Booking Holdings Inc. gave a bleak outlook for the first quarter due to the spreading coronavirus that has put a damper on global travel.
The Norwalk, Connecticut-based online travel operator said room nights booked would drop 5% to 10% in the first quarter. Analysts were looking for an increase of 5%, having already lowered their expectations from earlier projections of 8% growth in mid-January. The company also said revenue would decline as much as 7% in the current period from a year earlier.
“The coronavirus has had a significant and negative impact across our business during the first quarter,” the company said in a statement Wednesday.
Booking has seen an increase in cancellations, a reduction in new bookings and pressure on average daily rates from the virus, the company’s Chief Financial Officer David Goulden said on the earnings call. “As you will know, it’s not possible to predict where and to what degree outbreaks of the coronavirus will disrupt travel patterns,” he added. Booking expects growth declines will continue through March.
The Covid-19 virus, which is on track to becoming a pandemic, sent the stock market tumbling 6% over two days earlier this week, and the travel sector is among those worst affected. Airlines have halted flights, hundreds of hotels have been shuttered and tourism reports estimate billions of dollars in visitor spending will be lost this year.
The virus was first reported in China, but has since spread across Asia and into Europe and the Middle East. Its scale and spread has already dwarfed the SARS outbreak and health officials in the U.S. are bracing for an outbreak at home.
Booking shares have dropped 19% this year and rival Expedia Group Inc., which has less direct exposure to China, has shed about 6%. Booking slid 2.4% in extended trading after the report.
China is by far the world’s largest source of travel, with more international departures than any other country, said Nicholas Wyatt, head of research and analysis for travel and tourism at GlobalData. “This is an extremely difficult thing to put a number on because we don’t know how long it’s going to go on for, how long restrictions will be in place for or how long it will take for consumer confidence to return,” Wyatt said.
More than 20% of Booking’s room nights were generated in the Asia-Pacific region last year, according to Cowen & Co. Kevin Kopelman, an analyst at the firm, said he expects “the whole year to be impacted.”
But it’s not just China. Booking is also “heavily exposed to travel disruptions in Europe, where it has a room-night exposure of over 50%, while in China it’s about 15%,” through its partnership with Trip.com and ownership of Agoda, according to Bloomberg Intelligence analyst Rik Stevens.
A recent report from consulting firm Tourism Economics estimates the U.S. will lose 1.6 million visitors from China as a result of the coronavirus, a 28% drop for 2020.
In the fourth quarter, before the virus erupted, Booking did better than expected. The company, formerly known as Priceline, reported revenue of $3.34 billion, topping the $3.27 billion analysts were projecting. Room nights booked grew by 12% in the period, the company said in a statement, compared with the average analyst projection for an increase of of 9.47%. Profit excluding some costs was $23.30 a share, also better than forecasts.
Aside from the virus, Booking is also being squeezed by Alphabet Inc.’s Google and home-share startup Airbnb Inc.
Last year, Google redesigned its hotel search function which pushed online travel companies down in search results and means they are no longer getting as many free clicks from travelers. Earlier this month, Expedia Chairman Barry Diller said Google was an “existential” threat to online travel agents.
Airbnb also is a formidable competitor as the dominant player in the alternative accommodation market, forcing Booking to pumping resources into its vacation rentals segment to keep up. This is the fastest growing part of its business and now makes up 20% of total revenue. Booking, which is most well-known in Europe, has been running brand campaigns in the U.S. to drive customers toward its non-hotel listings.
Donald C. C. Stephens Jr., Managing Director of HVS Orlando Consulting & Valuation has produced a comprehensive 18 page report on the state of Central Florida's hotel sector.
The report covers: -
Consumer Spending Will Continue to Support Economic Growth Through First Half
The Conference Board Consumer Confidence Index® improved slightly in February, following an increase in January. The Index now stands at 130.7 (1985=100), up from 130.4 in January. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 173.9 to 165.1. However, the Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 101.4 last month to 107.8 this month.
“Consumer confidence improved slightly in February, following an increase in January,” said Lynn Franco, Senior Director of Economic Indicators. “Despite the decline in the Present Situation Index, consumers continue to view current conditions quite favorably. Consumers’ short-term expectations improved, and when coupled with solid employment growth, should be enough to continue to support spending and economic growth in the near term.”
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was February 13.
Consumers’ assessment of current conditions was less favorable in February. Those claiming business conditions are “good” declined from 40.0 percent to 38.6 percent, while those claiming business conditions are “bad” increased, from 10.4 percent to 11.9 percent. Consumers’ assessment of the job market also moderated from last month. Those saying jobs are “plentiful” decreased from 47.2 percent to 44.6 percent, while those claiming jobs are “hard to get” increased from 11.9 percent to 14.8 percent.
Consumers were more optimistic about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months increased from 18.4 percent to 20.4 percent, while those expecting business conditions will worsen declined, from 8.6 percent to 7.4 percent.
Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs declined slightly from 16.5 percent to 16.2 percent, but those anticipating fewer jobs in the months ahead also decreased, from 12.9 percent to 11.1 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase rose from 21.6 percent to 22.0 percent, while the proportion expecting a decrease declined from 8.0 percent to 6.7 percent.
Source: February 2020 Consumer Confidence Survey®
The Conference Board / Release #6157
The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website:
About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.
Figures collated by the Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) have revealed that the number of international visitors coming to the UAE capital in 2019 is estimated to have reached 11.35 million. This number includes 2.83 million overnight and 8.53 million same day visitors and is a 10.5% increase over 2018.
The final figures include official international hotel guests, plus estimates for overnight visitors from overseas staying with friends or relatives and an estimate for the number of same-day international visitors.
DCT Abu Dhabi’s official 2019 hotel figures also reveal that Abu Dhabi’s 168 hotels and hotel apartments posted the highest number of guests - to date (5.14 million) of which 3.66 million were international guests, with robust growth across key revenue metrics including Total Revenues, Average Room Rate (ARR) and Revenue Per Available Room (RevPAR). Abu Dhabi has a total of 27,100 hotel rooms and 5,700 rooms in apartment hotels.
The Hotel Guest numbers represented an increase of 2.1% over the previous year, whilst Hotel Occupancy was up 1.6% (to a rate of 73%), Average Length of Stay for 2019 was up 1.8% (to 2.6 nights) and Total Revenues were up an impressive 6.6% to AED 5.8 billion (US$1.57 billion) ADR metrics were up 4.7% and RevPAR also increased across the year by 6.4%.
India, China, the UK and the USA remained the top four non-UAE source markets for hotel guests, with Russia, Ukraine, South Korea and Bahrain the fastest growing markets between 2017 and 2019. The Indian market performed especially well, with an 8.2% increase over 2018 – with more than 450,000 hotel guests arriving - and the USA posting a 5.1% increase over the same time period.
The 2020s could easily become ‘the decade of sustainability’. While more companies pledge to help combat climate change, travelers are becoming increasingly savvy on who and what is negatively affecting the planet. With this in mind, STR’s Tourism Consumer Insights department surveyed more than 1,000 active travelers in January 2020 and evaluated their thoughts and behavior towards sustainability in the tourism industry. With 67.4% of respondents living outside the U.K. and the rest within, the below analysis provides worldwide perceptions on sustainable travel.
Environmentally friendly holidays are important to travelers: fact or fiction?
Highlighting that travelers, by and large, take the issue of sustainable tourism seriously, almost 50% of those surveyed stated that choosing an environmentally friendly holiday option was important to them, while 40% chose a neutral position. As shown below, Generation Z (those born in the mid- to late-1990s) travelers placed higher importance on environmentally friendly holidays.
Despite the strong intent to undertake sustainable holidays, 37% of our traveler panel highlighted that they struggle to find the best way to be environmentally friendly. This points to the need for additional and clearer information, from the travel industry and other organizations, about the steps travelers can take to reduce their carbon footprint.
A staggering 92% of respondents stated that they were concerned about climate change, reinforcing the idea that sustainability is at the forefront of their destination selection and how they get there. However, despite broad concerns about climate change, there were split views on whether travelers would avoid destinations with poor environmental credentials. Just over a third of panelists wouldn’t visit a country they perceived to show insufficient efforts to fight climate change, while the remainder (65%) indicated that they would not be deterred or were undecided.
Sustainability starts at home
Transitioning into a sustainable lifestyle begins at home, and unsurprisingly, many travelers have already made efforts to minimize their environmental impact. 50% disagreed that “actions by individuals will never be enough to combat climate change”. This finding further highlights the eagerness to make a positive difference in combatting climate change.
Similarly, travelers demonstrated a high incidence of recycling, and nearly 90% stated that they currently recycle their waste—far higher than the U.K. average of 45%. Further highlighting the strong environmental conscience of active travelers, 85% stated that they were minimizing their use of single-use plastics, and 67% stated that they regularly buy locally grown food.
The travel industry still has plenty to do
As travelers change their lifestyle habits to minimize contributions to climate change, this affects how they view numerous industries, including tourism.
We asked panelists how ‘green’ they perceived key sectors of the tourism industry to be, such as accommodation providers and airlines. 60% believed there is little or no effort to be sustainable among hotels and other accommodation providers. As shown below, while this finding highlighted generally negative perceptions of the efforts made by accommodation operators, the industry was less poorly perceived in comparison to cruises, airlines, bus tours and train operators.
What steps can tourism operators take to be more sustainable? One important move for the accommodation industry would be to minimize food waste. Again supporting the view that travelers, although eco-conscious, might not always rule out potentially environmentally harmful activities, there were mixed views that breakfast buffets should be stopped to reduce food waste. That said, a slight majority favoured the idea.
There were also mixed views as to whether travelers should pay more to stay in an environmentally friendly hotel. While some are willing to pay more, most believe this should either be the standard or seem likely to prioritize other aspects of their stay (e.g. value for money) over the hotel’s green credentials. This might be somewhat problematic for hoteliers now, but evolving perceptions should see greater traveler engagement with sustainability. However, encouragingly, travelers believe that efforts by the accommodation sector, albeit perhaps not considered effective so far, are being taking seriously and are not a crude marketing ploy.
Of note for airlines, travelers believe that frequent flyers shouldn’t be ‘flight shamed’ for their contribution to the climate crisis and 70% were against the movement that has gained traction in Sweden. This could imply a traveler perception that sustainability efforts should be the responsibility of the airlines.
The concept of carbon offsetting has generated much debate in the airline industry, but what do travelers think of this initiative? 55% were aware of carbon-offsetting with 50% supporting the initiative, 15% not in favor and 35% unsure.
These findings highlight a degree of confusion among travelers regarding the benefits of carbon offsetting and hint that airlines may need to do more to promote and explain these initiatives.
As travelers become more aware of their effect on the environment and how our choices today will impact tomorrow, there is some way to go before both individuals and companies are in sync with their sustainability efforts. Travelers are expecting more from the tourism sector and will continue to push for change, so the onus falls on the industry to respond and pave the way for sustainable tourism. These are the steps that will preserve tourism for the next generation.
Gauging consumer views and behaviours on environmental issues and sustainability is a useful way of evaluating the tourism industry’s journey to become more sustainable. How do you think traveler perceptions will shift during this ‘decade of sustainability’? We’d love to hear your thoughts, so please share them with us via firstname.lastname@example.org.
Holidays in Hell: The impact of the Covid-19 virus on economies in Asia is potentially huge, as tourism in the region takes a beating. Here, Robert Carnell, Head of Research for ING Asia, attempts to quantify the hit to GDP.
In January 2020, Hawai‘i hotels statewide started the year off strong and reported growth in revenue per available room (RevPAR), average daily rate (ADR), and occupancy compared to January 2019.
According to the Hawai‘i Hotel Performance Report published by the Hawai‘i Tourism Authority (HTA), statewide RevPAR increased to $264 (+11.7%), ADR rose to $314 (+5.6%), and occupancy grew to 84.1 percent (+4.6 percentage points) (Figure 1) in January.
HTA’s Tourism Research Division issued the report’s findings utilizing data compiled by STR, Inc., which conducts the largest and most comprehensive survey of hotel properties in the Hawaiian Islands.
In January, Hawai‘i hotel room revenues statewide grew by 10.8 percent to $439.4 million. Room demand grew by 5.0 percent, or nearly 66,000 room nights, offsetting the nearly 13,400 fewer available room nights (-0.8%) compared to a year ago (Figure 2).
All classes of Hawai‘i hotel properties statewide reported higher RevPAR, ADR, and occupancy in January year-over-year. Luxury Class properties earned RevPAR of $493 (+8.9%), with ADR of $645 (+4.9%) and occupancy at 76.6 percent (+2.8 percentage points). Midscale & Economy Class properties earned RevPAR of $179 (+14.5%), with ADR of $204 (+7.6%) and occupancy at 87.6 percent (+5.3 percentage points).
Among Hawai‘i’s four island counties, Maui County hotels led the state overall in RevPAR at $367 (+11.1%), with increases in both ADR to $478 (+8.8%) and occupancy of 77.2 percent (+1.5 percentage points) in January.
O‘ahu hotels reported 12.9 percent growth in RevPAR to $223 in January. ADR increased to $254 (+5.7%) and occupancy rose to 88.0 percent (+5.6 percentage points).
Hotels on the island of Hawai‘i earned RevPAR of $261 (+14.1%) in January, with increases in both occupancy (82.0 percent, +5.2 percentage points) and ADR ($318, +6.9%).
Kaua‘i hotels’ RevPAR grew to $254 (+6.9%) in January, with higher ADR ($322, +0.6%) and occupancy (79.1 percent, +4.6 percentage points).
Among Hawai‘i’s resort regions, Wailea led for overall RevPAR ($611, +9.4%) and the Kohala Coast led for RevPAR growth ($384, +19.0%).
Tables of hotel performance statistics, including data presented in the report are available for viewing online at: https://www.hawaiitourismauthority.org/research/infrastructure-research/
About the Hawai‘i Hotel Performance Report
The Hawai‘i Hotel Performance Report is produced using hotel survey data compiled by STR, Inc., the largest survey of its kind in Hawai‘i. The survey generally excludes properties with under 20 lodging units, such as small bed and breakfasts, youth hostels, single-family vacation rentals, cottages, individually rented vacation condominiums and sold timeshare units no longer available for hotel use. The data has been weighted both geographically and by class of property to compensate for any over and/or under representation of hotel survey participants by location and type.
For January 2020, the survey included 169 properties representing 47,965 rooms, or 89.4 percent of all lodging properties with 20 rooms or more in the Hawaiian Islands, including full service, limited service, and condominium hotels.
The following are the top 20 revenue earning airline routes to and from the Caribbean for the 12-month period December 1 2018 through November 30 2019 as reported by Tourism Analytics and JG Aviation Consultants using Official Airline Guide (OAG) data. The revenue is reported in US dollars. The route revenue reflects the combined income of all airlines flying the route.
VANCOUVER, Feb. 21, 2020 /CNW/ - Today, Destination Canada - Canada's national marketing organization, recognized a third consecutive record-breaking year with 22.1 million travellers to Canada in 2019 according to Statistics Canada. Tourism plays a significant role in the national economy, generating an estimated $104.9 billion in tourism expenditures in 2019, supporting approximately 1 in 10 jobs in communities across Canada and contributes an estimated $43.5 billion in Gross Domestic Product.
"This record number of arrivals shows once more that tourism is a strong and sustainable sector that benefits businesses and communities, large and small, across Canada," said the Honourable Mélanie Joly, Minister of Economic Development and Official Languages. "By working together, we are inspiring travellers to visit more parts of the country in all four seasons, to experience Canada's diversity and inclusivity, to taste its culinary delicacies and to discover its Indigenous peoples."
Destination Canada supports the growth of the visitor economy through data-driven marketing strategies that stimulate international demand and tourism export revenue for Canada in 10 countries:
Australia, China, France, Germany, India, Japan, Mexico, South Korea, the UK and the US.
This diversified set of source markets allows for continued growth, even when some regions experience uncertainty.
"It is thanks to the hard work and passion of the millions of Canadians who contribute to this sector that we are experiencing another record-breaking year for tourism. It also reinforces that our Team Canada approach with our industry partners across the country is working and we are increasing Canada's international competitiveness," said Ben Cowan-Dewar, Chairperson of Destination Canada's Board of Directors. "Looking to 2020, we will continue to share relevant data, market intelligence and industry analysis with our partners to ensure we are promoting relevant, meaningful content to our audiences. This is especially relevant given uncertainty around the impact of the coronavirus or COVID-19 outbreak. We are committed to working with our industry partners to continue inspiring those with glowing hearts to fall in love with Canada."
In addition to Destination Canada's marketing efforts, the continued growth in the tourism sector is attributable to a variety of factors such as the Government of Canada maintaining renewed visa requirements for key markets making it easier for more people to travel to Canada. There have also been new flight destinations added and increased service on pre-existing routes to several Canadian airports opening up additional air access.
The year 2019 was a good year for Maldives tourism. Maldives received its target of 1.5 million tourist arrivals in 2019 well ahead in November with the total year-end arrivals surpassing 1.7 million. The robust growth has come driven by the Indian market that jumped several places in source market ranking to second position, contributing almost 10 per cent in visitor share, from under 6 per cent the previous year.
Speaking on the sidelines of the recently concluded SATTE 2020, Fathimath Raheel, Director – Procurement, Maldives Marketing & PR Corporation (MMPRC), informed, “We have reached 1.7 million visitors at the end of 2019 which is a great achievement. The other good news is that India has taken the second position in visitor numbers. Last year, we received over 166,000 Indian travelers, reflecting a growth of almost 90 per cent over 2018.” Maldives witnessed 8 per cent growth from India in 2018.
“India is very important source market. India is very close to the Maldives in terms of connectivity. We had issue in the past with regard to connectivity but today we have many budget airlines now flying and we have good connection through SriLankan Airlines also. We have seen a lot of growth due to enhanced connectivity,” Raheel said. Maldives has particularly found favours from segments like honeymooners, family as well as millennial. Honeymooners are visiting the island nation in much larger numbers now.
Social and digital media platforms will be key to Maldives tourism outreach in the Indian market in 2020 as well as elsewhere. “We have done lot of destination marketing and promotion and now we are planning to do more. For 2020, we are trying to lay more focus on social and digital media promotion. People have become so dependent on technology and almost everyone has mobile phone. Besides, we are planning joint promotions with the tour operators as well,” Raheel said,
Maldives is now eyeing the 2 million visitor target for 2020. “We are hoping to mark 2 million arrivals in 2020 and we hope that India will grow more. We are talking to the airlines to increase air connectivity from other major Indian cities as well and not only from Delhi and Mumbai,” she said. China and India are now Maldives top two tourism source markets. Other key source markets are Germany, Italy, the UK, France, Russia, Japan, among others.
Addressing the perception about Maldives being an expensive destination, Raheel said, “There is this perception that Maldives is an expensive destination, but we want to highlight the fact that Maldives is affordable to everyone. There is something for everyone, from luxury resorts and villas to affordable accommodation in our guest houses.”
Maldives is growing its guesthouses offerings at islands inhabited by the locals. These well-equipped guesthouses are targeted at providing more affordable accommodation to tourists and options to stay amidst the Maldivians. “You can do everything that you do staying at a resort, but at a more affordable price points,” she points.
Maldives is continuing to add new products and attraction in order to cater to the increasing arrivals. Several international brands like Hard Rock Café, Saii Lagoon Maldives, part of Crossroads Maldives integrated resort project with shopping, hotels and resorts etc., have opened doors in recent times and are further expanding their offerings to international tourists.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.