GBTA Poll: Coronavirus Could Cost Business Travel Industry $46.6 Billion Per Month

Travel restrictions and cancellations that have come as a result of the coronavirus outbreak could potentially cost the business travel industry $46.6 billion per month, according to a newly released member poll from the Global Business Travel Association. That equates to $559.7 billion for the year, which is 37 percent of what the organization projected would be spent globally by the industry in 2020.

The results come from a lightning poll conducted by GBTA on Tuesday, to which 401 companies responded.

The outbreak has already had a significant effect on meetings, as 98 percent of respondents have had to make cancellations. Nearly two-thirds (65 percent) of companies have canceled at least a "few" meetings or events, while almost one-fifth (18 percent) have canceled "many" and 25 percent have canceled "some" events. The numbers are similar for companies that have had to postpone gatherings: Two-thirds (66 percent) have postponed at least a few events and 17 percent have postponed many.

These changes clearly have a cost: Nearly one-quarter of respondents (24 percent) said these cancellations are having a significant impact on company revenues. An additional one-third (31 percent) said the impact is moderate, while just 14 percent noted the coronavirus has had no impact on revenues. Airlines and hospitality providers are among the most affected thus far.

GBTA estimated the overall financial impact based on this year's forecasted revenue from the annual Business Travel Index and by taking into account the percentage of canceled trips and meetings to specific geographic regions.

"It is clear that the coronavirus is having a significant – and potentially very costly – effect on our members, their companies and on the overall business travel industry," said GBTA COO and executive director Scott Solombrino. "It is fundamentally affecting the way many companies are now doing business. If this turns into a global pandemic, the industry may well lose billions of dollars – an impact that will have negative ramifications for the entire global economy.”

Whether the outbreak becomes a global pandemic remains to be seen, as cases in China have already plateaued, with the rate of new infections gradually decreasing. Needless to say, there is a great deal of uncertainty about the potential spread outside of China.

Of the GBTA poll respondents who said they have canceled or suspended business travel due to the outbreak, more than half (54 percent) are unsure about when they expect travel to ramp back up. Nearly one-third (31 percent) expect travel to resume in the next three months, although 14 percent said they expect delays to last up to six months.

Not surprisingly, travel to China has been most affected. Ninety-five percent of respondents said their companies have canceled or suspended either most or all business trips to China. Nearly three-quarters (73 percent) said the same about Hong Kong travel, while more than half (54 percent) reported those measures for Taiwan. Forty-five percent of companies have canceled or suspended travel to other Asian Pacific countries.

A substantial number of respondents (23 percent) said their companies have canceled or suspended at least some trips to European countries.

Many companies are re-evaluating their travel policies in light of the outbreak: Forty-three percent said their company has instituted new trip-approval procedures, and more than half (51 percent) said they have modified travel safety and security features in their programs. "Our industry’s first priority is the health and safety of the business traveler," Solombrino added, "and our members are being appropriately cautious and proactive in their approach to the situation."