As the coronavirus sweeps the globe, with at least 47 countries now battling the virus and the World Health Organization warning of its "pandemic potential", the tourism industry is presented with an unpredicted revenue management challenge.
The outbreak of COVID-19 means hotels, airlines and tour operators are contending with popular holiday destinations in lockdown, cancelled international sporting and public events and travel restrictions. Revenue management strategies must adapt to accommodate cancellations, re-scheduling, low occupancy rates and an unexpected decrease in future bookings.
Many revenue management strategies use artificial intelligence and technologies to predict and target revenue streams. The coronavirus challenges the current strategy and demands a more adaptable, pragmatic approach to revenue management based on trying to forecast how currently concerned tourists might adapt their future travel plans.
Travel industry companies are facing a material impact on financial results, which was not anticipated in recent forecasts. As the number of coronavirus cases continues to rise, it is impossible to tell how significant the economic impact will be and how long it will take the tourism industry to recover its financial health.
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