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Global hospitality industry reeling under coronavirus impact

by | 18 Feb 2020 | News

The coronavirus continues to hit the hospitality industry hard.

From temporary hotel closures in China by Hilton, Wyndham, IHG and Best Western, to the Mobile World Congress in Barcelona being cancelled, COVID 19 is hitting the hospitality industry hard.

Closure, cancellations and containment are hitting the international hospitality industry at the moment, as the coronavirus spreads beyond the confines of China and international brands attempt to stall the outbreak of the virus. We find out more about how the infection is affecting the global industry. 

From regional concern to global anxiety

The coronavirus has become more of a concern than originally thought, after the WHO moved to declare it a global health emergency, and figures for China, where the virus originated, are significantly higher than was once thought. Following the spread of the virus beyond borders to cruise ships, hospitals and potentially offices, the international hospitality industry has raced to contain the virus by shutting down hotels, cancelling events and blocking bookings online. Jan Freitag, a senior vice president with data research firm STR, spoke about the current iteration of the virus, saying, “This is not a regional phenomenon; this is a global phenomenon.” 

Hilton, IHG, Best Western and Wyndham close properties in China

Given the severity of the coronavirus and its spread, international hotel brands have scrambled to contain the infection so their customers or staff do not risk exposure. To this end, Hilton has closed 150 of its 225 hotels in China, meaning that approximately 30,000 rooms are now out of bounds. Christopher J. Nassetta, CEO of Hilton, said, “It goes without saying that the safety and well -being of our team members and our guests remain a paramount priority, as we continue to carefully monitor the situation.” 

Meanwhile, Wyndham has closed 70% of its Chinese hotels on a temporary basis, numbering about 1,000 properties across greater China. “The majority of the closures resulted from our owners and franchisees doing everything they could to protect their team members and prevent the spread of the virus,” said Wyndham CEO Geoff Ballotti. 

Best Western has followed suit by closing a number of hotels in China, and home-sharing giant Airbnb has also blocked bookings through till the end of April in its properties in Beijing, China. 

The InterContinental Hotels Group (IHG) chief executive Keith Barr said it had shut some 170 of its 470 hotels in China.

Economic woes for China amid coronavirus spread

The spread of the coronavirus also has an economic impact, not just for China, but also for the rest of the globe, which relies heavily on trade with China and manufacturing processes using products made in China and exported around the globe. The supply chain is being disrupted, while tourism is also taking a hit. Airlines are cancelling flights to and from China, and estimates are being put at around 25 million fewer departures from China this year because of coronavirus.

While the virus appears to be mostly concentrated in Asia, there are naturally fears that it will spread more globally if travel from China is facilitated. Apple, for one, has said it cannot guarantee iphone deliveries given how COVID 19 has hit factories in China.

Cancellation of MWC hits Barcelona hotel bookings hard

The Mobile World Congress, a tech conference in Barcelona that has been held in the city every year since 2006, was cancelled due to travel concerns over the coronavirus outbreak. This large congress would have brought huge numbers of visitors to the already popular city of Barcelona, and hotel’s are bearing the brunt of the event’s cancellation with Forward STAR, STR’s future demand benchmarking solution, reporting that hotel bookings in the city are down 25% since the cancellation of the conference was announced.

“These numbers provide a strong indication of the bookings impact for hotels in Barcelona,” said Steven Cote, STR’s Product Manager for Forward STAR. “Given that 100,000 delegates were expected to attend the Mobile World Congress, the effects will be significant for hoteliers in reaching their performance goals for not only this quarter, but the entire year.”

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