Mar 6, 2020 - Economy & Business

The coronavirus is causing widespread U.S. price cuts

Illustration: Aïda Amer/Axios

Having already hit supply chains and led to the widespread cancellation of large gatherings and events, the COVID-19 outbreak is now causing a repricing on tourism and travel globally, as airlines, hotels and travel operators see major declines in bookings and revenue.

Why it matters: China's record low readings in February for both manufacturing and services could serve as a warning of what's to come for parts of Asia, Europe, and even the U.S.

  • However, China is also where the best news about the virus can now be found.

Driving the news: Southwest, United, and JetBlue have all warned that the virus will have a serious impact on profits as tourists cut back travel and companies cancel events.

  • The price of tickets is plunging as airlines attempt to offload tickets, with Bloomberg reporting that flights from New York to Miami were being sold for as low as $51.

State of play: "This is not a drill," the World Health Organization said Thursday. "This is a time for pulling out all the stops,"

  • "Countries have been planning for scenarios like this for decades. Now is the time to act on those plans."

Scientists are still trying to determine how the virus is spreading and the best ways to combat it, Maria Van Kerkhove, head of WHO’s emerging diseases and zoonoses unit, said.

  • “It’s still early days, it’s still a few weeks into this outbreak."
  • “We’re learning something new every day about this virus.”

Between the lines: The worst-hit industry may be hotels, which are marking down prices and facing what may be the worst year since the financial crisis, WSJ reports.

  • Marriott's shares have fallen by about twice as much as the S&P 500's since Feb. 19, with major hoteliers Hilton and Hyatt also badly lagging the index.

On the bright side: The number of new cases confirmed in China has consistently declined in recent days to zero outside of the Hubei province, and the country's lowest levels since the start of the outbreak. Stocks have climbed all the way back from their lows in a matter of weeks.

  • The trajectory of U.S. equities appears to be following China, which sold off immediately upon opening after the Lunar New Year holiday and erased all of 2019's gains while U.S. indexes continued to touch record highs.
  • The blue-chip China CSI 300 Index rose to a two-year high Thursday, as the country's massive stimulus efforts have helped provide a V-shaped recovery.

Yes, but: There is increasing doubt about the accuracy of China's reporting.

Meanwhile in Europe:

Expand chart
Reproduced from STR; Chart: Axios Visuals

Hotel bookings in Italy and Milan have fallen off a cliff as travelers cancel trips en masse, data from STR showed.

The details: The country has canceled major events, including Milan's fashion week and its carnival celebration. The festival was also canceled in Athens, leading to substantial hotel declines there as well.

Also: Travel analytics company ForwardKeys found that flight bookings to Italy fell by nearly 139% in the final week of February, compared with a year ago, the Washington Post reported. The company said that means the number of cancellations exceeded the number of new bookings.

  • “We have some people who are choosing to cancel going to Italy right now,” Jennifer Wilson-Buttigieg, co-owner of Valerie Wilson Travel, told the Post. “What we’re trying to message in reaction to canceling is, ‘Let’s defer, let’s postpone.’”

Go deeper: U.S. hospitals begin preparing for the coronavirus

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China's Hubei province to lift travel ban as coronavirus threat eases

Staff members conduct disinfection on the subway train in Wuhan on Monday. Photo: Xinhua/Xiao Yijiu via Getty Images

Health officials in China said Tuesday they will soon allow transportation into and out of Hubei province, where the novel coronavirus was discovered.

Why it matters: The announcement, effective on April 8 for virus epicenter Wuhan and this Thursday elsewhere in the province, essentially ends the mass quarantine of residents who've been on lockdown since January.

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Illustration: Sarah Grillo/Axios

Not since the aftermath of 9/11 has there been such a fear of flying.

Why it matters: The novel coronavirus has the airline industry bracing for the worst downturn since the Great Recession. Even though the government says it's safe to fly domestically, the drumbeat of news about COVID-19 has cautious employers stifling business travel and worried families rethinking their summer vacation plans.

Go deeperArrowMar 6, 2020 - Health

Hotel industry seeks $150 billion coronavirus relief

The front desk inside the JW Marriott hotel. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)

The hotel industry is asking the federal government for $150 billion in emergency aid, mostly to keep employees on the payroll until the novel coronavirus threat subsides and travelers are ready to hit the road again.

Why it matters: The virus outbreak has already hurt the hotel industry more than the Sept. 11 terrorist attacks and the Great Recession combined, an industry trade group says. Without immediate help, people at the lower rungs of the economic ladder will suffer the most.