Until a vaccine for the coronavirus hits the market, the travel industry is expected to suffer, one industry executive said Friday.
“I think no one is going to feel comfortable, fully comfortable, traveling until they can feel that they are safe and that requires either, perhaps we’ll have a vaccine — hopefully not long from now — or an effective treatment would help. Until that happens, I think people are going to be concerned about travel,” Glenn Fogel, CEO of Booking Holdings, said on CNBC’s “Squawk on the Street.”
Booking, which operates travel websites such as Priceline.com, Kayak and other sites, reported a 51% drop in first-quarter gross travel bookings year over year as consumers cancel trips due to the coronavirus pandemic. Worldwide the virus has infected more than 3.8 million people and killed about 269,881, according to data compiled by Johns Hopkins University.
Even as economies start to reopen, Fogel said, the travel industry will take years to recover to pre-coronavirus levels.
“I’m fairly confident this is not something that’s going to come back in quarters … a full recovery is going to take years,” said Fogel.
In the meantime, travel operators are going to great lengths to instill confidence in travelers. Hotels are rolling out revamped cleaning measures. Airlines have discussed removing the middle seat.
“It’s going to take time for a vaccine to be distributed to enough people to establish the immunity we need in society,” he said.
Until then, Fogel suggested, there are other measures that can be taken to make people feel more comfortable venturing out. Among those steps is monitoring temperatures of travelers at the airport and stepping up hotel cleanliness. Some of these efforts will result in higher costs, he said.
Perhaps one emerging bright spot is a slow recovery in travel in countries where lockdown measures have been lifted. Fogel said China, Germany and South Korea are seeing an uptick in travel, but he was cautious on whether it is a sign of a recovery.
Booking has more than $9 billion in cash on its books, and the online travel company recently raised $4 billion in the debt market. Still, Fogel is considering job cuts and layoffs in certain divisions given the lack of certainty as to when the industry will bounce back.
“In terms of furloughs or layoffs, we are obviously looking at everything, and what’s the future size and shape of the company going to be, and it depends on what we think will be the rate of recovery in travel,” said Fogel.