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The global business travel sector is expected to take a revenue hit of about 820 billion U.S. dollars as corporates curb travel plans in the face of the coronavirus epidemic,
an industry body said on Tuesday
.
The Global Business Travel Association (GBTA) conducted a poll of its membership from March 4 to 6 and received responses from more than 1,000 member companies throughout the world.
According to the poll, business travel to Asia has been the worst hit, with at least three out of every four companies reporting that they have canceled or suspended all or most business trips to China including Hong Kong and Taiwan, as well as to other Asia-Pacific countries.
The industry group's latest estimate is sharply above its February forecast of a hit of 560 billion U.S. dollars.
"Coronavirus is significantly impacting the business travel industry's bottom line. As the virus continues to spread across the world, business travel is slowing at an alarming rate," said Scott Solombrino, COO and Executive Director of the CBTA.
"The impact to the business travel industry – and to the broader economy – cannot be underestimated."
China including Hong Kong and Taiwan is expected to lose 410.8 billion U.S. dollars in revenue from corporate travel, accounting for nearly half of the global losses, followed by 190.5 billion U.S. dollars in loss for Europe.
Airline and hotel industries, which typically are the biggest beneficiaries of corporate spending, have taken a major hit to their revenue as the virus continues to spread, the industry group said.
Flag carrier of Hong Kong Cathay Pacific Airways expects a "substantial loss" in the first half of 2020 as travel demand stays low amid the ongoing epidemic, said a statement Wednesday.
The company said its net income tumbled 28 percent to 1.69 billion Hong Kong dollars (218 million U.S. dollars) in 2019. Profit in the traditionally stronger second half of the year was only 344 million U.S. dollars due to social unrest and China-U.S. trade tension intensifying.
"We were faced with an incredibly challenging environment to operate as the Hong Kong economy slipped into recession," Chairman Patrick Healy said in the statement.
"Travel demand has dropped substantially," he said, adding that the globally spreading virus is worsening the situation facing the sector.
The airline has cut capacity to the Chinese mainland by 90 percent and reduced its entire international network by about 40 percent, asking employees to take unpaid leave as it tries to weather the latest crisis.
