Over the past few weeks, the coronavirus pandemic has gripped the world with a renewed
sense of concern and uncertainty. While initially hard-hit states like New York have begun to
reopen, southern regions like Arizona and Texas have begun to report record-breaking numbers
of new cases. The financial markets have taken note of this, with the Dow falling nearly 4% the
week of June 22 nd , but not all industries are affected equally. As the time frame of the
coronavirus remains uncertain, many of the companies being negatively impacted the most are
those in the hotel, travel, and leisure businesses. By extension, states and other regions relying on
tourism as a key source of revenue are also being negatively impacted.
A prime example of this is loss of revenue for hotels and attractions in states like Hawaii
and Florida. This past week, hotels on all of the Hawaiian Islands saw significant declines in
both their revenue per available room (“RevPAR”) and average daily rates (ADR). As of now,
the hotel industry in Hawaii has experienced a 95.5% year-over-year decline in “statewide room
revenue,” indeed highlighting the severity of the situation. Meanwhile, major theme parks in
Florida, most notably Disney World, have elected to remain closed. While Disney does have
tentative plans to reopen during Q3 of 2020, over 7,000 people have signed an online petition
asking that the company’s parks remain closed longer. Disney has already reported Q2 revenue
losses of approximately $1 billion, and it is unlikely that the extended period of closure will be
any less forgiving on their income statement.
These business horror-stories are not confined to American enterprises, either. While
much of China had resumed relatively-normal operations in early June, markets and airports
have begun to experience restrictions yet again as cases in Beijing and other populated areas rise.
Similarly, Carnival Corp (NYSE: CCL), which is incorporated in Panama, has been forced to
completely cease its global operations, resulting in the company reporting negative EPS (-$3.30)
more than double that of analyst estimates (-$1.56) while also missing revenue estimates by over
$400 million. Similar to its land-based leisure counterparts, Carnival, along with other major
cruise lines, remain at the mercy of the coronavirus and its spread as they desperately seek to
return operations to relative normalcy.
As the coronavirus continues to plague both out society and our economy, it is unclear
what will lie ahead for the travel and leisure businesses across the world. Perhaps the most at risk
are small or locally-owned hotels and other similar businesses, as they often last the resources to
engage in large financing efforts. However, the longer the coronavirus persists as a global enemy
of society, the greater the possibility that even the most gargantuan of corporations will be
pushed to their financial limits.
(n.d.). Retrieved July 03, 2020, from
Whitten, S. (2020, June 25). Walt Disney World employees petition to delay reopening as
coronavirus cases surge in Florida. Retrieved July 03, 2020, from