The Crown Resorts Ltd (ASX: CWN) share price has come under pressure and is tumbling notably lower on Tuesday.
In afternoon trade the casino and resorts operator's shares are down 4% to $11.55.
At one stage Crown's shares were down as much as 7.5% to $11.15.
Why is the Crown share price sinking lower on Tuesday?
Investors have been selling off travel shares today following concerns over the outbreak of coronavirus.
A number of cities in China have placed restrictions on travel in an effort to contain the virus. This, combined with the U.S. government's recommendation to avoid travelling to China, has sparked concerns that the travel market could be negatively impacted in the near term.
Other travel shares under pressure on Tuesday include Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB).
The latter is the worst performer on the S&P/ASX 200 index. Though, some of its underperformance can be attributed to the online travel agent copping a broker downgrade this morning. This was due partly to concerns that Google could be stealing market share away from its B2C business.
Casino shares sold off.
In respect to Crown, it has come under pressure today after U.S. casino stocks were sold off overnight. There are concerns that the coronavirus could limit the number of Chinese VIPs visiting casinos across the world.
This would be bad news for Crown as Chinese VIPs contribute meaningfully to its profits. If they don't travel to Australia it could create a gap in its earnings in the near term that will be hard to fill.
Fellow casino and resorts companies SKYCITY Entertainment Group Limited (ASX: SKC) and Star Entertainment Group Ltd (ASX: SGR) are also nursing sizeable declines on Tuesday.
