. Assessing the Risk of the Coronavirus Pandemic and its Impact on Travel and Events | Northstar Meetings Group

Assessing the Risk of the Coronavirus Pandemic and its Impact on Travel and Events

Risk-management experts from WorldAware discuss navigating the COVID-19 outbreak and the prospects of recovery.

WorldAware-Experts-Coronavirus-Travel-Events

Coronavirus and Meetings
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As the coronavirus outbreak worsens and the number of cases climbs higher each day, uncertainty hangs in the air. The travel industry has been brought to a screeching halt, businesses across the nation are struggling to survive and meeting planners everywhere are wondering when it will be safe to reschedule their events. 

For insight into these issues and more, Northstar Meetings Group consulted WorldAware, a risk management company that has been issuing COVID-19 alerts to its clients since December 31. 

WorldAware president and founder Bruce McIndoe shared his thoughts on the outbreak, which has been declared a global pandemic by the World Health Organization. Brendan O’Reilly, intelligence analyst for the Asia-Pacific region, and Ed Daly, editor-in-chief of WorldAware’s global intelligence division, also chimed in on the crisis and its expected economic impact.

When do you expect the outbreak to subside?
McIndoe: Unfortunately, no one has the data or knowledge about the virus to make any assessment of the severity or duration of this event. From the data provided by China, which has moderate to low credibility, the infection rate is declining -- more people are recovering than getting infected. If accurate, that is positive news and implies that the outbreak is plateauing there.

How does this coronavirus outbreak compare in terms of severity to other alerts issued by WorldAware?
Daly: The alerts we’ve issued related to coronavirus reflect the full spectrum of our severity levels. We use three levels (informational, warning and critical) to convey the relevant threats in a given location for health, physical security and/or business continuity.

The severity levels help clients quickly understand how they should handle the intelligence. An information alert says "get this on your radar,"  a warning alert says "prepare for this likely threat," and a critical alert says "activate your plan or respond now" depending on whether the threat is imminent or not.

Given the varying degrees of these threats when it comes to coronavirus, we’ve used all three severity levels as required. We will continue to provide alerts as long as the phenomenon requires.

What are you advising clients with respect to duty of care and their meetings and travel?

Bruce-McIndoe-WorldAware-Coronavirus-Experts
Bruce McIndoe, president and founder, WorldAware

McIndoe: Companies do have a duty of care around their employees’ health and safety. Most of the companies we work with are being prudent but cautious at this point. They are pulling back to only essential travel and restricting travel to areas with major outbreaks. However, some of our major clients have completely shut down travel and will monitor the situation on a day-to-day basis before bringing the travel program back online. 
 
Do you have any long-term projections on how it will affect the meetings and travel industry? 
O’Reilly: Based on what we've seen develop in China, South Korea, Italy and Iran, travel, tourism and other components of the service sector are likely to see significantly reduced revenue in countries that experience widespread COVID-19 outbreaks. In terms of a potential return to pre-outbreak economic conditions, there are too many unknown factors to make a prognosis on exactly what measures will be necessary to contain the virus in areas where significant spread has already occurred — much less any potential return to normality. 

What we have seen is that the apparent Chinese success in controlling the virus came at the cost of severe restrictions on travel and normal economic activity. Chinese officials continue to impose extremely strict movement controls in Hubei Province, and schools remain closed nationwide. Beyond these governmental controls, public demand for travel has been hit hard in China and other affected countries. Similar reductions in demand for travel are likely to occur in any country that experiences significant outbreaks.

Once the virus is contained, how long will it take for the industry to get back to normal?
McIndoe: No one has a crystal ball around this event. We are already seeing a major impact on the meeting industry, with conferences being cancelled or rescheduled and the direct and indirect revenue to the producer and host city lost forever. This will continue until more is known about the virus, or until the rate of reported infections diminishes significantly. Because little is known about the specific characteristics of COVID-19, the timeline of when it will be contained and how long it will take to recover are also not known at this point.

But we can look at past health emergencies for some idea of the recovery time. When the SARS outbreak impacted China’s hotel industry in 2003, it took a full year to get back to pre-SARS levels -- although it is important to note that the hotel industry in China is 50 times bigger now than it was in 2003. 

Airlines, on the other hand, recovered in about six months from the outbreak. However, most analysts agree that it will take much longer to recover from COVID-19, given the loss of economic activity that will need to recover to drive traffic.