COVID-19 Impact on Online Travel Market
The global financial crisis and the lack of consumer spending post the COVID-19 outbreak has created a significant threat for the travel intermediaries. The negative impact on airline and lodging bookings has compelled the travel companies to stop their operations completely and also lay off employees in the past month. As stated by the CEO of Booking Holdings, online travel has suffered two recessions in the past, but the market growth has been hit the hardest due to this outbreak. As analyzed, some of the largest public online travel agencies are likely to lose more than USD 12 billion in revenue due to the 2020 Coronavirus outbreak, and the amount can even reach up to USD 20 billion in case the number of cases goes up in coming months. The pandemic has severely affected the North American and European countries. These countries are witnessing a decline in business. At the same time, Chinese online travel agencies (OTAs), although at a sub-optimal level, are slowly resuming operations.
The largest business firms are suffering massive losses, while small businesses are doing marginally better and are slowly recovering. The rapid spread of the Coronavirus across Europe, Asia, and North America and the uncertainty of travel trends have led to the Expedia Group, Inc. having to withdraw its full-year EBITDA 2020. With no visibility of better conditions ahead, the company has suspended reshare purchases to ensure complete and additional flexibility for the future.
As per MRFR analysis, the impact of COVID-19 on the online travel industry is quite high and is likely to remain the same during the coming months. Even after the situation reverts to normal, the industry will continue to follow the norms of social-distancing. The industry cannot expect the same quantum of airline and lodging bookings as before. It is expected that the prices will increase considering how important it is for the customers to travel. This will, in turn, result in increased cash flow in the market, thereby creating opportunities for the OTAs across the globe.