The global travel industry is frozen in place
After a year of record profits, coronavirus is causing a nosedive — but there might be light at the end of the tunnel
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After a year of record airline profits, the travel industry is in a nosedive, said Andrew Freedman at The Washington Post. About 2.5 million passengers traveled daily in the U.S. at the beginning of March, but last week just 146,000 travelers a day were screened by the TSA, a stunning 94 percent drop. "Many airlines are operating flights that are only 20 to 30 percent full," even though the International Air Transport Association "estimates that 1.1 million flights will be canceled through June 30." An American Airlines flight from Washington, D.C., to New Orleans last week had only one passenger — a photojournalist on assignment — and yet the planes are still flying their routes, burning cash. One longtime flight attendant for Alaska Airlines said the "industry crisis is worse than the downturn after the attacks of Sept. 11."
The forecast for the cruise line industry is even worse, said David Yaffe-Bellany at The New York Times. Cruises, which usually serve 23 million passengers a year, "have been a focal point of the pandemic, widely blamed for a series of major outbreaks." The biggest cruise lines might have "enough money to survive another six months," but they were left out of the $2 trillion economic stimulus package because they're incorporated outside the U.S. Nightmarishly, several cruise ships are stranded at sea — including one off the coast of Uruguay on which 60 percent of passengers are sick. "Even optimists acknowledge that getting people to go" back aboard after the crisis will take "steep discounts and aggressive marketing," considering about one-third of cruise passengers are 60 or older.
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It's understandable that airlines are reluctant to hand customers refunds for canceled flights, said Chris Bryant at Bloomberg. It's infuriating, yes, but Delta, American, and United each held close to $5 billion in advance payments for 2020 flights, and that's cash that they need to pay employees and remain solvent. "By pulling all their cash out now, customers risk destabilizing businesses that they admire and depend upon." But the airlines should offer customers better incentives to take a voucher. Cruise lines, on the other hand, don't deserve much help, said Josh Barro at NYMag. President Trump seems to have "fond feelings toward the industry," but they're not a U.S. problem. Sixty percent of passengers and 98 percent of cruise employees come from overseas. Domestic ports such as those in Miami, Puerto Rico, and Alaska "may be good candidates for assistance in the next relief bill," but otherwise there's no reason for the industry to get taxpayer dollars.
In China, the first country to see its travel industry decimated, there are hints of light at the end of the tunnel, said Trefor Moss at The Wall Street Journal. Beijing still "discouraged its 22 million residents from going away" for the annual Tomb-Sweeping Day holiday, a three-day weekend, "by reminding them they would face 14 days of home isolation upon their return." And Shanghai reclosed tourist attractions weeks after opening them "in a sign of anxiety about acting too boldly." Even so, travel bookings shot up 50 percent and hotel stays were up 60 percent. The numbers came "as a relief to China's economic managers" — and a promising sign for travel executives around the globe.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, try the magazine for a month here.
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