As the novel coronavirus outbreak further grips China, the vast majority of transient business travel between China and the United States has been scuttled, for now. For the business travel industry, some focus has turned to the virus' effect on the staging of and attendance at meetings and conventions.
The coronavirus, the respiratory illness formally dubbed COVID-19 by the World Health Organization, has infected more than 60,000 people in dozens of countries—though the vast majority are in mainland China—and killed more than 1,300.
There is no direct airline service to China from the United States and many other countries, and the U.S. government has banned most foreign travelers who have recently visited mainland China.
Dozens of airlines throughout the world, including American Airlines, Delta Air Lines, United Airlines, Air France, British Airways and Lufthansa, have suspended all flights to mainland China at least through the end of this month and in many cases longer. Some have also suspended service to Hong Kong. Most hotel chains have waived, updated or extended at least through the end of February their cancellation and change policies for the Greater China region. The Global Business Travel Association recently surveyed its buyer members to assess the ways in which they were responding to the outbreak (see charts). A number of industry sources are beginning to paint a stark picture.
According to Airlines Reporting Corp., airline sales transactions for intra-China routes as well as inbound and outbound international during the Jan. 29 to Feb. 4 period collectively declined 47 percent year over year, while exchanges increased 59 percent and cancellations increased 604 percent. That data, the most recent available, is derived from Direct Data Solutions, a global air transaction dataset managed by ARC and the International Air Transport Association.
Meetings Hit Hard
The specific methods by which the coronavirus can be spread isn't fully known, according to the U.S. Centers for Disease Control and Prevention, although it can be spread person-to-person. Since the incubation period for the disease can range from two to 14 days, according to the CDC, some companies have expressed concern about the effect of large gatherings of international attendees, some of whom may have visited China or come into contact with someone who has in that incubation period.
"Avoiding large gatherings of people is a basic protocol for reducing the spread of disease," said Riskline Eurasia operations manager Emanuele Scansani.
As such, meetings and convention organizers are wrestling with the decision of whether to go forward with scheduled events that include global attendees, and corporations weigh their attendance.
Executive Travel founder and chairman Steve Glenn said "people were wearing face masks everywhere" at a convention he attended in Frankfurt earlier this month. "Not many people in Europe have been infected yet by the coronavirus but its effect can already be seen in many ways here," he said. "Attendance at the [convention] was down an estimated 25 percent by some exhibitors. I think the world economy will take a pretty big hit for the first half of 2020 from the virus."
Meetings industry leaders urged dispassionate, informed analysis of the potential health risks for attendees before taking action, with clear and consistent communications of the decisions made.
"Paramount is the need to ensure that event professionals are making informed decisions related to travel and meetings that prioritise the health and safety of participants and workers, and support communities at risk," said Amy Calvert, CEO of the meetings and conventions industry umbrella group Events Industry Council, in a statement. "Should your plans find you in a position to cancel travel or meetings and events, consider it a postponement, and find other ways to support the communities that have been affected. In doing so, make firm plans to return, and be transparent and timely with your communications to partners and event stakeholders."
The Professional Convention Management Association earlier this month called coronavirus' impact on business events "varied," noting that "some business events will continue as scheduled … though maybe with fewer participants. Other business events may have been canceled or postponed."
That summation proved too hasty.
PCMA had cited the Feb. 24-27 Mobile World Congress in Barcelona staged by mobile network operators industry group GSM Association, as an example of an event still scheduled, but it too was canceled on Feb. 12.
GSMA on its website cited "the global concern regarding the coronavirus outbreak, travel concern and other circumstances [which] make it impossible for the GSMA to hold the event."
Companies including Amazon, Ericsson, Intel, LG, Nokia, Nvidia and Sony had pulled out of the event. "As one of the largest exhibitors, Ericsson has thousands of visitors in its hall each day and even if the risk is low, the company cannot guarantee the health and safety of its employees and visitors," Ericsson noted in a statement announcing its pullout.
What Comes Next?
While the coronavirus has been spread by people who have visited China, the fact remains that only about 2 percent of cases have been diagnosed outside of that country. As such, the World Travel & Tourism Council, while lauding travel suppliers and governments for working together to help contain the virus' spread, called for a reasoned response and for respect for travelers from China
"We must not stigmatize," WTTC president and CEO Gloria Guevara said in a statement. "The coronavirus will not be solved by singling out individuals or groups from any country, such as China or those in other parts of Asia."
WTTC also "urged a continuing closer partnership between both [public and private] sectors to help curtail travel in affected areas and improve education about the virus' transmission to guard against panic measures. Closer public and private partnerships will also help aid the sector's recovery once the spread of the virus begins to subside."
Analysis from The Boyd Group isn't optimistic about the industry's ability to pull together. Its model shows China airports facing a 30 percent drop in passengers in 2020 due to the epidemic, dropping from 1.4 billion passengers in 2019 to a forecast 945 million this year. "Even before this epidemic, annual [air traffic] growth rates had been expected to shrink to 8 percent or less… Now traffic will be in a free fall at least through 2020," noted Group president Michael Boyd, adding that his company's forecast assumed containment of the virus.
The firm also predicted a tough recovery for the local airline industry—and potentially major changes in the industry as a result of the losses. "Consolidation is in the cards, possibly some shutdowns," he said, noting that the situation in China is very different than it was when SARS hit in 2002. "Back then, total China airport traffic was less than 20 percent of that today, and the rapid spread of coronavirus across all parts of China is a fundamentally different situation. Traffic will not bounce back that quickly."