Thanks to the global spread of coronavirus – officially known as the SARS-CoV-2 virus – inbound travel to the United States from foreign nations will drop 6% in the February-April time frame vs. the same period in 2019, according to a new projection from the U.S. Travel Association.
The 6% projected decline in foreign travel to this nation would be the biggest three-month decline since the Travel Association began issuing tracking what it calls the Travel Trends Index five years ago. And it would be the biggest since 2007-2008, when the global financial crisis drove a record drop in international travelers visiting the United States.
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“There is a lot of uncertainty around coronavirus, and it is pretty clear that it is having an effect on travel demand—not just from China, and not just internationally, but for domestic business and leisure travel as well,” said Roger Dow, the Travel Association’s CEO.
Last year inbound foreign travel added $256 billion to the U.S. economy. That suggests a quarterly total of between roughly $40 billion and $70 billion, depending the size of the seasonal fluctuation in travel to the U.S. during the late winter/early spring months and on estimates of how much foreign travel to the U.S. was expected to grow. Thus, a 6% decline in those expected revenues as a result of the global health scare would cost U.S. airlines, hotels, rental car companies, restaurants, tourist attractions and destinations and the overall economy between $2.5 billion and $4.25 in expected revenues that will not materialize.
In January there was little to no discernable effect on inbound foreign travel to the U.S. as a result of SARS-CoV-2/coronavirus, which causes the illness now known as COVID-19. In fact, overall travel in the United States grew about 3% in January vs. the same month in 2019. That’s largely because the virus’ spread and the enormity of its impact in China were not yet widely known beyond China’s borders.
But in the first half of February, as the virus became bigger and bigger news around the globe, Chinese carriers began cancelling thousands of flights – both international and domestic – a day. Similarly, many major carriers around the world began reducing or suspending their service to and from China.
And by the end of February, with more around four dozen nations reporting actual or suspected COVID-19 cases, carriers around the world were suspending hundreds more flights to and from destinations on all six populated continents. Additional service cutbacks are continuing this week as reports of COVID-19 cases from new locales are added daily.
So far, however, U.S. carriers have not begun reducing or canceling service on domestic routes. As of Tuesday, there were 60 known or suspected cases of COVID-19 in the United States. That includes three Americans who were repatriated to the U.S. after either testing positive for the illness while they were in China or who tested positive shortly after their return. According to news reports through Tuesday nine Americans, all of them with significant medical issues prior to being infected with the virus, have died as a result of COVID-19.
The Travel Association expects the negative economic impact on the United States to become much more noticeable – and felt – through the first half of this year and, depending on the course of the virus’ spread and the global response to fight it, perhaps longer. But the Travel Association said it did not yet have enough clear data to offer an economic impact projection beyond April.
“A big part of the coronavirus narrative is about whether it’s safe to travel,” Dow said. “But it’s important to keep in mind that the restrictions and warnings are highly specific to countries where there have been pronounced outbreaks,” Dow said. “Right now there is absolutely no official guidance that people need to be reconsidering travel in the U.S.”
Dow, whose travel promotion organization is a consortium of travel industry companies that also receives funding from Congress to promote the United States as a tourism destination for foreign travelers, emphasized Tuesday that there’s currently no reason for Americans planning to travel domestically for either business or leisure purposes this year to change their plans over concerns about the spread of the virus.
“Obviously the traveling public should be exercising caution just as they would for the average flu season,” he said. “But for the many of us who have upcoming plans to attend a convention or meeting or go on a family vacation, public health officials have repeatedly said there is no cause to alter those U.S.-based plans at the moment.”
The Travel Associations’ Travel Trends Index is compiled Oxford Economics, a research firm. It draws on data from online travel search and booking data, actual airline travel booking data, and hotel room booking data from STR, a research and analytics consulting firm that serves the lodging industry.
