What Effect Will the Coronavirus Have on the Hospitality Industry?

By Katie Davin, CHSE, Associate Professor at Johnson & Wales University – Providence, and member of HSMAI’s Sales Advisory Board

According to the World Health Organization as of Feb. 27, there are more than 81,000 cases of coronavirus worldwide, with nearly 900 being confirmed in the previous 24 hours. Close to 3,000 people have died from the virus, which originated in China’s Wuhan Province in December.

The impacts have been felt worldwide, with travel bans enacted and some businesses shutting down as the virus has progressed to 37 countries, with the largest number of cases in China, South Korea, Italy, Japan, and Iran. The United States has reported 53 cases.

HSMAI’s Sales Advisory Board (SAB) discussed the impact that the coronavirus has had on their properties as well as their predictions for the entire hospitality industry on a call on Feb 12. While the virus has continued to spread, its effects changing and multiplying since then, SAB members offered a valuable take on what hoteliers can do to prepare for potential impacts:

1. Uncertainty is the name of the game: The one thing that everyone seemed to agree on is that nobody really knows what is going to happen. Everyone on the SAB call has had a different experience and heard different opinions on how long the virus is projected to be a disturbance. One member said that while they heard that the SARS virus could be a predictor of the coronavirus, the spread of the two has been very different. Another member said: “What I’ve learned is that nobody really knows.”

2. The view from Europe: One SAB member recently travelled to Europe, where as of Feb. 27 the coronavirus has been in Austria, Belgium, Croatia, Finland, France, Germany, Greece, North Macedonia, Russia, Spain, Sweden, Switzerland, the United Kingdom, and — most notably — Italy. “I saw half-empty airplanes, completely empty department stores, and visibly less activity,” the member said. “Parts of the world are still strong, but some parts of the world we have closed hotels. It’s a daily moving target, but I was pretty stunned just going back and forth to Europe last week that I saw such dramatic declines.”

“We’re seeing and hearing business meetings all over the world being cancelled,” another member said. “It has some very big, very serious impacts.”

3. Cancellations and more: In the United States and abroad, hoteliers have been feeling those impacts. One SAB member who has hotels in Alaska and on the West Coast has seen an uptake in cancellations from guests as well as from airline crews who would be coming from other countries. Another member said they had their West Coast hotels look at upcoming group bookings and flag groups with a high number of travelers out of China, which may be likely to cancel, in order to adjust their forecasts accordingly.

Several SAB members said they were surprised they haven’t seen as many cancellations as expected thus far. “But we’re keeping a very close watch,” a member said.

Beyond direct cancellations from people affected by the coronavirus, the outbreak could have chain impacts down the line. “There are lots of salespeople in many industries out on the road trying to sell goods and services, many of which originate from China,” one SAB member said. “If those salespeople don’t have inventory to sell, that could be an interesting impact on business travel.”

4. Finding other business: Another member recommended finding U.S.-based business that is less likely to be disrupted. “Now is the time to emphasize those relationships and be prepared to transition as the situation changes in China,” they said. “Find those businesses, even if it’s U.S. government business, that can carry you in the short term.”

To minimize the spread of the virus, the WHO recommends washing hands frequently, maintaining space from anyone who is coughing or sneezing, avoid touching your eyes, nose, and mouth, and seeking medical care early if you have a fever, cough, and difficulty breathing.

Visit the HSMAI Global Coronavirus Resources area for additional insights

Categories: Sales
Insight Type: Articles