World Panel
Viewpoint 4 March 2020

What is your take on the coronavirus and its impact on our industry?

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— 22 experts shared their view

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Greg Bermansupplier view
COO at Shiji Distribution Solutions

The short-term impact of 2019-nCoV novel coronavirus on the global travel industry has been significant. According to the International Air Transport Association, airlines are set to loose $133 billion in revenue if COVID-19 continues, while travel by Chinese nationals has slowed significantly. Coronavirus has also affected the business community, as major corporations scale back on nonessential travel. This has led to the cancellation of several major global business conferences, including the Mobile World Conference in Barcelona, and the Geneva Motor Show, and of-course ITB Berlin, the largest and most notable travel tradeshow in the world.

Hotel brands can weather the short-term economic effects of coronavirus by focusing on their distribution channels. Typically, a brands' booking mix hovers around 70% and 30% thirdparty distribution channels, split evenly between ADS and GDS/Corporate bookings. When a major shock hits the industry—whether that's a recession, a pandemic, or some other global crisis—the pendulum shifts in favor of third-party distributors. This is because hoteliers need to utilize all their third-party capacity to put “heads in beds” in the event of a global crisis.

Additionally, while coronavirus' short-term impact on the travel industry has been significant, it's important not to panic or overstate its long-term effects. The international community is already working diligently to contain the virus and its potential economic fall-out: The US Congress is set to pass roughly $1 trillion in emergency funding to deal with the virus, while the EU has formed a “corona response team,” and G-7 finance ministers are starting to develop a global economic response.

We must also remember that the global travel industry is very resilient: The desire and need to travel is enormous, and travel rates typically rebound to normal once people feel it is reasonably safe to do so. Indeed, 72% of Chinese travels (the largest subset of outbound travelers) have already indicated that they will travel once the pandemic subsides and recovery is in place; %21 indicated they would travel as soon as possible post pandemic. We saw similar quick rebounds following the SARS and Ebola outbreaks, and it is likely that we will witness a similar rebound on a global level with coronavirus as well. 

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