The S&P/ASX 200 Index (ASX: XJO) travel shares are suffering this morning as uncertainty rises again due to COVID-19.
At the time of writing, this is the current state of play for some of the travel players:
The Corporate Travel Management Ltd (ASX: CTD) share price is down 3.3%
The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 3%,
Next, the Webjet Limited (ASX: WEB) share price is down 2.2%.
The Qantas Airways Limited (ASX: QAN) share price is down 2.4%.
Helloworld Travel Ltd (ASX: HLO) shares are down 4.6%.
Image source: Getty Images
What's going on with the ASX 200 travel shares?
It's not just ASX travel shares that have been punished.
For example, Booking Holdings Inc (NASDAQ: BKNG) has dropped more than 11% since 9 November 2021. The Ryanair Holdings plc (LON: RYA) share price is down 12% from 5 November 2021. The Marriott International Inc (NASDAQ: MAR) share price has dropped 8% since 8 November 2021.
There has been growing concern as COVID-19 cases grow quickly again in the northern hemisphere, particularly Europe, as it enters the coldest months of the year.
Some countries in Europe are seeing record COVID numbers and are re-introducing rules.
For example, Belgium has increased rules on face masks and most Belgians have to work from home. Austria has gone into a full lockdown for a maximum of 20 days, whilst making it a legal requirement to get vaccinated from 1 February 2022.
Germany has been seeing record infections. Health Minister Jens Spahn described the situation as a "national emergency" and reportedly refused to rule out another national lockdown.
The BBC has reported that the World Health Organization has said that it's very worried about the spread of COVID-19 in Europe. Regional director Dr Hans Kluge warned that 500,000 more deaths could happen unless urgent action was taken. Mr Kluge said:
Covid-19 has become once again the number one cause of mortality in our region. we know what needs to be done.
What ASX 200 travel shares were hoping for
Corporate Travel recently said that its majority exposure was to regions with the most recovery, being North America and Europe. At the time of its AGM a month ago, Corporate Travel said that 83% of its group revenue was generated from North America and the EU. It specifically said the EU region was an outperformer due to the momentum of client wins and rapid re-opening.
Webjet said that the WebBeds business was profitable in July and August, and was on track to be profitable in September. It reported at the end of August that it was seeing strong demand as travel restrictions eased in North America and Europe, "suggesting significant upside as more international markets reopen."
International borders may not close
Whilst ASX 200 travel shares are heading downwards, it may not necessarily mean that there's less volume for travel businesses as there hasn't been much talk of limiting travel or closing borders.
For example, the BBC reported that UK Health Secretary Sajid Javid has said there are no plans to change travel rules between the UK and Germany because of the rising cases there. He said this was because Germany was dealing with the Delta variant:
We have Delta here already, I'm not sure there is much benefit in having more rules, but we do keep an eye out for any potential new variants.
