Companies are warning that they expect pandemic fears to harm their businesses as the Covid-19 Delta variant spreads. The hospitality and entertainment industries, in particular, are suffering as a result of the economic downturn.
Although economists do not expect a repeat of the types of shutdowns that crippled industries in 2020, businesses are concerned about the risks posed by the variant.
Here are a few of the businesses that have already expressed concern about the Delta variant’s potential impact on their bottom line.
According to a recent regulatory filing, Southwest Airlines (LUV) is seeing a decrease in bookings and an increase in cancellations this month. This pattern is “believed to be driven by the recent rise in Covid-19 cases associated with the Delta variant,” according to the airline. This contradicts the company’s July forecast that it would be profitable in the third and fourth quarters due to strong leisure travel booking trends.
The Delta variant, according to Airbnb, will cause travel disruptions. The company saw a drop in demand in July, which Airbnb’s chief financial officer David E. Stephenson blamed on the “summer peak” and the Delta variant during an earnings call. “We expect the impact of Covid-19, as well as the introduction and spread of new virus variants, including the Delta variant, to continue to influence overall travel behavior, including how often and when guests book and cancel,” the company wrote in its earnings letter to shareholders.
Disney’s (DIS) film and television productions, as well as park attendance, are suffering as a result of the Delta variant. “We continue to see disruption of film and television production, as well as live sports events, depending on local circumstances,” the company said in a recent letter to investors. And when it comes to park attendance, “The primary noise that we’re seeing right now are really around group or convention cancellations,” Disney CEO Bob Chapek said.
Norwegian Cruise Line
Norwegian Cruise Line has seen a drop in bookings due to concerns about the Delta variant (NCLH). During a recent earnings call, Frank J. Del Rio, the company’s president and CEO, stated, “We have seen a modest decrease in our net new booking activity during the month of July when the Delta variant has surfaced.” However, he is optimistic about the future. “We think this is a transitory, temporary phenomenon,” he said.