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Be afraid. Be very afraid. The latest variant of Covid-19, Omicron, has spanned continents and laughed at the ocean moat protecting the U.S.
Omicron has arrived, and the travel industry is quaking in its boots. The U.S. has instituted new testing procedures for inbound travelers, and most travel from eight southern African companies, including South Africa, where the new variant was discovered in November, has been halted. Even the Federal Reserve apparently believes the new variant will stoke inflation by further threatening the supply chain and worsening the worker shortage.
But is it an overreaction? The same nagging question, debated by millions, remains. How bad is it? Is it bad enough to shut down countries and industries like travel? As an AP story noted, “For all the alarm, little is known about omicron, including whether it is more contagious, causes more serious illness or can evade vaccines.”
A new variant of the Covid-19 virus that has killed 5.2 million people worldwide (780,000 in the U.S.) the Omicron variant is moving at internet speed. Less than two weeks after its discovery the first US case of Omicron was detected in the United States.
The unlucky first U.S. Omicron patient, a San Francisco man, had flown back from South Africa on November 22. Interestingly, he had been fully vaccinated and was only experiencing mild symptoms.
Nonetheless, airline stocks took a dive. On December 1, five of the six top U.S. airlines, including Delta, Alaska, Southwest, United and JetBlue, hit 52-week lows. A look at the stock charts of Hilton (HLT) and Marriott (MAR) shows a similar swoon. By week’s end, travel stocks had dusted themselves off, but were still down.
The travel stock slide made, once again, a prophet out of ageless Warren Buffett. President Trump mocked Buffett’s wholesale dumping of airline stocks in 2020.
But at a Berkshire Hathaway shareholders meeting in May, he defended the fire sale of huge positions (around a 10% stake) in American, United Southwest and Delta . “Buffett argued the future of air travel is still uncertain because of the coronavirus, especially international and business travel, telling investors in a live-streamed address he ‘still wouldn’t want to buy the airline business.’
Nonetheless, domestic travel numbers in the US were looking good until the arrival of the latest variant, especially if you enjoy crowded planes and airports with long lines. The TSA screened 2.45 million people at the end of the Thanksgiving weekend, Sunday November 28, the most in a single day since the pandemic began in early 2020.
Will the promising numbers drop again due to Omicron, just as the Delta variant of Covid-19, combined with continuing international quarantines, dented was supposed to be a summer of “revenge travel” in 2021?
Axel Hefer, the CEO of trivago, a leading online travel agency (OTA), said that he believes that governments will likely impose restrictions again to slow down travel. He said the idea appears to be to try and hold off on the variant spreading quickly, in order to give time to learn about how the vaccines will react.
Hefner appears correct so far, as a number of countries have already reintroduced travel restrictions. Although on November 8 the U.S. finally eased the 600-day Trump/Biden travel ban on international tourists, it has now banned entry by most foreign nationals who have recently been in one of eight southern African countries, including South Africa, Zimbabwe, and Mozambique. United Nations Secretary-General António Guterres called the U.S. ban as “travel apartheid.”
As of December all U.S.-bound international travelers will now be required to test negative within one day of departure [formerly three days] for the United States “regardless of nationality or vaccination status.” And in another move sure to be popular with US domestic travelers, the airline (and train and bus) mask mandate has been extended yet again, to March 18, 2022.
Austria has extended its lockdown. Israel has, once again, closed its borders to foreign visitors, wreaking havoc with the tourism sector anticipating travel by tourists and pilgrims during the Hanukah and Christmas seasons. While 421,000 visitors arrived in November 2019, just 30,000 came to Israel in November 2021.
Christmas markets in Prague have been shuttered, ski lifts in Germany must police customers to determine vaccination status, and Japan told airlines to stop taking reservations from foreign travelers for inbound flights. On the business side, the International Broadcasting Convention, set to begin December 3 in the Netherlands, was cancelled due to that country’s partial lockdown. The uncertainty may be driving sales of travel insurance, but the rest of the world tourist economy is again suffering.
Opinions on the actual impact of Omicron are divided. “Frankly, omicron will dominate and overwhelm the whole world in three to six months,” Singapore doctor Leong Hoe Nam said on CNBC’s “Street Signs Asia.” But although the new variant’s spike protein has mutations associated with higher transmission and a decrease in antibody protection, others believe, as Dr. Syra Madad, of the Belfer Center for Science and International Affairs, put it, “I do think that our current vaccines will hold up to a certain extent.” Meanwhile, drug companies like Pfizer vow to get out Omicron-focused vaccines within 4 months.
How dangerous is Covid-19 in general? While 5.2 million people have died of the virus worldwide, statistics show that 263 million people have had it, with more than 237 million listed as “recovered.” That would make the mortality rate about 2%. Meanwhile, as of November 7, more than half of the world’s population, some 4.02 billion people had gotten at least one vaccine shot; 7.28 billion doses of Covid vaccine have been administered globally.
Despite such encouraging numbers the damage to world travel may not fade as we now must deal with yet another variant.
I have friends who will not go to the movies or eat in a restaurant, let alone get on a plane. A friend who used to travel internationally just bought a new trailer for hermetically sealed camping. Corporations like Google are once again delaying their return to the office.
Cancelled (or never booked) trips will continue into 2022. But unless we can somehow learn to cope with Covid-19 and its Greek alphabet of variants, the damage to the travel industry may be lasting.
published 2021-12-06 13:58:31