Covid-19 briefing

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- ECONOMIC IMPACT -

Latest update: 17 February

The Japanese economy expanded by 3% (YoY) in Q4 2020. However, economic growth for the full year 2020 shrank by 4.8% according to the Cabinet Office.

The IMF projects global economic growth at 5.5% for 2021, an upward revision from the 5.2% rise estimated in October 2020.

11.5%

The IMF forecasts India’s economic growth at 11.5% in 2021, which would make it the only major economy to post a double-digit growth.

7%

S&P Ratings forecasts the economic growth rate of China at 7% in 2021, following a 2.3% growth recorded in 2020.

Impact of Covid-19 on Employment

- SECTOR IMPACT: TRAVEL AND TOURISM -

Latest update: 3 March

Transport market impact

$3.1bn

Southwest Airlines announced a net loss of $3.1bn, compared to a net profit of $2.3bn in 2019. 

$9.5bn

American Airlines announced a full-year net loss of $9.5bn for 2020. 

Travel enters a new era

Concerns over new variants that may be more contagious have led to the re-imposition of stringent travel restrictions and quarantine requirements in many parts of the world, most notably in Europe.


In the US, the new Biden administration has reintroduced travel restrictions that were lifted towards the end of the Trump administration. This does little to inspire confidence in booking travel.


In response, companies are adapting their operations Airlines are once again reducing flight schedules, while hotels continue to work on making themselves Covid-19 secure. Tourism boards have, in many cases, been forced to shift their focus towards attracting people from their home (domestic) market.


As results announcement season approaches, analysts are bracing themselves for large losses and calls for caution from CEOs. However, several countries are starting to make notable strides in terms of vaccine rollout programmes and this is cause for cautious optimism as the year progresses.

Key Travel And Tourism  developments

Airlines

The parent company of Emirates Airline recorded its first loss in more than 30 years, reporting a $3.8bn loss for the six months to the end of September.


This is not an outlier. Avianca filed for Chapter 11 bankruptcy protection and Virgin Australia was bought by Bain Capital after similar proceedings The likes of Lufthansa and Air France KLM had to seek government support Numerous airlines have scaled back flight plans as demand remains severely reduced.


Cruises

Carnival Corporation has extended the suspension of US departures until 30 April 2021 while Royal Caribbean has chosen to suspend its global sailings until 31 May.


Norwegian Cruise Line has confirmed that it has also suspended all cruises embarking until April 2021 There is currently little sign of light in what has been a very long and very dark tunnel for the cruise industry.


Intermediaries

Intermediaries are beholden to what happens in other industries as they are the link between providers and consumers.


Once travel starts to return, business will pick up as people see them as a necessary, helpful link Collaboration is on the rise, with Booking and TUI forming the most notable partnership so far.


Some players have struggled to weather the storm and STA Travel ceased trading, while Hays Travel announced in January that it is closing 89 of its 535 stores.

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