US-Schengen Travel Ban To Cost US Hotels $1.3Bn

On Thursday the US Trump administration took the unprecedented step to stop flights from the mainly-EU Schengen area in a bid to limit the country’s exposure to COVID-19. The Schengen area is collection of 26 countries in Europe that subscribe to a free-movement pact, and in 2019 represented between them almost 11m visitors to the USA.

The risks and economic effects of COVID-19 are everywhere, and particularly acute among them in this case is the country’s Hotel industry. We used our geo-data to examine the proportion of hotel guests from EU-Schengen countries as a share of all guests across the US’ major hotel brands to calculate the potential impact on the industry.

Share of US, Schengen & other US guests

We used our geo-data to compile the chart above that describes the proportion of hotel guests that are normally resident in either the EU-Schengen zone, or are resident in other parts of the world. The mean EU-Schengen customer share across this sample of 10 US hotel brands owned by publicly-traded companies whose primary exchanges are located in the US works out to 7.2%. The highest recorded in this sample is Westin (Marriott Inc.) at 12.26%, which almost on parr with its contingent of visitors from the rest of the world combined. The lowest are Hilton (2.35%) and Quality Inn (2.36%), owned by Hilton Worldwide Holdings and Choice Hotels respectively.

EU-Schengen restrictions to cost US hotels $1.3Bn

If we were to use the mean average figure for EU-Schengen hotel guests from across this sample, and apply that figure across the industry as a whole, the potential for lost revenue is significant. Using STR’s HOST P&L we can find the most recent US hotel industry annual revenue estimates of $218Bn (in 2018). Assuming that this March-April season accounts for at least the monthly mean average, we would expect this initial 30-day restriction period to be worth $18.2Bn nationally. Applying our 7.2% EU-Schengen share to that revenue estimate figure, we can therefore deduce that the cost of that action for the US hotel industry alone is worth $1.31Bn.

Of course, restricting visitors from the EU-Schengen area represents only one of many risks to the US hotels industry. Analysis of the impact that COVID-19 has had on the flow of visitors from other world regions has had may also a significant reduction in travel. Discover how our global geo-data products can help inform your business strategies and keep tabs on the market. Reach out to our new business team today to discuss your insight requirements and data evaluation needs.