Major companies are beginning to cancel conferences and travel plans within the United States due to the coronavirus, which analysts warn will have cascading impacts on the country’s hotels, airlines and convention centers.
International travel — particularly to Asia — has so far been the hardest-hit part of the industry, though analysts say that could soon change as fears of the coronavirus spread to Europe and North America. Hotels around the country have begun reporting a rise in group cancellations. Some air carriers, including Alaska Airlines and JetBlue Airways, are doing away with cancellation fees as jittery travelers rethink their plans.
“The cancellations are starting to move toward North America,” said Scott Solombrino, executive director of the Global Business Travel Association, which estimates that the slowdown in global travel has already cost American businesses $7 billion this year. “Obviously the concern is that this will have a long-term impact on the U.S. economy.”
Analysts said wide-scale cancellations — which so far have been concentrated in large cities such as New York, Washington and Los Angeles — are starting to hit smaller U.S. cities, as companies change their internal travel policies.
Workday called off a sales conference in Orlando scheduled for next week, while Google and Facebook canceled multiple events in California between March and May. And Amazon this week told employees to put off “nonessential travel” in the United States, though it did not offer details on what types of trips would qualify. (Jeff Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
Mounting cancellations, analysts said, are likely to have ripple effects throughout the economy, particularly for upscale hotels that rely on group bookings for about one-third of their sales, according to Jan Freitag, senior vice president of lodging insights for STR, a hospitality research firm.
“The most noticeable impact so far has been in group travel, with large conferences around the world being canceled,” he said. “These large group conferences take years and years to plan. If they don’t happen now, there is a good chance they won’t happen at all.”