COVID-19 takes financial toll on travel and hospitality industries
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Marriott International will announce quarterly earnings after U.S. markets close Wednesday. Analysts will be watching for signs of how this and other companies in the travel business are managing the fallout from COVID-19.
Hilton has closed at least 150 hotels in China. Intercontinental Hotels Group reported similar numbers. And Marriott — with its more than 400 hotels there — is vulnerable too, according to Jan Freitag, senior vice president of lodging insights at STR.
“For the publicly traded companies who have exposure in China, obviously they are going to get probably pretty bad news going forward just because hotels are likely going to be closed,” Freitag said.
It’s not just companies in China feeling the strain. Adam Sacks, president of Tourism Economics, said that in the 2003 SARS outbreak, travel from China to the U.S. fell by 30% and took years to recover.
A similar decline now could reduce spending here by $10 billion in flights, lodging, retail and entertainment.
“The main difference is that China is such a bigger market now,” Sacks said. “In 2003, there were only about 200,000 visitors from China to the U.S. Last year, there were nearly 3 million — so the stakes are much, much higher.”
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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