US travel industry bracing for swine flu
With flu season nearing, the US travel industry is holding its breath in hopes the swine flu virus will be minimal. But already the costs of swine flu or H1N1 are adding up with hotels, airlines and cruise ships particularly hard-hit:
• Delta Air lines estimated the flu scare cost the carrier up to $150 million in the second quarter alone.
• Continental Airlines estimated a $50 million H1N1-related revenue hit in the quarter.
• Marriott International Inc. said the bug impacted markets across the globe, but particularly in Mexico. “Occupancy at our 17 hotels there (Mexico) in May were as low as the mid-teens with RevPAR (revenue per available room) down 80 percent,” Marriott CFO Carl Berquist told analysts.
• Miami-based Royal Caribbean JetBlue Airways Corp. said H1N1 affected demand across its network, and reduced revenue to Mexico in the second quarter by $5 million.
• Some cities reported convention attendance, in general, is off 10 percent to 15 percent mostly because of the economy. But at least a few hoteliers say a small number of certain overseas guests opted out of international conventions because of flu concerns.
The losses were mostly attributed to overseas markets such as Mexico, South America, the Caribbean and Asia. China and other countries were also impacted as groups cancelled and bookings slowed.
“We expect to see the lingering effects from H1N1 in Asia well into the fourth quarter for an estimated full-year impact on revenue of roughly $250 million,” Delta President Ed Bastian told analysts.
Industry leaders are working to get out front with the message that the bug has thus far been a non-factor for US destinations, and that the industry is watching and is prepared to react in case the situation worsens, reported the Atlanta Business Journal.
“My gut feeling is it will be a mild, non-event — at least we hope so,” said Roger Dow, president and CEO of the US Travel Association.
Last June, the World Health Organization classified H1N1 as a pandemic because of its rate of spread, not severity. As of the end of July, nearly 44,000 cases of the virus have been confirmed in the US, and it is the attributed cause of 302 deaths, according to wire services.
The numbers pale in comparison to the typical flu. Greater than 200,000 people are hospitalized because of flu-related complications, and upward of 36,000 typically infirm or elderly patients die each year.
If fears of H1N1 sound familiar, it’s because the industry has been here before. In 2002-2003, the industry, particularly in Asia, was severely harmed by SARS, or the avian flu, following the 2001 recession and terrorist attacks.
by David Wilkening
David
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