Dozens of international industries have been affected by the aggressive spread of Zika, the mosquito-borne virus for which no vaccine or cure is currently available. Nevertheless, the travel industry is in the forefront of this crisis as it addresses customer concerns and also assesses the long-term fallout on business.
Where It Is and What It Means
Zika’s reach now extends to more than two dozen countries (see complete list below). In addition to Mexico, the Caribbean and Central and South America, Zika has been found as far away as the Pacific Islands and Cape Verde off Africa. The Centers for Disease Control and Prevention (CDC), a U.S. government agency, offers detailed, updated information on each of the infected areas, as well as tips on prevention. Among the infected areas are the U.S. territories of American Samoa, Puerto Rico and St. Croix in the U.S. Virgin Islands.
On Feb. 1, 2016, the World Health Organization (WHO) declared that the disease had grown into an official “public health emergency of international concern.” WHO advised that an emergency committee’s review of the evidence found Zika constitutes an “extraordinary event” and poses a public health threat to other parts of the world.
Anyone living in or traveling to an infected area is at risk, especially babies too young to be exposed to insect repellent. In most cases contracting Zika does not pose a long-term health threat, but the virus is particularly harmful to pregnant women and women planning to become pregnant, and many scientists suspect that it may cause the rare immune-system disorder Guillain-Barré syndrome. However, WHO added, “The committee found no public health justification for restrictions on travel or trade to prevent the spread of Zika virus.”
The Widening Zika Zone
These are the regions where the Zika virus has been found to date, according to the Centers for Disease Control and Prevention.
• THE CARIBBEAN: Barbados; Curaçao; Dominican Republic; Guadeloupe; Haiti; Martinique; Puerto Rico (U.S. territory); Saint Martin; U.S. Virgin Islands
• CENTRAL AMERICA: Costa Rica; El Salvador; Guatemala; Honduras; Nicaragua; Panama
• SOUTH AMERICA: Bolivia; Brazil; Colombia; Ecuador; French Guiana; Guyana; Paraguay; Suriname; Venezuela
• PACIFIC ISLANDS: American Samoa; Samoa
• AFRICAN COAST: Cape Verde
The Travel Industry Responds
Airlines from around the world have amended their policies to accommodate passengers affected by Zika. Among domestic carriers, Delta Air Lines, JetBlue Airways and United Airlines are all allowing “concerned” customers to change reservations or obtain refunds without penalty, while American Airlines is extending such offers only to pregnant passengers. (Just provide a doctor’s note confirming your pregnancy when you request a refund.) Southwest Airlines policy already allows passengers to change flights without incurring a fee.
Helane Becker, an airline industry analyst for Cowen Group, said, “We believe there could be a slowdown in bookings during this time of heightened media coverage and general fear until more information is known.” However, Becker added that she does not believe Zika will affect airline shares the way they were impacted by SARS in 2003 and Ebola in 2014, and in fact she thinks that a decline in shares could be a “buying opportunity.”
Cruise operators are responding to this crisis as well. Norwegian Cruise Line and Carnival Cruise Line both are allowing pregnant women to alter their itineraries, and Royal Caribbean also is offering alternatives. Euromonitor analyst Amanda Bourlier told NBC news that “we likely will see a significant decline in trips by women who are pregnant or trying to conceive to these regions.”
Wells Fargo analyst Tim Conder estimated that the “worst-case impact scenario would see global cruise demand potentially impacted about 6% – 1.449 million cruisers of 24 million.” However, such estimates likely are too high, according to Conder, because “cruise industry policy generally prohibits women who are 24 or more weeks pregnant at the beginning or during any part of their cruise from embarking.” He added, “We believe the ultimate net impact of Zika on cruise bookings and travel in general will be materially less than feared and, in hindsight, will be grouped with other disease ‘scares,’ for example, Ebola and norovirus.”
Hotels have been less aggressive about addressing rebooking issues. However, the Caribbean Tourism Organization and the Caribbean Hotel and Tourism Association issued a joint statement acknowledging that the crisis could soon have a negative effect on the region’s economy: “The consequences of reduced tourist numbers for the millions of people in the Caribbean whose livelihoods depend on the sector can be serious, contributing to adverse economic and social burdens on Caribbean economies. As travel increases the number of Zika cases among travelers will likely increase, and the potential negative impact on Caribbean tourism-dependent economies will likely escalate.”
Estimating the Impact
It remains unclear how much travel will be diverted due to this outbreak; the coming weeks will tell. A further complication is that the 2016 Summer Olympic Games will be held in Rio de Janeiro this coming August; Brazil is on the CDC’s list of affected countries.
The Business Travel Coalition (BTC), which represents the interests of corporate travelers, has created Zika.travel Resource Center, a new site offering a wealth of information about this crisis on a country-by-country basis. In early February 2016 it noted: “In terms of potential impact of the Zika virus on air travel demand, it will likely be largely on the leisure side of the business. It could be significant, though, given WHO’s projection of a very rapid escalation to four million cases in the Americas alone, and the propensity during these kinds of outbreaks for misinformation and rumor that can unnecessarily alarm tourists.
“To avoid panic, and unnecessarily canceled leisure or business travel trips or worse outcomes, highly effective and timely communications from governments and health organizations will be critically important on a number of subjects," the site added. "Miscommunications, misunderstandings and rumors during the 2014 Ebola epidemic resulted in otherwise avoidable problems.”
The Bottom Line
International health authorities continue to assess the rapid spread of the Zika virus throughout dozens of countries. Events are changing quickly, but it’s clear there will be economic consequences for the travel industry. That said, hotels and resorts are likely to be harder hit than airlines and cruise lines, which have more flexibility in moving their assets and offering alternative itineraries.
Individuals who wish or need to change their travel plans should consult their airline, cruise company, hotel or tour operator for more information. Travel insurance may also be useful here (see How to Shop for Travel Insurance for more information).