Since all of the U.S. theme parks and attractions first closed in March, the tourism and hospitality industry has been ravaged by the COVID-19 pandemic. Cruise ships were docked, parks were closed and hotels were shut down in an effort to stop the spread. Many still haven’t reopened, and those that have aren’t seeing the sort of attendance they’re used to. Today, for the first time in a long time, hope has been given to this struggling industry. Pfizer, a biopharmaceutical company, has announced their COVID-19 vaccine tests have proven to be 90% effective during trials.
While in the long term this is a positive for everyone, it was an immediate boost to the stock market, especially for businesses in the hospitality and tourism industry. We spoke to Ben Kebles, the former vice president of Student Asset Management Fund at Liberty University, to get his insight on this big change in the industry.
Kebles has studied the stock market for years, even choosing to heavily invest in these industries when they plummeted back in March of this year. “The S+P 500 opened up this morning up three percent while the Dow Jones Industrial Average is nearing a five percent gain,” said Kebles. “The Comcast Corporation [Universal Parks and Resorts] is up 7%, Disney is up 12% along with SeaWorld up 18% today alone.”
Kebles said it’s not just theme parks that are seeing a surge today. “You are seeing cruise line stocks like Royal Caribbean Group up 27%, Norwegian Cruise Line up 28%, and Carnival Corporation up over 37%. Airline stocks are up today as well with Delta Airlines up 16%, American Airlines up 17% and United Airlines up 20%. All of these gains in the cruise line industry and airline industry are from just today alone.”
Kebles said he thinks a lot of investors are optimistic and bullish on the prospect of a vaccine on the near horizon. He expects as the vaccine becomes adopted and easily accessible, more and more people will be traveling. “With more and more people feeling safe now that a vaccine is in place, more people are going to be willing to travel on a cruise ships and airplanes. All of this is good news for cruise line and airline companies as they can begin to make money again.”
The tourism and hospitality industry were affected more than others during this pandemic simply because of their nature. While the Disney+ streaming service has certainly helped The Walt Disney Company with revenue, the Parks, Experiences and Products division was given a hard blow.
Most of the travel industry requires just that, travel. This vaccine, once it begins distribution, should help to significantly decrease infections of the virus and ease travelers minds.
Many parts of the travel industry are reliant on each other. Guests who visit Walt Disney World have a high chance of visiting the Universal Orlando Resort and SeaWorld Orlando, and vice versa. To get to Orlando, a major portion of visitors fly there, helping the airlines. Some visitors extend their Florida visit with a cruise out of Miami, Tampa, or Port Canaveral.
Beyond the major theme parks and cruise lines, Florida and California are large tourism hubs on their own. Beaches, nightlife, museums, restaurants, and businesses large and small are greatly affected by tourism.
We are many months from being “back to normal” in the tourism and hospitality industry, but it’s encouraging that many hopeful investors choosing to invest in the future of travel.
Do you see this vaccine as a major turning point in this pandemic? Let us know in the comments below.