Expert Insight



The negative impact of coronavirus (COVID – 19) on aviation, travel, tourism and hotel occupancy is undoubtedly enormous, whether in the countries classified as primarily infected or in the whole world. A number of implications has come into surface, while many others will be recognized by the second quarter of the year; at least before May.

Recently, the number of countries banning their citizens from travelling abroad to contain the infection has been accelerating dramatically, as currently in China. Similarly, the number of countries, preventing citizens of infected places from crossing borders, is increasing rapidly.

Generally, more than 90% of flight reservations are expected to be cancelled within the coming three or four weeks. As for China, all tourist group trips, whether domestic or foreign, were suspended since last January, 27.  Certainly, this will have direct implications on hotel reservations in most of the world countries that usually receive more than 170 million Chinese tourists every year.

On the other hand, major American airlines suspended their flights to China. “Delta Airlines”, for instance, suspended its flights till next April, 30. “American Airlines” announced more flight cancellations to China, whereas “United Airlines” suspended flights to Chinese big cities as from next February, 6 up to March, 28.

Meanwhile, more than 80% of hotel reservations in Venice, Italy, were cancelled a week ago, though Italy is one of the most prominent international tourist destinations. Furthermore, as death toll rose to 200 as a result of the virus, cancellations are expected to reach 100%.


Aviation and hotel reservations are totally affected by any global crisis. In my opinion, the current situation will cast its dark shadow on the whole world. Even the places that are still far from the virus, such as South America and South of Africa, will be also affected though at different levels. Besides, the ability of airlines or hotel companies to adapt with the decline of reservations varies due to several factors. If the company is already having troubles before the outbreak of the virus, it will not be able to handle cancellation of reservations. The British airlines “Flybe”, one of the major airlines in Europe, for example, totally collapsed few days ago due to reservation cancellations by the effect of coronavirus outbreak, as it had suffered a critical situation few months ago though responsible for more than 40% of domestic air flights in Britain.

However, companies which have previously confronted global crisis, such as virus outbreaks or capital markets crash, seem more experienced to deal with the implications of coronavirus. They are currently planning to adapt with the new reality and adjust to its negative implications in case that the virus is contained worldwide within the second half of the present year or in the next year. Yet, companies running international hotels as “Hilton”, “Intercontinental” and “Marriot” admitted losses amounting to millions up till now.

In other countries, such as Kuwait, which have limited infections, many hotel officials declared that reservation cancellations exceeded 80% and the hotel capacity decreased to less than 20%, (the annual average is usually 58%), although this is the high season period to visit Kuwait.

Some tourist and travel agencies declared that about 85% of the postpaid reservations, whether of hotels or flights, were cancelled, especially after the cancellation of all previous or new reservations during the vacation of the National Day during last week. Some of these agencies may be able to deal with the current impasse for a few days, at normal conditions. But some others will not be able to hold on if the present situation continues for many weeks, especially those suffering lately form competing electronic sites, services and applications.


 One of the recent forms of coronavirus impact on aviation and tourism sectors in our region is an announcement, made at the beginning of the week, postponing the “Arabian Travel Market” in Dubai, from April, 19 to June, 28, though being one of the biggest travel fairs in the region. The announcement came days after Germany had declared that the “International Tourism Bourse, Berlin” (ITB Berlin) was cancelled, though being the biggest tourism fair worldwide. We currently hope that the virus will be soon contained before “Dubai Expo 2020”, which includes achievements and projects of various countries and is scheduled to open next October for 171 days. Hundreds of millions of dollars have been spent on designing and constructing booths of the participating countries in this 5-year international event, which is expected to attract 11 million visitors. Every day that passes, without containing the virus, increases worries of both organizers and participants.

In terms of figures, I expect the international tourism sector to suffer its biggest decline since 2001 and, consequently, to slow the accelerating growth pace since 2009- following the world financial crises of 2008. Accordingly, the early global prospects, by WTO, which suggested 1.6 billion tourists worldwide in 2020, will not be fulfilled in the present year. The number of tourists in 2019 (1.5 billion tourists) grew by only 4% due to global economic slowdown, geopolitical conditions, and the ongoing Brexit (Britain’s exit from EU), whereas in 2017 and 2018 it grew by 7% and 6% respectively.

Certainly, the largest decline will be primarily recorded in East Asia and the Pacific, and it is so far expected to reach at least tens of millions. Early prospects suggested that this region will attract 297 million tourists in the present year.

All other destinations will also be negatively affected due to world fears from travelling to any country having deaths or infections by the virus. Moreover, the travel traffic will be almost paralyzed in a lot of countries for many coming weeks.


It is no longer surprising that estimates of losses by international reference bodies are increasing daily. In the last week of February, for example, the Air Transport Association (IATA) forecasted losses not exceeding $30 billion for airline and travel sectors. Then this number dramatically increased a week later (three days ago) to more than double, and is expected to increase to triple. According to “IATA”, losses may amount to $63 billion in case that the disease is globally contained. Yet, such losses will increase, if the coronavirus continues to spread, to be $113 billion during the present year.

Globally, some studies suggested that transport and aviation will be the most effected sectors worldwide by coronavirus, followed by tourism and entertainment sectors, then services, retail, industry and stock markets, while the pharmaceutical, telecom, e-commerce and gold sectors will be the most profitable.

In addition to losses, that will certainly increase by the decline of tourist traffic worldwide – as mentioned above, a number of specialized studies indicated expectations of 1.5% drop in international travel this year, recording its first decline since 2009 following the world financial crises. This means that travel traffic this year will be affected by a five-time decrease in the previous impact of “SARS’ virus in 2003. Certainly, China and its neighboring countries will be much more affected.

Substantially, data on losses and other impacts will increase, I believe, with the financial reports of March, which will be issued within two weeks by companies and associations of aviation, tourism and travel. So far, we are at least sure that the world will not enjoy the huge expenditure of Chinese tourists which amounts to more than $277 billion. This will not affect Chinese airlines and travel agencies only, but will have its impact on the facilities of tourism and hotels worldwide.

The effects will influence also the Gulf region which received in 2018 about 1.6 million tourists (KSA followed by UAE then Oman, Bahrain and Kuwait), while the number is expected to increase to 2.9 million Chinese tourists by 2022. Some believe that the Chinese expenditure on foreign tourism around the world will decrease at least $70 billion. But if the virus spreads for other months, global tourism revenues from China will decline even further. Most of the countries exporting foreign tourism, such as Europe and the US, will be less affected and vice versa.

Furthermore, the Gulf expenditure – including Kuwaiti expenditure – on foreign tourism and travel certainly started to decrease, and it is declining daily. If the return of Gulf and foreign flights between regional countries and Arab or foreign tourist destinations is delayed for a month, then the said amount of expenditure will decrease to hundreds of millions of dollars. Kuwait will be able to save a part of such expenditure, amounting to $16 billion in 2018, more than any other Gulf country, on the basis that it is still the least Gulf country to benefit from foreign tourism.

At the end of this comprehensive panorama regarding the global and regional impacts of coronavirus on tourism, aviation and travel sectors, we conclude that the concept of disaster in these sectors can be adopted so far only on a substantive and partial scale. It is restricted to deciding or delaying the time of the virus containment. If the early global outlook for these sectors has been false, in the sense that it will be reviewed within few weeks, the level of paralysis in these sectors will be determined only by the second half of the year, depending on the spread of the virus and its implications. Therefore, all possibilities are to be taken into consideration.         


You May Like Also