The travel cost of coronavirus

Analysis from Juniper Research has found that the impact of coronavirus on the international travel industry could cost telecommunications operators more than $US25 billion in lost revenue during the next nine months.

Juniper Research examined two possible scenarios: medium and high impact, believing a low impact scenario is no longer possible.

The high impact scenario assumes that a severe disruption to international travel will continue for nine months, with travel restrictions and a reduced demand for international travel continuing. In this case, the resulting impact on telecommunications operators’ international roaming revenue would be significant.

In the high impact scenario, Juniper Research believes that more than 650 million passenger trips will be cancelled due to coronavirus over the next nine months. This is more than 80 per cent of the anticipated international passenger trips that were previously forecast before the spread of the virus.

The research assumes that more than half of all roaming revenue for the year will be affected, amounting to $US25 billion in lost revenue. The research also highlighted, as of particular significance, the period between June and August when the demand for international travel is high.

It forecast that operators could lose up to $US12 billion in roaming revenue alone in these three months.

In terms of the overall impact on telecommunications operators, it must be noted, however, that global roaming revenue only accounts for approximately six per cent of total operator-billed revenue per year, limiting the hit on the industry.

Given the nature of the international travel industry, the research anticipated that there will be no strategies available to operators to mitigate this loss.

It forecast that services, such as virtual conferencing, will offer businesses an alternative to international travel, but will offer no benefit to telecommunications operators.

Additionally, the research highlighted that travel cancelled due to the spread of coronavirus is unlikely to be rebooked. As a result, this loss of roaming revenue is unlikely to be recovered once the international travel industry resumes normal service.

Are you worried that the loss of global roaming revenue could lead to higher prices for mobile phone use?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Related articles:
What not to do in a plane emergency
So much for social distancing
Hotels doing their part for COVID-19

Written by Ben


What not to do in a plane emergency

The investigation of plane crash reveals preventable deaths.

Sydney Airport footage shows a country at risk of COVID-19 infection

‘Home Affairs Minister Peter Dutton has some questions to answer,' says Labor Senator.

How hotels are doing their bit to help with coronavirus recovery

Hotels hope to help ease the burden on our struggling health system.