Global impact of pandemics such as Ebola on hotel industry is relatively limited

Published on : Thursday, July 16, 2015

world economic forumThe Travel & Tourism Competitiveness Index 2015 highlights that the impact of pandemics such as SARS, swine flu and Ebola on the hotel industry is generally contained to the affected regions; to date, the global impact has been relatively limited. While pandemics can trigger deeper declines than other types of shock, the bounce-back to pre-shock occupancy levels is typically the most rapid.

 

 

Deloitte and STR Global analysis indicates that the SARS pandemic of 2002 to 2004 caused extreme volatility in Northeastern Asia, where the outbreak originated. Occupancy levels plummeted some 10 percentage points before recovering to pre-crisis levels within a year. This contrasts with the steady decline and protracted recovery typical of economic shocks. Geographical fallout from SARS was also comparatively limited. For example, in the United States—a significant outbound destination for Northeast Asia—hotel occupancy and ADR declined following the World Health Organisation global alert in March 2003, but returned to growth just three months later.

 

 

Another example is the swine flu outbreak in 2009. Mexico City recorded a 50% decline in occupancy levels at the end of April and early May 2009, when the outbreak was confirmed as emanating from Mexico, and resort markets suffered from tour operator cancellations for the season. However, by early 2010, occupancy levels were in recovery.

 

 

As pandemics are typically short-lived and localized, robust contingency plans and good management should help to carry affected hotel markets through a short-term dip in demand. However, the growth of global travel means international cooperation is increasingly important to manage the spread of virulent diseases.

 

 

First compiled in 2007, the Travel & Tourism Competitiveness Index (TTCI) measures “the set of factors and policies that enable the sustainable development of the Travel & Tourism sector, which in turn, contributes to the development and competitiveness of a country”.

 

 

The index has been developed in the context of the World Economic Forum’s Industry Partnership Programme for Aviation & Travel.

 

 

Source: World Economic Forum

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