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Expected revival of tourism industry stops as Omicron suffers

The expected revival in the travel industry has stalled as airline and hotel bookings have fallen over the past two weeks due to new border restrictions following the arrival of the Omicron variant.

Although travel bosses say it is too early to gauge the impact of variation on the sector, new data suggests the worst of the crisis may not have passed nearly two years since. first coronavirus outbreak.

Affected sectors include lucrative transatlantic air routes, while data from hospitality industry tracker STR shows a drop in occupancy rates in Europe, according to research group ForwardKeys.

The impact on the transatlantic routes has been particularly severe. After a rapid recovery since the Biden administration announced it would open its borders to travelers in November, this recovery in demand for long-haul flights has been scrapped by Omicron.

Indeed, the recovery was so rapid that on November 24, the day Omicron was reported to the World Health Organization, bookings between the UK and the US were up 2% from 2019 levels, creating offers a lifeline for airlines such as British Airways and Virgin Atlantic.

But ForwardKeys says flight bookings issued between November 25 and December 7 are 26% below 2019 levels.

Bookings from the EU were also affected, down from 22% to 50% from 2019 levels over the same period.

The impact has also been felt for shorter flights and leisure trips, as several airlines and travel agencies have publicly warned of the impact from the new variant and travel rules. .

Domestic flight bookings to the UK in the last week of November fell 63% year-on-year, compared with a 49% drop in the previous week due to an increase in cancellations, Visit Britain said on Friday.

Heathrow Airport has also warned of “high levels of cancellations” by businessmen concerned about being stranded abroad by UK travel rules.

Tui, Europe’s largest tour operator, this week said concerns about Omicron had begun to affect bookings, while easyJet had also reported “some slight reduction in trading activity” in for the remainder of 2021, but note that the impact is less severe than during travel restrictions. was introduced earlier during the pandemic.

Airline bosses are hoping this variation will prove to be an unprecedented shock in one of the industry’s quieter periods.

The winter months are rarely profitable, especially in Europe, but the situation will be more dire if disruptions reduce bookings for next summer.

For the hotel industry, the impact of reduced occupancy is most severe in countries such as Austria and the Netherlands, where regulations are more stringent. In Austria, a strict ban was introduced on unvaccinated citizens.

But all countries suffered declines due to declining consumer confidence.

STR data shows pre-bookings for hotels in London, Paris and Madrid all fell over the past week.

Figures from Guesty, a short-term rental management company, show that bookings in the US in the first week of December fell 22% from the previous week.

Shares in the travel company have fluctuated wildly since the variant emerged, plunging initially but then recovering partially amid hopes Omicron doesn’t cause serious illness in vaccinated people.

Willie Walsh, general manager of the International Air Transport Association, said: “I think we are all optimistic that governments will quickly review these restrictions.

Another lifeline for the industry is that while bookings have slowed, especially from the UK, which has re-introduced a stricter testing regime than its European neighbours, many customers are turning to Book next year.

“In terms of flight cancellations, where restrictions mean airlines don’t fly, it’s a simple refund to the customer. If airlines are still flying, it tends to shift customers to another day,” said Simon Cooper, chief executive officer of package holiday company On The Beach.

Much depends on the virulence of the Omicron strain and how governments respond to its spread, but customer booking patterns suggest there is confidence that next year travel will be easier. .

Operators have said that pent-up demand for overseas holidays that began with the easing of restrictions across Europe and the US this year has continued unabated.

Fritz Joussen, the managing director of Tui, said this week the company has received orders for next summer with increased prices and high profit margins.

The group said at the end of November it had 2.1 million bookings for the summer of 2022, although this is down 3% from the number of bookings in the summer of the same time in 2019.

However, prices have increased by 23% as customers want to spend the savings accumulated during lockdown in higher-end hotels and longer stays.

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