The travel industry is getting hammered on the back of a large market decline, and the market driver is the Coronavirus. Stocks were down across all indexes with the Dow Jones closing down near 500 points on Monday. But the declines in the travel industry will linger long past a solution to Coronavirus, as history shows the damaging impact to travel when health scares disrupt markets.
The cruise line industry is estimated to be around US$45.6 billion with around 26 million passengers annually and had begun to find a growth spurt in revenue from developing nations of Asia and Africa and countries like Australia and New Zealand were showing tremendous growth. China has also stepped into the competition with an increase in passengers visiting Japan and Korea. North America has been leading the industry followed by Europe.
The key factors driving the growth of the cruise market are decreasing unemployment, growing economic growth, increasing urbanization and a variety of destinations. Some of the noteworthy trends and developments of this industry are global shifting of passenger load, creating a difference through branding, the convenience of on-demand workspace and technological advancements. However, the expansion of the cruise industry can be affected by the effect of global economic conditions, unpleasant incidents at sea, environmental issues and piracy acts. It seems much of this momentum has changed with the discovery of the Coronavirus in China and lingers long beyond a bounceback by other market sectors.
For those willing to brave international travel, you will find discounted cruises once the CDC lifts travel bans, as the industry has a plan to retool staff and prices. The industry has bounced back after health scares like Coronavirus, and the horrible devastation of September 11 was a good example of the resiliency of the cruise industry as the passenger numbers went to near zero.
Expect cruise industry shares prices to lag, and turn as improved valuations will not materialize until the passenger counts start the long climb back to normalcy. This pattern occurred in 2001 during 911, and also the MERS Virus scare as well as the Bird Flu scare, but the demand for cruise ship travel will pick up its momentum again once an antidote is discovered and cabins on cruise shops start to fill up again.