Expedia pulls 2020 forecast as coronavirus upends travel plans

(Reuters) - Expedia Group Inc EXPE.O on Friday withdrew its forecast for 2020, a further sign of deepening worries for the global travel industry ravaged by the coronavirus pandemic.

FILE PHOTO: Barry Diller, Chairman and Senior Executive of IAC/InterActiveCorp and Expedia, Inc., attends the annual Allen and Co. Sun Valley media conference in Sun Valley, Idaho, U.S., July 11, 2019. REUTERS/Brendan McDermid

The online travel services company’s shares fell about 9% to $58.89.

The outbreak, which spread globally since first detected in China last year, has infected almost 135,000 people and killed more than 4,900 worldwide, forcing several companies to suspend their financial outlook and borrow money.

U.S. President Donald Trump’s ban on travel to Europe, a two-week quarantine of on-board cruise passengers are some of the many incidents that have spooked travelers in the past few weeks as the virus spread quickly in the United States, killing over 40 people.

“As COVID-19 has rapidly spread from Asia to Europe and North America over the past few weeks, travel trends have continued to worsen,” Expedia Chairman Barry Diller and Vice Chairman Peter Kern said in a statement.

“It remains difficult to predict how long this pandemic will persist.”

Over the week, leading U.S. airlines and hotel operators ditched their 2020 forecasts and said they were taking actions from limiting capacity to closing hotels and borrowing money.

Carnival Corp's CCL.N Princess cruises, two of which were quarantined off their destination ports after some passengers had tested positive for coronavirus, suspended operations for two months on Thursday.

STR, which provides data for global hospitality sectors, said U.S. hotel occupancy fell 7.3% to 61.8% from March 3 to 9, with revenue per available room, a key metric, declining 11.6% to $77.82.

“The question over the last several weeks was ‘when’, not ‘if’ this impact would hit — well, when has arrived,” said Jan Freitag, STR’s senior vice president of lodging insights.

Some of the worst coronavirus-affected areas were San Francisco, San Mateo, Anaheim and Santa Ana in California, Seattle and New York City, according to the report

Home rental company Airbnb Inc’s bookings globally also took a blow.

Expedia forecast a bigger impact on first-quarter adjusted EBITDA, compared with the $30 million to $40 million hit it had estimated last month.

In February, Expedia said it would not give a specific forecast, citing uncertainty on how much cost savings it would recognize in the year due to the health crisis.

Expedia and rival Booking Holdings Inc BKNG.O, which also abandoned its forecast, have lost more than a third of their market values from the start of the year.

Reporting by Nivedita Balu and Uday Sampath in Bengaluru, Editing by Sherry Jacob-Phillips and Maju Samuel