Subway commuters in Shanghai wear surgical masks amidst a deadly outbreak that is quickly spreading throughout China.
Photo credit: Robert Wei / Shutterstock
Airlines and hotels are bracing for a rough year ahead after Tourism Economics released estimates showing that the coronavirus will cost the U.S. travel industry at least $5.8 billion in 2020.
The virus, which originated in Wuhan, China, has now killed more than 1,100 people across the globe, with confirmed cases in at least two-dozen countries.
Although the number of cases in the U.S. remains relatively small, several major airlines have temporarily suspended flights to and from China as a precautionary measure. Additionally, the Trump administration has implemented travel restrictions that deny entry to non-citizens who recently traveled to the country.
According to Business Insider, travelers from China spent approximately $34 billion on American lodging and transportation services last year, making it one the largest sources of U.S. travel-related exports. Experts say that the outbreak could cause Chinese visits to the U.S. to drop by as much as 28% this year.
Richard Falkenrath, chief security officer at investment management company Bridgewater Associates, says that the economic impact will be felt all over the world.
“China is a far more important driver of the global economy than it was in 2003 during SARS and further disruption to production and travel will continue to create meaningful global ripples,” Falkenrath explained.
A recent survey conducted by Morning Consult revealed that 44% of respondents were less likely to travel to foreign countries over the next six months because of the coronavirus. But that’s not all—17% also said they were reluctant to take domestic trips due to the outbreak.
“If enough consumers push back their plans until later in the year, corporate earnings may reflect atypical seasonality,” Morning Consult economist John Leer concluded.
