With so many unknowns regarding COVID-19, the travel industry is scrambling to accommodate passengers in this constantly changing scenario.
Nancy McGehee is Professor and Department Head of the Hospitality and Tourism Management program at Pamplin College of Business at Virginia Tech. She says, “Some companies, and not all, I would say there are several, that are offering very generous cancellation or rebooking policies. But those that are hesitant to do that, I think are waiting until it comes closer to the actual time of the activity or the event.”
McGehee has been in touch with hotel and travel companies, as well as consulting firms, taking their pulse. She says their predictions are pretty somber. “I think a lot of that is being projected based on what we saw with the SARS (Severe Acute Respiratory Syndrome) outbreak in 2003. And unfortunately, what we saw and learned from, with 911. They're using those things to extrapolate because there is still is so much that's unknown.”
McGehee was at the Marriott Bonvoy Hotel company headquarters recently. She says its quarterly report for the last quarter of 2019 was strong, but this quarter it’s quite the opposite. Something around “25 million per month in lost fee revenues for Marriott alone. And that's just one, one company.”
Some projections suggest the airline industry could lose upwards of $100 billion, much of that due to a drop in the Chinese market, which determines the fate of so many other country’s economies around the world. The White House announced it’s considering tax relief for airline, travel and cruise industries hurt by the COVID-19 outbreak.
As for consumers who plan to travel, McGehee has this advice: “To really go with tried and true organizations. Companies you've worked with before, that you're comfortable with, perhaps you have a loyalty program with, because they're going to value you. Hospitality companies really put that word hospitality to work. They still want to have that customer ultimately.”
McGehee adds, not only are hospitality companies insured, most also keep a rainy-day fund. But that doesn’t mean we won’t see layoffs and other belt tightening in the industry.
You can find the latest updates from the Centers for Disease Control & Prevention HERE.
And for the National Institute of Health HERE.
***Editor's Note: Radio IQ is a service of Virginia Tech.