The next six weeks could make or break the industry’s performance this summer as the spread of the coronavirus in Europe has seen demand take a “significant” hit.
Operators and agencies this week reported an abrupt slowdown in bookings and said customers were choosing to delay holidays.
Miles Morgan Travel chairman Miles Morgan said forward bookings were “noticeably down” and added: “The impact on cashflow will start to hit businesses in the next six weeks, with summer balances coming in 12 weeks before departure. That’s when people will make a decision on whether to walk away from their deposit so the situation will crystallise.”
The death toll from the virus stood at 3,131 globally on Tuesday, with 2,835 in China. Of more than 92,000 cases globally, more than 48,000 had recovered by Tuesday evening.
Northern Italy was the worst-affected region in Europe, with more than 2,000 cases and 79 deaths.
Airlines cancelled hundreds of flights, with BA, easyJet and Ryanair reporting a downturn in demand and no-shows at airports. Tui reported “weaker bookings” in the past week and said it was “reviewing” capacity.
John Hays, managing director of Hays Travel, said: “We could potentially be facing a major challenge.”
Alistair Rowland, chief retail officer for specialist business at The Midcounties Co-operative, noted a “significant” short-term impact, with a 20% drop in booking volumes last week. He said: “March is going to be rocky for the trade.”
Alan Bowen, advisor to the Association of Atol Companies, said the confirmation of six cases at the H10 Costa Adeje Palace hotel in Tenerife had been “the turning point”, adding: “The fear of being quarantined is making people wait until they book a holiday to see how it pans out. If they have not paid their final balance for Easter holidays, they will be wanting to cancel.”
Bowen said: “Business has really tailed off in the last two weeks, which means cashflow is not there.”
One agent, who asked not to be named, said: “It’s only going to get worse and we have at least another two months of this. You can’t give holidays away at present.”
Derek Moore, chairman of The Specialist Travel Association (Aito), said most operator members reported bookings had “slowed down”, adding: “No one has any idea how soon coronavirus will be brought under control. It’s a waiting game.”
A senior industry source said: “We saw a significant change last week. Across the board, people just stopped booking. There is a nervousness about the implications. If this continues it could be disastrous.”