shows the dramatic impact that coronavirus is having" and "the outbreak will inevitably cause significant disruption of schedules and travel patterns in the short and medium term".

But he also believes that the Sars outbreak - and its containment - 13 years ago is a source of hope: "The precedent of the Sars outbreak indicates to us that the underlying demand for travel driven by GDP growth will in time produce a robust recovery."

How long a disruption, and when the recovery comes, are the two over-riding concerns.

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