Travel Sector Collapses Into “Great Crisis” Amid Slump In Flight Bookings

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Travel Sector Collapses Into “Great Crisis” Amid Slump In Flight Bookings

Airlines have canceled more than 200,000 flights as Covid-19 nears pandemic status. Retail outlets at airports across the world have reported a significant drop in foot traffic, resulting in a collapse in sales at duty-free shops.

The Wall Street Journal notes a plunge in global travelers, particularly ones from China, has led to a steep decline of internationalist tourists at major airports. The result, so far, has been devastating, said the Moodie Davitt Report, a travel retail-intelligence service provider, who warned the airport retail industry at major Asian hubs had plunged 60-70% since the virus outbreak began. 

“This is the greatest crisis the travel retail sector has faced, worse than [severe acute respiratory syndrome], the two Gulf wars or various financial crises,” the report said. “That’s largely driven by the fact that the Chinese traveler has become the epicenter of the sector over recent years and many retailers are worryingly reliant on them.”

Airports in Singapore and Thailand began to offer rent relief in February to retail outlets for the next 6-12 months. Officials at Hong Kong’s airport provided $205 million in assistance for industries directly or indirectly affected by declining air travel. 

Geolocation data firm Advan Research said Los Angeles International Airport foot traffic declined 20% YoY in February, a similar decline of 15% YoY was seen in San Francisco’s airport over the same month. 

New York’s John F. Kennedy International Airport’s Terminal 1 retail outlets have recorded a halving of sales in the last month, mostly because flights from the terminal are destined for Asia, and the US government has placed flight restrictions to China.

“Now we’re making $1,000 to $2,000 a day, compared to $4,000 on regular days and $8,000 on exceptionally good days,” said one airport retail operator at JFK. 

Unibail-Rodamco-Westfield, a retail operator with stores at Los Angeles, Chicago, and New York airports, told The Journal that lower foot traffic has been visible since the virus outbreak. 

“Unless the crisis persists beyond six months, I think many tenants will stay put and wait this out,” said Manny Steiner, founder of real-estate consulting firm Steiner Placemaking Advisory.

Twitter users are reporting airports across the world are “empty:”

Tyler Durden

Wed, 03/04/2020 – 12:09

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