Earlier today I wrote that coronavirus fears are leading to a major fall off even in domestic travel already. That seems like an overreaction to me. There are only 62 reported cases of COVID-19 in the U.S. so far, half of which are off of the Diamond Princess cruise ship.
This likely understates the number of actual coronavirus cases by a significant degree. Most people who have it now are likely asymptomatic and not getting tested. The testing itself takes time. And there are reports of U.S. regulators standing in the way of widespread testing.
Nonetheless, since this morning we’ve learned that Amazon is telling employees to defer non-essential domestic business travel. It doesn’t seem like this keeps employees safer at the moment. Nonetheless other major employers oncluding Google have already curtailed their international travel. This is likely to spread to other companies.
After mentioning this on Twitter it seems like it already may have. I’ve seen replies that their companies are doing the same and pulling out of trade shows. The value of going to trade shows drops (they are a perfect example of network effects) and the reduction in travel spreads, along with a further reduction in economy activity. A 12% selloff in the markets over the last week may not be wrong.
United is off 23% in a week. Delta is off 21%. American is off 37%. United Airlines is postponing next week’s investor day, saying it isn’t “practical to expect that it can have a productive conversation focused on its long-term strategy next week.”
In other words, judging by business and investor reaction to the continuing news about coronavirus, the best expectation is likely what Patrick Swayze tells the owner of the Double Deuce bar he’s trying to clean up in the movie “Road House”:
I have to imagine American’s shares were pummeled most among the large U.S. airlines because of their outsized debt, which becomes a bigger relative burden when revenue dries up. They have to be hoping for a Fed rate cut bigger than the 50 basis points many are already expecting in March.
Well: https://www.scmp.com/business/article/3052937/hong-kong-hoteliers-say-markets-disaster-90-cent-rooms-stay-vacant-amid
I don’t think most people or politicians for that matter have quite understood the potential economic impact coronavirus will have. Like it or not China consumes a lot but more especially makes a lot that keeps non-Chinese companies manufacturing.
I don’t think we’ve seen the worst personally, and I am generally sanguine about such things.
PS: My wife chastised me roundly for thinking of taking advantage of low HKG hotel rates, despite the fact that HKG is most definitely safer than Italy, as I write…
Gary,
There are two reported cases of community spread in California. They are believed to be two separate communities. Every day that the FDA/CDC delays nationwide, more specifically hospital based COVD-19 testing, the spread of COVID-19 grows exponentially. Had we had the ability to test for this virus at all US based hospitals (we have the technology to do so already for many other viruses) one month ago, we could have drastically limited the spread of this disease. By now it’s clear that community spread is occurring and will continue to do so.
As a result, air travel both international and domestic will be a risky proposition. Your odds of contracting the virus will increase in the days to come as the exponential effect of the undetected community cases multiply. I am skeptical that we will be able to contain COVID-19 at this point given the lack of routine testing.
Waiting for Hyatt to bring back Faster Free Nights.
Hey those SNA’s should at least clear at a higher rate
AA is busy closing frequent flyer accounts. They may wish they had some of those folks back to fly on their empty planes.
I have domestic business travel in March and April outbound from the Bay Area, I have no plans to cancel and if flights are cancelled I will drive. The kinds of restrictions put in place in China will not work
In the US
bye bye OPM elites!
Leave status for those of us who actually pay for their tickets!
Have no fear, VP Pence will also pray the virus (along with the gay) away
Meanwhile, Marriott, in the context of falling rates/ every other chain offering promos/bonuses/ incentives, doesn’t bother to have a Q1 promo. Defies belief…
Chesterwilson, I’d respectfully disagree. I would be interested in hearing how testing could “drastically limit the spread of this disease”. We have no treatment. We have not been able to stop the yearly flu epidemics.
Like the universal precautions put in place to stop HIV, other but similar measures like meticulous hand hygiene and other efforts to avoid exposure are key. Just assume every sick person is infected.
Granted I’ll continue to monitor the situation, but so far I’ve no plans to cancel the 3 international trips I’ve booked (in paid business, dang it, sounds like upgrades might be more likely). As a health care worker, I’m sure I’ll be safer strolling the streets of Medellin than slogging through the onslaught of COVID-19 victims we all expect.
I’ve cancelled 2 FC ANA award tickets and 2 paid FC AA tickets scheduled over March and April.
Low-reward loyalty programs aren’t motivating anymore. I take my health more seriously. Oopsie.
Just canceled a week at Disneyworld- isn’t worth getting stuck in a hospital 2000 miles from home.
We’ll see if the airline steps up on the award cancellations?
@ Chesterwilson — While the failure of the CDC to widely distribute effective testing kits is unfortunate, it is certainly not the cause of any “community spread” of the virus. Candidly, there haven’t been lots of sick people showing up with coronavirus in USA hospitals. The current testing method has been effective, albeit slow. With more cases lurking, more test kits are obviously needed, and the CDC has said they are rushing them to hospital this week.
Meanwhile, it seems increasingly likely that the public is going to have to live with coronavirus being a serious new-but-not-end-of-the-world health problem. They say there are Five Stages of Grief: denial, anger, bargaining, depression and acceptance. I’m not exactly sure what step we’re currently in with this virus (maybe depression?), but humans will eventually move to “acceptance.” It’s how we roll as an imperfect species.
In 2002, West Nile was going to kill us all.
In 2004, SARS was going to kill us all.
In 2005, Bird Flu was going to kill us all.
In 2009, Swine Flu was going to kill us all.
In 2014, Ebola was going to kill us all.
In 2016, Zika was going to kill us all.
And I left some out.
Yawn.
The virus is likely already here. There is no way to keep a virus like this from coming. By trying to slow down the spread of the virus by restricting travel and closing schools buys us time to figure out how to deal with it. In the end the goal is to save lives. Not to ruin your day, not to bring down the economy, not to “bring down the president”, not to make people panic. If this virus is allowed to spread freely in the community, then each of us will likely know someone that will die from this virus. Hospitals will be overrun and people turned away which will cause more deaths. This virus shut down a city bigger than New York. Has closed schools in Japan, and is threatening to bring the global economy to its knees. People are taking it seriously, and so should you.
@toomanybooks. +1
Remember the swine flu in 2009. It started in Mexico. Since there was no border between Mexico and USA, everyone was predicting it would come quickly to New York and cause many deaths. After it did not appear to happen, someone actually went out and tested New Yorkers. Most had the antibodies to the Swine flu. In other words, it came and left, and nobody noticed.
I believe that the coronavirus is serious. I am traveling now. However, I am more worried about catching a standard variety cold (or Montezuma’s revenge), and then being quarantined for 2 weeks, just in case my cold (or bad ice cubes) turns into the coronavirus.
The speed at which business is “backing away” and the supply chain is slowing is unsurpassed in my lifetime
@toomanybooks: Nobody thinks this is going to kill everyone. On the other hand no business wants to be responsible for placing employees in harm’s way. So, everyone is stepping all over their neighbors to cancel everything.
I’m truly at the epicenter –Las Vegas–of this cancel culture. Nobody HAS to come here.
Certainly , monetary policy isn’t going to do a whit to solve the problem.
I can think of plenty of modes of transmission and virtually no answers because this country isn’t set up to quarantine cities.
Think about that while you’re picking your fruit and veggies by hand, picking up your prescription that may have been required to have the pharmacist count the pills before filling them,
and a thousand other modes of transmission.
As to a 12% stock decline in one week, as the song goes, “you ain’t seen nothin yet”
Confidence is weakening , and unemployment is coming.
We can’t “print our way out” with more money…in fact the actual money may be a major mode of transmission.
The panic of Covid seems to be a case of much ado about not much. Yes, it is a virus, and yes it has spread, but considering that the major impact is seen on those who have compromised immune systems, Im not sure there is a need to panic.
@747always “the major impact is seen on those who have compromised immune systems” — well, duh!!! Congratulations, you’re a doctor now.
Never mind that 100% of those who get it go into the hospital for 2 weeks, 13.8% have severe disease, and 6.1% are critical (respiratory failure, septic shock, and/or multiple organ dysfunction/failure). You may be OK with these odds, if so please have insurance/money to pay for all of it because I certainly don’t want my taxpayer dollars paying for your cavalier attitude (imagine what the costs are to hospitalize 80,000+ people for 2 weeks — those are the numbers in China).
And I also hope you’re not using up a hospital bed that I might need in case I get sick or am in an accident (in China people are dying of regular diseases because access to health care is curtailed by COVID-19 cases).
@toomanybooks & Other Just Saying:
You may read up about Italy. They had a very cavalier attitude about it. Now “there is a widespread, ongoing outbreak of respiratory illness (COVID-19) caused by a novel (new) coronavirus that can be spread from person to person” and the” CDC recommends that travelers avoid all nonessential travel to Italy.”
How well did the “this too shall pass” attitude of Italy work out for them? Oh, and Italy, unlike the US, actually did cancel flights to/from China, and even Hong Kong (to show their stupidity).
This might be one of those moments where the airlines stop taking frequent flyers for granted. Especially those that either pay for their own travel or are in control of it. As a long time 1K I’ve flown 0 PQP/PQF/EQM (whatever there latest made up qualification pseudo rules are called) so far this year but have bought business class tickets with One World and Sky Team. Will continue to fly throughout the year as I see fit while many road warriors who are spending the money of their employer are cooling their heels. How much is my business worth now United, Delta, American? You have all done a tremendous job lowering the value proposition of your frequent flyer programs let’s see if you can spend a few years making things right again. For my business it might be too late as I’m enjoying being a free agent too much. So many great airlines out there so many places to credit.
@Jake. You are making a straw horse argument. Restate the other persons position into a straw horse, then mock the restatement. Your straw horse is that toomanybooks and I were saying the coronavirus was not serious. Of course, we both (I cannot really speak for toomanybooks) agree that the coronavirus is a serious medical issue. However, the hyperbole machine worldwide that toomanybooks commented on is turning the coronavirus into the end of the world stuff. It is not. It will pass. The world and mankind will survive.
Personally I could see putting off some travel to places like China or Northern Italy etc. But it’s actually a good time to book travel for later in the year although prices should continue to drop. It’s a good time to buy cruise line stock. They give stockholders discounts and perks. With most cruise line stock value down 25% now or soon would be a good time. I don’t think airline stock is a good long term investment personally but it too will be a great buy in the next few weeks I’d guess.
I haven’t seen big declined in domestic business travel personally. Heck I was 26 out of 40 on an AA AUS-DFW upgrade list as a platinum earlier this week at an off hour. Not sure how you manage that mess Gary.
@747always
“Much ado about not much” in the context of ( paraphrasing) it only kills old folks with other health issues, so there’s no need to panic. Apart from the very disturbing ethical issues in your comment, you do realise that those you deem not worthy of much concern total about 100,000,000 Americans?
“Duty of care” lawsuit threat is the driver here – these companies don’t have a special crystal ball – they’re trying to CYA nonsense lawsuits
Two major national dental conferences, one in DC and one in Seattle, that both begin in about two weeks are teetering on the verge of cancellation. They’re in urgent discussion now. Attendees are cancelling hotel rooms. Yes, a major falloff in travel is starting and I have a feeling we ain’t seen nothing yet. People shouldn’t panic but they should prepare. Also, a man who has lied 16,000 times since taking office probably couldn’t sound credible even if he managed to tell the truth for once. So we enter a public-health crisis under leadership that has negative credibility; if Trump and company say something, people will assume, probably correctly, that it’s false.
Many health experts are now predicting COVID To act like the 1918 “Spanish” flu
It lasted for 2 years. About 1/3 of world population was infected. Estimated 50 million dead. (675k dead in US).
Main reason is that the virulence and mortality of these two viruses seems to be similar thus far
I think it will not be quite that bad
But far worse than typical influenza
First reason:
Mortality rate of COVID is likely overestimated. We only know about the sick people so far. There are likely many asymptomatic people and folks with mild symptoms that are undiagnosed. Adding them to the denominator will improve the mortality rate. (But it will still be 10-15x worse than typical flu)
Also, there was no vaccine then. Today we have the potential to create a vaccine (1-2 years)
I would not be surprised If the COVID vaccine becomes the first US wide mandatory vaccine.
(Small pox was not mandatory US wide, but was first vaccine mandated by some states that went all the way to Supreme Court)
FWIW I am an MD, but not an ID specialist
At least one case has been reported in Mexico City and my husband just went with friends, for the weekend. There is no reason for concern, Trump says it just “a hoax.” The Dems have conjured this up just to damage Trump.
After the Ebola virus outbreak of 2014, the Obama administration hosted an international summit to set up global arrangements to deal with future epidemics — and it created a unit in the National Security Council to focus on the issue. But that unit was disbanded by the Trump administration in 2018 and America’s Centers for Disease Control and Prevention has also suffered drastic cuts to its epidemic prevention activities.
Amapas: surely you jest. Education is key here. You must educate yourself (and not just by watching Fox News and born-again pundits). Read the New York Times. Read articles by doctors, the CDC, WHO and other specialists in epidemics.
@ Gary — This whole thing is amazing. It’s having the impact of 9/11 without an attack. That shows that bioterrorism would be highly effective if utilized by our enemies.
@Kathy @chopsticks, most healthcare facilities have the ability to test for many viruses. The turnaround time is as quick as an hour. Had the CDC worked with Biofire on adding COVID-19 testing to the existing respiratory viral panel, we would have been able to detect COVID-19 patients on a large scale and sooner. Only 500 patients have been tested in the United States and now we are finding that community spread is occurring. Had this test been available sooner, we would have found out that there were many more cases than we originally thought. Now containing this would be more difficult as we can’t enforce the draconian measures that China has. However, we would have had the ability to isolate the communities affected and potentially reduced exposure.
The only way to reduce COVID-19 is by having a vaccine or isolating communities to contain disease. Earlier detection would have given us a chance. Unfortunately, it seems the cat is out of the bag and we will soon be inundated with COVID-19 patients.
When should I as a healthy person isolate myself?
Agree this is an overreaction by corporations (as is the sell off of stocks). On the other hand I can see companies doing this to limit liability as some ambulance chaser will likely sue if someone got the virus on a business trip under the logic that the employee should never have been required to travel.
As for me, I am getting on a plane (domestic flight) Tuesday AM, have a flight to Germany in 2 weeks and have 8-10 domestic trips planned plus wrapping up planning for a 2 week trip to Italy in August with my family. I fully expect the virus to weaken, like similar ones in the same family do, as temperatures rise and be a memory by mid-summer. In the interim I am not worried and even if I get sick I don’t see it being materially worse than the flu.
As for stocks, I’m retired with a sizable portfolio (mid 7 figures). I sold a good bit this week to lock in gains but am looking at starting to buy at these lower levels. I’m a long term investor since I get pretty much enough cash flow off my investments to cover my lifestyle without liquidating positions (also have a large muni bond portfolio) and if you are looking 5-10 years out this is a buying opportunity.
–On stocks. I am significantly up since Trump took office.
–Stock prices are forward looking and risk adverse. The fear of coronavirus impact, is causing the stock prices to go down.
–As soon as the cost of the virus is estimable, they will base stock prices on forward earnings, during the recovery. Stock prices will go up really fast.
I still say it is disgusting how the Democrats and their ilk in Fake News (also Democrats) are rooting for death and destruction of Americans from the coronavirus, because it would hurt Trump. They make up anti-Trump stuff out of whole cloth, by weaving together words from different paragraphs. Or pulling a single sentence out of a paragraph, without regard to the meaning of the paragraph. And various commentators above are repeating the Fake News like parrots. Disgusting.
For example: Trump said in the Las Vegas rally: ‘Now the Democrats are politicizing the coronavirus. Coronavirus. They’re politicizing it. We did one of the great jobs, you say, “How’s President Trump doing?” They go, “Oh, not good, not good.” They have no clue; they don’t have any clue….Think of it. And this is their new hoax.’
In other words, in plain English, Trump is calling “politicizing the coronavirus” the Democrat’s new “hoax”. The media reports it as Trump saying the coronavirus is a hoax. Bold in your face lie by the media.
@ Just Saying- you probably don’t actually read mainstream media, preferring to get your news from a Fox drip feed. But if you actually broadened your reading you would see –
CNBC – “Trump says the coronavirus is the Democrats’ ‘new hoax’”
NYT – “Trump Accuses Democrats of ‘Hoax’ for Criticizing Virus Plan”
Now, because Trump speaks in partial sentences and speaks off the cuff, it is often difficult to parse his real meaning. But reputable journalists do their best to write the truth as accurately as they can.
@Just sayin’, please give us 1 solid example of this “wishing for death” on the part of dems or the media. Not what you heard from our Idiot in Chief or Faux News, but an actual source.
@George & MBH. Busy having fun, Idiots. Cannot be bothered to argue with you creeps.
Other just saying: please see my comment above in reference to Amapas post:
EDUCATE YOURSELF!
@George. Ok, it was probably a little strong calling you a creep. After a night at the disco, lots of whiskey, maybe I should not post.
You said: “Now, because Trump speaks in partial sentences and speaks off the cuff, it is often difficult to parse his real meaning.” This is essentially wrong. Do you actually listen to Trump? His meaning is really easy to understand to anyone that has basic English comprehension. .
Moreover, unlike Obama who always used a teleprompter when answering questions and Bush II who seldom had press conferences, Trump is very transparent and talks to the press every day. IF as you say “reputable journalists [were really trying to] do their best to write the truth as accurately as they can”, the journalist could easily ask him what he meant and he would tell them.
Instead they go after him with trap, gotcha, and loaded “when did you stop beating your wife” type questions trying to advance a Democrat narrative. All Trump has to do is misspeak once, and mainstream media will have a field day. Further, mostly, the democrats and the mainstream media are on the same page. WTH. It is hard to see why so called “reputable journalists” were running the the Stormy Daniels story for a year. Hard to take the ethics of these journalist seriously.
Why do I say this, because I have been watching these impromptu press conferences live. I do not need a filter a filter of mainstream disreputable journalists to figure out what is being said.
18,000 dead in the USA so far this year!!! Oh no this is a disaster. It’s a terrible outbreak of . . . the flu. https://www.cdc.gov/flu/weekly/index.htm
At what point can we call this an overreaction?