Travel & Tourism: Airline, Cruise Ships and Conventions Face Uncertainty

Travel & Tourism: Airline, Cruise Ships and Conventions Face Uncertainty

From the airline industry to leisure travel to conventions, perhaps no other sector of the economy is facing the degree of uncertainty of a post-shutdown future as the tourism industry. In the course of the past eight weeks, cruise ships were halted, hotels closed en masse and thousands of association meetings, conventions, festivals and concerts were stopped in their tracks. The travel industry supports 15.8 million jobs in the United States and $2.6 trillion in economic output.

The U.S. Travel Association said losses could total $910 billion, seven times the impact of 9/11.  The association, which represents about 150 travel-related businesses was predicting tourism industry job losses of 4.6 million, but the projections were increased to 6 million by end of April.

Those losses span all spectrums of the tourism industry –lodging, retail, restaurants, transportation and attractions.

This week Disney estimated it had lost $1 billion in operating income due to COVID-19 from its domestic and international parks and resorts. Airbnb cut 25% of its staff and scaling back planned investments in hotels and other ventures. Host families also saw their side business drop off completely, other than those who repurposed to house health care workers and other first responders.

For cities that rely on the economic impact of convention goers and tourists, cities such as Miami, New Orleans, New York, Las Vegas and Denver, and experts expect coronavirus-related downturns in conventions and related businesses to continue into 2021.

Treasury Awards Airlines $25 Billion to Stave Off Layoffs

Airline trade group Airlines for America testified before a U.S. Senate hearing that airlines are losing $10 billion per month and flights are averaging fewer than two dozen passengers during the shutdown. Net booked passengers have fallen 100% year over year, and 80% of scheduled flights have been canceled through June, with half of all aircraft (3,000) grounded. The U.S. Treasury has awarded nearly $25 billion in grants to airlines to help them meet payroll costs in exchange for them agreeing not to lay off workers through Sept. 30. Meanwhile, the Air Transport Association predicts airfares could go up by 50% if airlines implement social distancing measures such as leaving seats empty.

Cruise Industry

Carnival Cruise Lines announced it would begin to phase in cruises following the coronavirus outbreak beginning Aug. 1 with eight ships sailing out of Port Canaveral, Galveston and Miami. Carnival claims it is losing $500 million per month during the shutdown. Norwegian Cruise Lines on Tuesday said it may not remain solvent following the shutdown in operations and travelers’ presumed slow return to the seas.

A House panel has opened a probe over cruise ship outbreaks and the industry’s role in spreading the disease around the globe amid reports that the cruise industry ignored the risk of passenger infection

Meanwhile, Cruise Lines International Association (CLIA) announced it was “developing more stringent boarding procedures, additional onboard public health and sanitation protocols, monitoring capabilities, quarantine arrangements and shoreside care for guests and crew” for its members.

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