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Will Travel and Tourism Recover From Coronavirus?

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Will travel and tourism recover from the ongoing onslaught of the coronavirus? 

Judging by how investors have been selling off shares of airlines, cruise operators, hotel chains and travel operators, the answer is not anytime soon.

Indeed, as investors continue to re-assess value and risk in all corners of financial markets, one of the most obvious and hardest-hit sectors - travel and tourism - continues to reel from the cascading impact of the coronavirus.

Beyond images of trapped cruise-ship passengers, near-empty airplanes and deserted airports and ghosted tourist attractions, companies that fly and cruise people around and cater to vacation experiences are still trying to re-assess their new, stark reality.

So too are companies, particularly airlines and cruise lines, who are not only pulling their guidance numbers off the table and warning of quarterly losses to come, but are quickly and decisively tightening their belts - by cutting flights and sailings, by reducing fees and by allowing consumers to reschedule vacations. 

For investors and consumers alike, the real question is how long this will continue. For investors specifically, the even more-real question is whether some of these players can and will survive. 

For now, there are no expectations that they won't - and there are discussions about fiscal help from Washington that will lend themselves to ensuring they don't. But with unprecedented times and unprecedented measures impacting travel and tourism companies' itineraries literally by the day, uncertainty is expected to remain for some time.  

“9/11 wasn’t an economically driven issue for travel - it was more fear, quite frankly,’’ Southwest CEO Gary Kelly warned this week. “And I think that’s really what’s manifested this time … It has a 9/11-like feel. Hopefully we’ll get this behind us very quickly.’’

Join Jim Cramer's special Action Alerts PLUS members-only call to prepare your investment strategy during the economic fallout from the coronavirus.

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