New Covid Omicron variant hits tourism and retail sectors

The pandemic has already cost the global tourism sector $US2 trillion in lost revenue this year, and news of the latest variant, Omicron, has sparked a collapse in travel bookings.

According to Flight Centre, over the past few days new bookings have dropped for both domestic and international, but people are not cancelling, just waiting. Picture: Nikki Short

The coronavirus pandemic, which has already cost the global tourism sector $US2 trillion in lost revenue this year, has sparked a collapse in travel bookings as news of the new variant, Omicron, spreads.

Meanwhile, big shopping centre owners have been among the most affected by the market turmoil that has hit stocks exposed to the Covid-19 pandemic. Unibail-Rodamco-Westfield, which owns Westfield centres in Europe and the US, plunged by 7.2 per cent as Omicron took hold.

Local owners were not spared, with Vicinity Centres, part-owner of the landmark Chadstone shopping centre, losing 5.1 per cent to close at $1.69 and Scentre, owner of the local Westfield empire, closing 3.8 per cent down at $3.04.

Flight Centre chief executive Graham Turner said Omicron has provoked a lull in new airfare and hotel bookings on the domestic and international fronts as nervous holiday-makers take a wait-and-see approach.

Flight Centre was heavily sold off in the morning but recovered to close just 0.8 per cent down at $17.00 on Monday night. Webjet also picked up late on Monday to close 2.6 per cent down at $5.21. Helloworld Travel lost 4.1 per cent to close at $2.

Flight Centre chief executive Graham Turner. Picture: Lyndon Mechielsen

In Sydney, Goldman Travel has sustained a few cancellations including the loss of a couple of business-class airfares and hotel bookings to South Africa valued at around $20,000. But Luxico, which rents out luxury houses over the festive season, is expecting a surge in domestic holiday house rentals as holiday-makers abort trips to Los Angeles or Europe at Christmas in favour of a stay on Sir Richard Branson’s Makepeace Island off Noosa for $18,000 a night plus tax.Meanwhile, the forecast $US2 trillion in lost revenue from the Madrid-based World Tourism Organisation comes as Europe is grappling with a surge of Omicron infections. Danish citizens are being forced back to wearing masks while Japan and Israel have banned entry to travellers as more Omicron cases emerge.

Flight Centre’s Mr Turner said Australia’s largest travel agency had noticed over the past few days that new bookings have dropped for both domestic and international, but people are not cancelling, just waiting.

“Basically it’s air and hotel bookings; I presume people just want certainty of what the reaction will be … people are waiting to see what pronouncements are coming from the government.

“Most news looks pretty positive it’s a milder disease and the vaccination probably still works … people are just waiting for what governments are going to do, and if there are more or less restrictions.

“As we have seen in Europe there’s been a few restrictions put on. And NSW feels like they have to do something.”

 

Luxico managing director Alex Ormerod, who has 300 luxury rental houses on her books, said she had not yet had any cancellations due to Omicron. “We will have to wait and see whether it will impact people coming from overseas to rent our houses. For us, the biggest impact has not been Covid-19, but the changing domestic travel restrictions. But I think this new variant might make people err on the side of caution and stay local this year. It’s too hard (to travel overseas).”

Shopping centre owners have ensured centres remained open throughout the crisis as essential services providers. But fears about the spread of the new variant could keep shoppers away from malls in the lead-up to Christmas. However, another outbreak could spur more online shopping, locking in the shift to e-commerce, potentially hurting the prospects of major malls.

The variant surprised the industry, which has seen a stabilisation in capital values after heavy initial falls when the pandemic broke out last year.

Additional reporting: AFP

Originally published as New Covid Omicron variant hits tourism and retail sectors