The impact of Covid-19 will on the travel industry will be “nine times worse than 9/11,” the U.S. Travel Association said today.
The trade organization commissioned a report detailing the expected economic damage caused by the infectious disease. The travel sector is bracing for a drop of $519 billion in domestic travel spending, a loss of $80 billion in tax revenue, and more than 42 million fewer travelers visiting the U.S. in 2020 than in 2019.
Of that $519 billion lost, more than $402 billion would have been spent domestically, while the other $116 billion would have come from international travelers, a decline of 60% from 2019.
In contrast, international visitor spending fell $25.2 billion following the terrorist attacks of Sept. 11, 2001. But while 9/11 was an isolated event, the Covid-19 crisis is ongoing—and health officials still can’t say for certain when life will return to normal. Even then, presumably, the travel industry—and the discretionary spending it requires—will lag behind.
In April alone, when travel restrictions are—hopefully—at their tightest, the industry is expected to see revenue losses of up to $83 billion.
Oxford Economics, the global forecasting firm that created the report for the U.S. Travel Association, had estimated that 24 million Americans would be unemployed in April, with one-third of those coming from the travel sector. The current unemployment figure is hovering around 22 million.
While the report is somber, it ends on a hopeful note. By “flattening the curve,” federal and state governments may have mitigated the economic losses to the travel industry. The current lockdowns are projected to lead to $117 billion in travel spending during the second half of 2020.
Of course, the industry didn’t need this report to know things were bad.
Among the individual sectors within the travel industry, airlines are expecting losses of $314 billion, according to the International Air Transportation Association. The group has revised the figure three times, previously estimating that the economic damage would fall somewhere between $63 billion and $113 billion before the disease spread throughout the U.S.
When it comes to hotels within the U.S., nearly eight in 10 rooms are empty, with the industry losing more than $13 billion since February, according to the American Hotel and Lodging Association.