Tourism is 10% of GDP in France, 13% in Italy, 15% in Spain. And Now it’s in Free Fall

“If the situation of generalized panic continues, thousands of businesses, especially small ones, will first enter a liquidity crisis, then close their doors.”

By Nick Corbishley, for WOLF STREET:

This is all happening just weeks before high season is about to get under way. But with millions and millions of tourists voting with their feet by staying at home, one of Europe’s most important and (until four weeks ago) fastest growing industries is taking a hammering.

The world right now is full of places that should be teeming with people but are not, including many iconic tourist landmarks and attractions. In Italy, home to Europe’s third biggest tourism industry, large parts of the country are on lock down after being hit by the biggest outbreak of the COVID-19 outside of Asia. Many of the most famous tourist attractions have been closed and big international events, including the Venice Carnival, have been cancelled.

The impact on the country’s tourism industry has been brutal, prompting panicked representatives to warn that a “generalized panic” over coronavirus could “sink” the sector. “There is a risk that Italy will drop off the international tourism map altogether,” said Carlo Sangalli, president of Milan’s Chamber of Commerce. “The wave of contagions over the past week is causing huge financial losses that will be difficult to recoup.”

Even by late February, when the outbreak was still in its infancy, €200 million worth of travel and accommodation bookings in March had already been cancelled, reported Italian tourism association Assoturismo Confesercenti. That figure, based on data provided by Italy’s hotels, B&Bs and travel agencies, doesn’t include lost tourist revenue for transport, tour guides, bars, restaurants and shops. Bookings are also “sharply down” until June.

In the three most affected regions — Lombardy, Veneto and Emilia-Romagna (in descending order) — cancellation rates on bookings of hotels, flights and apartments have reached as high as 90%. These three regions also happen to be the main motor of Italy’s economy, accounting for 40% of Italy’s GDP. The country’s financial capital (and capital of Lombardy), Milan, is like a ghost town, with many of its most important landmarks, including the Teatro alla Scala opera house, closed to visitors.

“In recent history Italian tourism has never experienced a crisis like this,” Vittorio Messina, National President of Assoturismo, stated in a press release. “It is the darkest moment. Not even 9/11 affected it so heavily.”

The industry group Confturismo- Confcomercio has forecast that the sector, which accounts for 13% of Italian GDP, will suffer total losses of €7.4 billion in the second quarter. It’s the small businesses that are most at risk, warns Messina: “If the situation of generalized panic continues, thousands of businesses, especially small ones, will first enter a liquidity crisis, then close their doors. We urgently need to work towards normalization.”

This unprecedented slowdown of a sector as vital as tourism does not bode well for a country whose economy has barely grown for 20 years and whose banking sector continues to be plagued by systemic problems, including dangerously high levels of non-performing loans (NPL). While the NPL ratio has fallen from a peak of 17% in late 2015 to 8.2% (in September 2019), its still way too high for comfort. In the coming months it’s likely to undergo a sharp resurgence as businesses and households struggle to generate enough income to cover their liabilities and service their debt. And that is the last thing that Italy’s already fragile financial sector needs.

In Spain, tourism is even more important to the national economy, generating approximately €180 billion a year — close to 15% of GDP. In 2019, Spain was the second most visited country in the world, attracting 83.7 million foreign tourists.

In Barcelona, thousands of tourist-dependent companies have already had to forego the lucrative spoils provided by the Mobile World Congress, the world’s biggest annual mobile trade that last year attracted 100,000 people from all over the world, generated around 14,000 temporary jobs, and produced close to €500 million in revenues for the City. But this year, the event was cancelled after dozens of participating companies pulled out over fears about the coronavirus.

The virus has also been a big blow for the city’s luxury and jewelry sectors. Until recently, Chinese visitors accounted for around 40% of all purchases on the Paseo de Gràcia promenade. Last year alone, those purchases grew by 16%. February and March are normally the busiest months for arrivals from China, Japan and South Korea. But this year, they are conspicuously absent. According to some forecasts, the luxury stores on Paseo de Gràcia, which pay eye-watering sums in monthly rent, could suffer a 50% decline in sales as a result.

As the number of cases of the novel coronavirus in Spain rises, attention is turning to Easter, one of the busiest weeks for the nation’s tourism industry. That industry was already battered by the collapse late last year of the global tour operator Thomas Cook, which prompted the government to bail out the sector. But that wasn’t enough to prevent consecutive year-on-year drops in the number of tourist arrivals in both December and January. In the destination most dependent on Thomas Cook bookings, the Canary Islands, tourist arrivals fell by 5% year over year in January.

That was before the Coronavirus had officially arrived in Europe. Now that it is spreading at an alarming rate, March has been all but written off by Spain’s tourism industry. The initial signs for Easter are not good either. Hotel bookings last week were down by a fifth on the same week last year. In the Canary Islands, they’re down by as much as 30%. Sources from the industry have also detected a year-on-year collapse of almost 40% in the number of Internet searches for flights, trips and hotels.

France, with 89 million tourists in 2018 (last year’s figures are yet to be released), the most visited country in the world, is also feeling the fallout from of COVID-19. Tourism contributes about 10% to GDP. France’s Finance Minister, Bruno Le Maire, said two weeks ago that the outbreak had triggered a 30%-40% plunge in the number of overseas visitors. At that point, the virus was barely present in the country. Now, it’s in all 13 of France’s metropolitan regions, as well as French Guiana.

This is all happening just weeks before high season is about to get under way. But with millions and millions of tourists voting with their feet by staying at home, one of Europe’s most important and (until four weeks ago) fastest growing industries is taking a hammering. By Nick Corbishley, for WOLF STREET.

At first the protests and now the coronavirus collide with the World’s Most Expensive Property Market. Read…  Hong Kong’s Real Estate – Housing, Office & Retail Properties – Face “Tsunami-Like Shocks”

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  232 comments for “Tourism is 10% of GDP in France, 13% in Italy, 15% in Spain. And Now it’s in Free Fall

  1. GotCollateral says:

    Hmm, sounds like a opportunity for some billionare(s) to invest in VirusAir, to ship the inffected to spend their money at shops ran by local infected and stay at hotels ran and staffed by the infected, at least that way the ECB can buy the 0 coupon junk that will most certainly be issued and continue the game!

    • Reality says:

      Too bad these once great nations (Italy, Spain, and France) cannot compete economically because of their high taxation rates to support their failing socialist governments that they are forced to whore themselves out to Chinese tourists. They should take a page out of Trump’s playbook and at least try to Make Europe Great Again instead of Making Europe the Middle East and African Toilet Forever.

      • Seriously says:

        There’s nothing wrong with tourism as an industry. These are beautiful countries and people want to visit. They have plenty of industry, too. I routinely purchase industrial gearboxes from Italy for use in American made equipment. American suppliers cannot compete.

        • Realist says:

          The lockdown of northern Italy will indeed be felt because northern Italy is the industrial powerhouse of Italy. I wonder how long it will take before industries across Europe and elsewhere will shut down due to end of deliveries from Italy, maybe a week, two at most, I suppose.

        • Good point, a lot of tourism is really business. Chinese come to LA to see Hollywood and leave with a million dollar home.

      • Sara Racano says:

        Spain is far from socalist

        • Juan Pueblo says:

          That is the biggest problem in Spain, which not even its own citizens know that they live in a socialist country. You have to ask permission and pay fees for everything. The vast majority only aspire to a job in government

        • Deanna Johnston Clark says:

          Yes, the US is more Socialist than many “socialist” countries…especially when you add the price supports and bail outs and farm subsidies to agribusiness, which includes SNAP which is a big govt. support to Lays, CocaCola, cereal companies, Walmart, Krogers….the very mention of cutting SNAP cards and the agri-soda-corporations stocks go down…probably Walmart, etc. as well.
          Socialist is as socialist does!!!

      • Jos Oskam says:

        I must say that you have quite a nerve, calling out failing “socialist” European governments while mr. Trump continues to let American debts and deficits rise to absolutely eye-watering levels.

        By the way, the day that France is going to take pages out of Trump’s playbook is the day I’m going to turn in my citizenship.

        At least people here are not going bankrupt when they need a hospital visit or a dose of insulin.

        • Zantetsu says:

          I agree with you Jos. “Reality” (oxymoron) doesn’t speak for all Americans. It’s embarrassing how some of my fellow citizens feel the need to criticize other systems/countries when ours is so clearly screwed up in so many ways.

        • Harvey Mushman says:

          Jos Oskam: I’m an American citizen and I agree with you.

        • Balzac says:

          The debt clock just keeps spinning higher and higher. Last Thursday when Trump signed the 8.5 billion dollar emergency aid bill, the nation’s debt increased another 40 billon dollars that day alone.

        • Wolf Richter says:


          The “Debt Clock” is based on some guy’s aglo, and nothing more. It’s a fun thing to look at because of all the flickering numbers. Makes nice theater.

          But the actual US government debt increases each time new Treasury securities are issued, and it decreases each time old Treasury securities mature and are paid off. The net effect is the total US Treasury Debt outstanding … it goes up and down, with the long-term effect of skyrocketing. As of the end of last week, the US gross national debt stood at $23,469,159,863,224 ($23.47 trillion). The US Treasury Department updates this every day, and you can go check it out every day.

          Here is my chart of the ACTUAL US Treasury Debt outstanding. Note the effect of the debt ceiling — the flat horizontal lines:

        • Reality says:

          I do have quite a lot of nerve. And your little temper tantrum doesn’t change the fact that France and specifically Paris is quite literally the toilet of the Middle East and Africa. Enjoy your passport. And sadly Europe will never be great again. But please enjoy your new neighbors. As for debts, please enlighten me as to which president in America or any other western country has ever lowered its national debt or even stopped its national debt from rising for any meaningful period of time? France’s debt to GDP was less than 60% in 2000 and now it is over 100%. So what exactly are you preaching?

        • Louis McFadden says:

          Wow…and cue the ignorant DNC talking point from an NPC that is unable to think for themselves

          The Budget is 60% Soc Security Medicare/Medicaid 10% Interest on Debt

          Where exactly has the “Debt” risen to “eye watering levels”?

          You do realize that you are calling for a cut to Social Programs?

      • Thomas Roberts says:


        There is still a lot of manufacturing in those countries, and China for 5+ years now is losing an increasingly large amount of its manufacturing to the rest of Asia particularly Vietnam and India. What is needed for europe and America is planned mutual protectionism.

        The migrant problems are a political problem. And America has its own migrant problems that started under Regan “who decriminalized giving illegal immigrants housing and jobs, Regan also established sanctuary cities”, unless trump reverses these laws, he is only giving lip service to immigration reform. Also illegal immigration was already slowing before trump became president.

        • cb says:

          Thomas Roberts said: ” Regan “who decriminalized giving illegal immigrants housing and jobs, Regan also established sanctuary cities”, ”

          Proof please, especially about Regan establishing sanctuary cities.??

    • mike says:

      I wish that were possible, but there are probably already too many to transport rapidly enough to help. A cordon sanitaire alternatively might work.

      It is clear that this US administration has decided to try to ignore the coronavirus infection (by downplaying the fatality rate, the infectiousness, and purposefully not doing enough testing to detect and quarantine the infected individuals) and hope that the epidemic will be stopped by the warming spring or summer heat. I pray that they are right.

      In fact, they are probably making a bad bet to judge by infections in other countries. As many commentators on this and other articles point out, instead of doing a worse job due to fewer resources and greater risks due to their population concentration, countries like South Korea are showing the USA up with their competent government and single-payer health care systems.

      The current US administration apparently does not even understand the coronavirus’s exponential growth or maybe even understand mathematical exponentials. Even if the warming spring or summer manage to keep the virus from infecting and overwhelming the health care systems in all US states, coronavirus will very likely overwhelm hospitals and health providers in Washington and other states with exponentially-growing, community-spreading, infections, whose total size is not known, because the US has chosen not to conduct extensive testing by discouraging it and making such testing effectively unavailable for most.

      Simply put, even with a relatively low number of infected needing hospitalization, the exponential growth of Coronavirus (particularly with no effective measures being taken in the US, not even masks for the public, so its R0 will be 4-6 or more) makes it likely that there will not be enough resources in infected areas (ventilators, oxygen bottles, etc.) to treat all infected patients needing critical care before the warming weather slows the growth of coronavirus. (I devoutly hope that it does really slow it down or this administration will be responsible for the death of thousands or tens of thousands of Americans or maybe, many, many more.)

  2. TownNorth says:

    Maybe not so good for Airbnb either. People that bought condos with mortgages in travel destinations (Hawaii, Tahoe etc.) and needed bnb revenues will have to cover the shortfall.

    • Wolf Richter says:

      Yes, this plunge in tourism scrambles the math of a lot of people that don’t make it into the official stats.

      • nick kelly says:

        As up to date as this post is, I hear it has been overtaken by events. Travel in and out of Lombardy is now banned, as are most public meeting places, including museums, theaters, sports arenas etc.

        • nick kelly says:

          Not on topic but given the likewise rants I’ll stick it in anyway as I recall this topic interests Nick Jr.
          From Goldman:

          ‘once Brent craters on Monday to the mid-$30s or lower, the accompanying implosion in 10Y yields could make the record plunge in yields seen on Friday a dress rehearsal for what could be the biggest VaR shock of all time. And since QE will only send yields even lower, perhaps it’s time for the Fed to add oil futures to stocks among the expanded securities it plans on purchasing as part of QE-5 to avert the next deflationary crisis which may have just started.’

    • mike says:

      Yep. It is not helped by the incompetence of many governments, which destroys the faith of prospective travelers that their safety is assured, e.g., the current US government.

      Apparently, even millionaires cannot get tested, because the government in the US now is too incompetent even to test those who can easily afford to pay for it.

      • unit72 says:

        Testing is not a panacea. It is only going to be done on those who are exhibiting symptoms or who have been exposed to people known to be infected. It does not confer immunity so a negative test result is only for that moment in time. You can leave the doctors office, get on the elevator and, absent mindedly, press the down button with a bare finger and you may just have infected yourself.

        Unfortunately, the only way to stay uninfected is to impose an absolute quarantine on yourself. Not an easy thing to do especially since the threat may linger for months.

      • Erich says:

        You’re missing the point. The current policy is “don’t test, don’t tell”. Part of it is to not cause panic (which will happen anyway … been to Costco lately) and the other MORE important reason is not to spook Wall Street. Can’t have that happen now can we? If we bury our heads in the sand maybe it will just go away ….

      • robt says:

        The resources required to apply the precautionary principle, if applied to every hypothetical threat, would overwhelm all resources required for daily existence.
        Even the ‘annual flu shot’, (only presented as an example) which is based on a forecast of an unknown evolved threat is widely criticized as a waste of money and resources, and often proves ineffective because the forecast fails.
        When an actual threat occurs, all that can be done is to respond. The Chinese draconian reaction, of course criticized in its early implementation for its severity, seems to have been effective. The US government’s response a month and a half ago, to restrict flights from infected hot zones, and of course criticized at the time, seems now to have been appropriate.
        Criticism of further response and action now falls into the realm of political posturing and opportunism.

    • MC01 says:

      Florence is “ground zero” for Airbnb in Italy: if I remember correctly about 40% of the real estate market there is exclusively buy to let (B2L).
      It’s a big political issue, not unlike in Barcelona, and just like there authorities have tried to ignore the problem, somehow hoping so much money would pour into the city as to shut critics down.
      Things haven’t turned out that well, and a bailout of any sort for the B2L sector (notorious for the extremely high level of tax dodging, with full backing from the government) would cause political tensions to explode in a city the ruling coalition just cannot afford losing.

    • Iamafan says:

      I worry about this, too. So many condos were sold around the world with the assumption airbnb type rent, would pay the mortgage. That income stream is missing now, so many mbs types of securities are going bust if this keeps on.

      • doug says:

        Maybe common man will be able to rent long term after this event?
        The marginal BnB buyers will perhaps be sellers soon.

      • Abomb says:

        So maybe real estate will return to affordable levels when rental owners get the fear and run for the exit.

        • c smith says:

          “So maybe real estate will return to affordable levels…” This cannot happen because it would destroy the financial system. The extraordinary monetary policies of the last decade (QEn, etc.) were ALL put in place to prevent it.

    • Mikey says:

      I have not received a single Airbnb reservation request for two weeks. I usually get ten a week ( near nyc). Local hotel prices (hotels. Com) look down about twenty percent.

  3. Paulo says:

    My wife was telling me awhile ago about her first visit to the Louvre, late ’70s. I think she said there were maybe 10 people looking at the Mona Lisa and she could walk right up to it. It was when the backpacking thing was all the craze; hostels, rail pass, etc Fast forward to an article I read about Peak Tourism at the dentist office in Natl Geo last month. There were photos of hundreds of people trying to get a similar look at Mona, and of course security was everywhere and all things roped off. I read in the same article Iceland has 7X as many tourists as citizens, and they have to block off popular venues. Spain has active protests against the onslaught of tourists. How is this a good thing?

    The Covid-19 threat is very concerning. However, perhaps a reduction in tourism will be a silver lining for the environment and citizens. There has to be a better way to make a living for destination residents. Who knows what will happen? If there is no employment opportunities going forward look for massive unrest and property seizure. People won’t stand for the ‘few’ owning everything with no thought for fellow humans, especially when they have no work.

    People won’t put up with it. If this entrenches look for mass unrest and dislocation. There will be no patience for false promises made by power seeking hollow politicians. There will be even less patience for wealthy tourists taking advantage of cheap travel opportunities, virus or no virus.

    • 2banana says:

      All these places were complaining about the tourists too…how dreadful they were. Insufferable…

      You know what’s worse than having too many tourists? Having too little tourists. Especially when your economy has no backup plan…like manufacturing.

      “The wave of contagions over the past week is causing huge financial losses that will be difficult to recoup.”

      • Wolf Richter says:


        These are two different sets of people: the locals that pay the price for mass tourism complain that there is too much mass tourism; and the businesses and people that make money off mass tourism complain if there is not enough mass tourism. Now, the first type is happy, and the second type is unhappy.

      • Prof. Emeritus says:

        I concur – having little tourists is still better. High-quality tourists prefer sparesely visited areas. They don’t just pay better, but won’t spoil places with high cultural & behavioural standards leaving them almost untouched after they leave.
        Also – Italy is actually pretty good in manufacturing, but their manufacturing hub is in the same place as their tourism hub which just got closed down. But I don’t think Italian hotels will really have to compete with the French or Spanish this year. They will all suffer the same way (even if they get clean they won’t allow in visitors from still infected countries to also remain clean).

      • HollywoodDog says:

        It’s “too few tourists.” It’s only when they’re not tall enough for the ride that it’s “too little tourists.”

      • rhodium says:

        Few people work in manufacturing anymore except in impoverished countries where meat robots are cheaper than metal robots. Manufacturing is undergoing a new evolution of additive manufacturing, cobots, solobots with progressively better adaptibility, all getting cheaper with better sensors and learning algorithms that are going to put even the cheap meat robots out of a job. Manufacturing in the next couple decades will look just like agriculture with very few people employed in it. The job growth will be for technicians and engineers that actually know how to solve problems in these environments (rare individuals). Goods will be cheap, but where the jobs for the rest of the populace will be I have no idea (although with this technology I’ve noticed a proliferation of companies selling engineered hardware that need to employ a good number of service representatives to field questions and handle issues). Either way I assume they will have to use their brains, but this will be a struggle for many.

        • 2banana says:


          Germany has a trade surplus with China.

        • Erle says:

          Please give me a break. Manufacturing consultants at the shop floor level are clueless. If one would want to add unproductive costs then they could be viable.

    • No Expert says:

      Yes a dramatic fall in tourism is a big win for the natural environment (the thing humans rely on to you know – exist).

      However ‘people wont put up with X’ argument is weak. Why do you think we have police?

      • Gold is says:

        Exactly! Why should the peasants be allowed to see the Wonders of the World..just who do they think they are? Darned impudence if you ask me…

        And of course it’s the travelling peasants who largely have imperiled the Natural’s all peasant made climate change, as you know.

        Go Greta girl, go!

        • OSP says:

          How dare you…

        • backwardsevolution says:

          I don’t think that climate change is totally man-made (probably more cyclical), but we humans are no doubt adding to it.

          My concern is we’re going through the Earth’s remaining oil like there’s no tomorrow. Never mind the huge cargo ships carrying goods coming all the way from China (so corporations can make a few more dollars), but everybody and his brother has just got to see the Pyramids. Nobody seems to think about their own grandchildren who might actually need some oil in their lifetimes too.

          I remember reading an article about Barcelona and the problems they were having with bnb’s. Many foreigners had bought these bnb’s and they were renting them out to foreign tourists, and the locals were being displaced and many said it was destroying their city.

    • Gold is says:

      “People won’t stand for the ‘few’ owning everything with no thought for fellow humans, especially when they have no work.”

      I thought that was already a ‘fait accompli’

      • Mark says:

        “People won’t stand for the ‘few’ owning everything with no thought for fellow humans, especially when they have no work.”

        Oh really ? This statement is just about the Fed official motto – It’s all about protecting The War Party Of The Rich”.

        This is a fait accompli in the USA. Way too late to just notice now,

    • Xabier says:

      In many places in Spain, at least, there is no better way to make a living, nor ever will be.

      Many families can only survive with the income surge of the tourist season.

      Unrest? Probably not, just apathy, depression and slow suicide.

    • Mikey says:

      Way too many people flying around to take pictures for Facebook.

      • Greg Hamilton says:

        That’s an interesting comment and reminded me of critics of the Japanese tourists of the 1980’s. Critics said those tourists weren’t interested in the places they visited per se, just in taking pictures of themselves in those places. I think we are all turning Japanese now. I really think so.

    • cb says:

      at Paulo: “There has to be a better way to make a living for destination residents. ”

      as any successful Capitalist can tell you, the is no better way to make a livig than rent. Isn’t that the end game of Capitalism?

    • cb says:

      at Paulo: “There has to be a better way to make a living for destination residents. ”

      as any successful capitalist can tell you, the is no better way to make a living than off of rent.

    • Colem says:

      The Mona Lisa? All we could see on an August weekday was a sea of arms and hands holding icameras aimed at the painting which as about 120 feet away, the closest to it that we could approach. Love the new “exit through the giftshop” at the Louvre, you’re directed through an expensive underground shopping center with an Apple, Microsoft Store, various jewelers and other debt inducing vacuum cleaner establishment, to finally exit on the Rue Rivoli.
      Concur, Paris was an art and architecture gem, but demographic sewer full of North Africans, Gypsies, dog shit, and smokers everywhere. Spain is a much cleaner and better bargain. Far better infrastructure, like high speed trains than France as well.
      Highly Recommend Seat 61 for all train bookings anywhere in Europe. Those people should be put in charge of America’s health care delivery and many other things.

  4. Iamafan says:

    Who really wants tourists now? Even the tourists don’t want to be tourists. If coronavirus hits me, I’d rather be home. Sorry, business just has to suffer and we pay the consequences.

    • Anon1970 says:

      If you go to a foreign country that suddenly gets put on a US quarantine list, you may have to spend 2 weeks at a run down US motel at your expense before you are allowed to go home.

      • Iamafan says:

        Yup. My brother is on Asia now for business. He flew Korean Air. He is worried he cannot get back here.

    • Gold is says:

      ‘….Sorry, business just has to suffer and we pay the consequences….’

      Depression, collapse and bang goes your pension and everything else.

      PS did I miss your sarc Ima? In which case I’ll add an /s to mine

      • Iamafan says:

        Yup we the people always end up losing.

        • Mark says:

          “Yup we the people always end up losing.”

          Naw just choose which vulture capitalist War Party billionaire lever best suits your family’s needs ….

          Then you pull it. Ah, Democracy. Winning

      • fajensen says:

        Depression, collapse and bang goes your pension and everything else.
        Things were going to end up that way all the time, might as well get there faster so we have more time to deal with it!?

        Maybe we can deal with a couple of squillionaires too while we are making a mess?

  5. Ron says:

    off topic: MSFT, Google, Apple are telling employee’s to work from home the next two weeks. No travel. Elk Grove School District. (Sacramento) has shut down classes for the next two wks.

    • Bobber says:

      What a large corporation says is one thing; what it expects is another. It’s like when your boss says “take the weekend off”, yet he’ll be enraged if the work is not done by Monday.

  6. WES says:

    I suspect many European tourist spots will suffer less than many other tourist places around the world.

    Mainly because people within Europe don’t need to fly in airplanes to get around much of Europe.

    But tourist places that are 100% dependent on foreign air travel, are likely to see closer to 100% drops in tourists.

    Only those who have already got the coronavirus and fully recovered, will feel it is safe to travel again and they will be rewarded with great travel discounts!

    • Anon1970 says:

      I have read that those who were infected by the virus and fully recovered can get it again.

    • Mike G says:

      I wonder when Hawaii will get hit. Big numbers of the infected in Japan and Korea which are major sources of visitors for them — and flights are still running.

      • Iamafan says:

        That’s will the big ‘volcano’ they were waiting for. A black swan of another kind.

      • KGC says:

        Already happening. Discounts on flights to Hawaii are already out. Hotels have room. I have not heard about flights being canceled or refused landing, but I expect that’s happened. And the cruise ships are almost at the point of paying you to take a Hawaii cruise. I’ve been offered prices of 50% discount. Airfare as low as $99. I’m expecting a email from Marriott blowing out room packages…

        This is not a short term thing, and it’s seriously going to impact the world more than most folks realize. Russia and the OPEC nations are going to have to get revenue from somewhere to keep their economies afloat (petrodollars impact the world even more than tourism does) and they’re already cutting prices to try to boost cash.

        It’s only been a couple months, what’s going to happen when this drags out a year or more? We may very well see regime change and global depression.

        • Shiloh1 says:

          I just speculating, but I think Vlad has the best tolerance for long-term, low cost oil, and < $32 bbl will but under Iran, Saudis, Canucks and U.S. shale / fracking – and their lenders. Conditions are very ripe for a false flag incident in Middle East, however. Follow the money.

    • Frederick says:

      That’s true I fly to Warsaw ever summer for business but this year I’m planning to drive and stop in Tuscany to visit family on the way I’m starting from SW Turkey near Rhodes Island Greece

      • Gold is says:

        I travel to Europe from Australia most years..but what with petri- dish airplanes, ships & probably trains & coaches, I’m planning to go by motor bike this year.

        Wish I hadn’t sold that Triumph 650 back in the day.

        • Ook says:

          Care to explain how you plan to take a motorcycle across the ocean between Australia and Europe?

        • Wolf Richter says:


          I thought Gold is’s comment was purposefully hilarious. My kind of humor … such as including the completely irrelevant detail of what type of motorcycle (his old Triumph that he no longer has) he’d like to use to ride across the oceans.

        • Colem says:

          You know, those water wing flotation paddles that attach to the wheels don’t really work that well. They forgot about the clearance between the frame and the outside of the tires.

  7. Keith Brodie says:

    What I find strange is the talking heads chattering about a modest reduction in GDP growth globally. That’s just insane. Real GDP must fall in 2020. Tourism, shipping, auto sales, sporting events, restaurants, airlines, rail travel, cruise ships, movie theaters…

    When everyone stays home the velocity of money is zero.

    • David G LA says:

      I agree. It’s seems they are living in LA LA land when they make statements like these. I guess one can hope…

    • unit472 says:

      Not necessarily. If you can’t visit Europe you could buy a Brioni suit, a Hermes bag or a Ekornes chair from Sweden. So instead of just memories you’d have something nice and employ locals making those products.

  8. Pilgrim says:

    Maybe it’s time people slowed down. All this running to and fro, and then crying about polluting the environment. Trips used to be special yearly affairs (in the classical sense), with exceptions. Also may be good for housing market to get back to sanity.

    • Frederick says:

      Absolutely regarding housing I’ve been waiting what seems like forever for this absurd bubble to deflate and no I’m not interested in Connecticut real estate

      • c smith says:

        “Absolutely regarding housing I’ve been waiting what seems like forever for this absurd bubble to deflate…”

        Won’t happen. You see, they have a printing press…

    • sc7 says:

      If this outbreak causes remote work to stick more in places, as a lot have suggested, that could have serious real estate value implications.

      Imagine SF, NYC, Boston etc. real estate if you can work for companies located there, but don’t have to live there? These inflated markets could tumble big time.

  9. Saylor says:

    The knock on effects of this I believe will be tremendous. Italy has just for all intent and purpose quarantined 16 million people.
    Imagine any country losing such a large percentage of GDP?
    It won’t just be airlines that suffer this. Euro rail will probably become ‘ghost ships’ also.
    And I’m not so sure it will be all roses for the environment and for the locals. Both have come to enjoy the monetary support of all this traffic. Withdrawal will be more than just ‘painful’.

  10. Saylor says:

    I remember when the Soviet Union collapsed there being photos of nuclear subs being beached due to lack of money to pay for maintenance and troop support.

  11. William Smith says:

    Ever since religious nutcases caused massive increases in security checks, travel has become more and more inconvenient. The fact that many airlines were already hanging on by an overleveraged thread shows that the whole sector was already poised on a knife edge to oblivion. Relying on one industry is being revealed as very foolhardy and lazy (or corrupt). There was simply no “fat” left in the system and an event of some kind was bound to happen and cause systemic collapse eventually. In an age of instant global video communication, physical travel is of far less utility. I see this current thing as merely a properly functioning market adjustment to circumstance. And as the corrupt central banksters continue to blow their impotent loads at the brick wall of reality, the “everyman” everywhere will finally see the “emperors” as they really are: without any clothes (of credibility). It also speaks to the greater issue that current economic theories/practices are badly in need of some serious and fundamental revision.

  12. Prof.Emeritus says:

    Important news: Northern Italy (Milan, Venice, Modena, etc.) locked down for a month.

    • MC01 says:

      These are drafts of decrees. I’ve seen plenty of stuff just as crazy if not crazier which got revised before becoming law or being completely rewritten.

      If we shut down the German car industry shuts down, as easy as that. You cannot build a car without a radiator, suspension arms, wheels or engine mounts, and guess where those things are made.
      The automotive sector has been somehow able to avoid layoffs for now, but things have been going downhill at least since last Spring and in December and January looked downright bleak.
      The German government doesn’t like layoffs in their automotive sector, especially during an election year, but what can they do if parts stop arriving?

      There’s also the issue of tourism: back in 2017 the German government tried (and failed) to bail out Air Berlin, and they are currently keeping Condor afloat. Both are leisure airlines: their sole line of business is to ferry tourists to their destinations and back. We are getting to the point where governments have to guarantee people can board a cheap flight to Barcelona, Naples or Split, of course after lecturing them at length about “emissions”. What happens if the Northern Italian lakes, huge favorites of German tourists (especially Garda) are shut down? No more vacations during an election year.

      These are just two issues that will have to be weighed before signing that stuff into law.

      • Prof. Emeritus says:

        As far as I’m concerned it’s already been signed during the night, the draft was leaked at the evening around 9 PM, but at 3AM a press conference it was treated as pretty much official.
        Also, those were my first thoughts as well: on the German side there were some “Italian-shaming”, politicans and press reasoning that mainly the Italians are responsible for the quick spread of virus by their lax behaviour and bad healthcare system, so the Italian government may be trolling and wants to send a message to the rest of the EU by stopping their industry for a month. Maybe that’s even a good way to get rid of the ECB and switch back to lira.
        But alas – that’s wild even for a conspiracy theory, at the moment it seems the situation is really that dire.

      • andy says:

        I gave up my german car because US dealers see us as easy prey. German automakers better take notice.

        • c smith says:

          You don’t have to buy your Mercedes or Beamer from a dealer – or take it there for service. Buy a used one and find a reliable mechanic who has the computer codes to service it. Not that hard.

  13. james wordsworth says:

    The US has been lucky so far that it did not get any of the initial spikes in cases coming from China. But it i very poorly positioned if COVID-19 does start to get established. The fragmentation and cost and unequal access to health care make it a ticking time bomb. Add in an incompetent leader that distrusts facts and science and you have a recipe for disaster.

    In comparison look at Taiwan. They got hit early but took it super serious from the get go. They blocked entry and then search out every contact of every case, and then mandated mandatory quarantines, but also provided food and funding to those quarantined. So from 20 cases at the outset, they are still only at 45, a very very slow progression and every case is broadcast, with twice daily briefings form their CDC equivalent. All this despite Taiwan not being allowed to join the WHO because of China’s obstruction. (Side note: Taiwan is an independent nation, no matter what you see on many corporate web sites that have been forced by China to call it Taiwan province of China. It is NOT. AND.. these corporations are wimps.)

    • Frank says:

      Mr Wordsworth, I entirely agree with your sentiment about Taiwan. It is an independent country and has absolutely nothing to do with The Peoples Republic of China. The cowardly actions by the worlds corporations regarding the shunning of the country of Taiwan is cowardly and repugnant to those of us who believe in some sort of self representation. As flawed as it may be.

    • Hello Beijing says:

      Wow, the PLA even sends propaganda trolls to WS!

  14. BobT says:

    Thailand, my home, the first country to report a case outside of China, has either been super efficient or super lucky with only 50 cases to date.

  15. Beardawg says:

    Tourists from China and real estate buyers from China going away? When did the average Chinese citizen blow past t hff e middle class American and be able to afford these luxuries? I thought 99% of the Chinese were dirt poor by US standards ??

    • 2banana says:

      China has a population of 1.5 billion.

      Using your numbers, 1% became very rich in the last 20 years.

      That’s 15 million absolutely new tourists that came out of nowhere. To compete with the already existing tourist population.

      That’s alot of extra tickets to go up the elevator in the Eiffel Tower or to walk St Mark’s square in Venice.

    • Anon1970 says:

      All of my hi tech gadgets appear to be made in China. Lots of well paying jobs in the US have disappeared especially in the Midwest. They don’t call it the Rustbelt for nothing.

    • Frederick says:

      Well, I for one have noticed the increase in Chinese tourists in Poland over the last 10 years Actually Poland was never a hit destination for Americans Foolish of them as it’s a great country and inexpensive to boot I see a lot of young Brits who fly over for the weekend for the cheap partying and the much sexier girls

      • Gold is says:

        My memory of the UK is that you could fly, well, anywhere and find much sexier girls.

    • Gold is says:

      Yes, but the 1% (that’s a lot) are very, very, very rich. More billionaires in China than millionaires in the US, I think.

      • Javert Chip says:

        Easily Googled 2018 numbers:

        685 Chinese billionaires

        18,600,000 US millionaires

        • Gold is says:

          Thanks Javert, stand corrected. I use an Encyclopedia as an act of pure defiance. But pages sticking together these days.

    • Wolf Richter says:

      1% of 1.4 billion Chinese people = 14 million people = 23% of the US population. That’s a big force of potential home buyers.

      • backwardsevolution says:

        Wolf – isn’t 14 million out of 320 million closer to 4% of the US population approximately?

        My math is probably wrong.

        • Wolf Richter says:

          Your math is right. I just got back from dinner and liquidity (yes, the place was fairly busy, though not has impossibly busy as normal, and it appears not everyone is freaking out and panic-buying three years worth of toilet paper). But in turn, my math appears to be a little twisted :-]

      • Peter Schick says:

        More like 4 % sorry Wol

  16. WES says:

    The only reason Canada has reported so few cases, so far, is because of a shortage of test kits.

    Canadian health officials are hiding this fact by only testing people who have been outside the country to China, Iran, or Egypt, and are feeling ill.

    Nobody else is eligible for testing even if they are ill.

    Canada’s numbers don’t reflect reality.

    • Vic says:

      “test kits” are a fabrication. Total sham.

    • Paulo says:

      Are you kidding? I could be tested immediately in BC at my local hospital…results in an hour.

    • Frasersgrove says:

      WTF are you talking about. I can be tested at the local health clinic here in Winnipeg, at no cost…

      • WES says:

        Paulo & Fraser:.

        I really hate to pop your balloons but no you can not just walk in and ask to be tested!

        Yes, the government wants you to believe that is the case!

        Listen more carefully to their propaganda!

        Read your provincial health care guidelines!

        Only people who have travelled overseas to eight countries will be tested!

        That is why Canadians are now seeing community spread!

        They were refusing to test anybody who didn’t fit their criteria!

        Just another form of Don’t Test, Don’t Tell!

        Just remember who owns the media and why the media will not call them out on the lack of test kits!

    • Paul says:

      Two testing centers for a population of 4 million in the greater Montreal, Quebec province in Canada. was just announced today. a few hospital beds in the city devoted to treatment isolation. There is a nurse shortage here and forced overtime for them, besides a doctor shortage…
      about 45% of cancer patients are not seen in the recommended time period of I think it is 90 days! When there is a flu here the clinics are so crowded that by 1130am they are fully booked for the day. The wife went to a clinic a day of the snow storm and it was empty and was seen quickly. It took me 2.5 months wait to see a dermatologist. If you cannot find a doctor in the public system which is common you have no choice but to pay for a appointment from someone out of the system which I have two docs I use.

  17. DoubleD says:

    It’s a recipe for disaster not only in the Tourism industry, but within the entire global macroeconomic economy. Demand in most of the world was already weak before Covid-19. Now it’s cratering. Oil is a great example. The Saudi’s wanted to cut production massively but OPEC talks fell apart this week when the Russians balked. The greedy fighting amoung themselves. Now as retribution, the Saudi’s are going to ramp production & stick it to the rest of the oil producers. But in the end they’re sticking it to themselves harder.

    This really is a trigger that could spur the next Great Depression. You take dry brush (a decade of low growth/weak demand), throw gasoline on it (massive debt stimulus) & then someone coughs. The whole House of cards goes up in smoke – poof!

    We Americans need to be resourceful and we need radical change in the worst way. Maybe going back to the way our ancestors lived when there was genuine care and concern for others & the community.

    • Realist says:

      I wonder how the oil price will affect the fracking industry ? Saudi needs a price somewhere around $85 to balance their budget ( war is expensive, subsidizing goodies for the populace, too ).

      The fracking industry is addicted to and dependent on cheap money and what will happen when the oil price goes down due to weakening demand and over production ? Keep in mind that Russia’s oil is apparently among the cheapest to extract from the ground.

    • MC01 says:

      Saudi Arabia already tried this tactic to destroy US shale outfits back in 2014: it didn’t work and it almost wrecked their own budget.
      Saudi Arabia is in a much more fiscally fragile position right now: the discounts they announced ($10.25 under the Brent benchmark for delivery in Europe) cannot be sustained for any length of time, at least not without seriously slashing expenses somewhere.

      With the Saudi out, I suspect SoftBank will have to break the piggy bank to keep afloat and bail out all the useless startups the Vision Fund has been throwing money at. After Japan’s top three financial groups (Mitsubishi, Sumitomo and Mizuho) turned down a request for bailout money, SoftBank had to pledge good quality assets as collaterals for JP Morgan to throw a $1.2 billion lifeline to WeWork.
      SoftBank executives declare themselves “unconcerned” with their levels of leverage, but when those three banks, accustomed at keeping zombies like Toshiba afloat, gives you the cold shoulder it would be better to have a deleveraging plan ready.

  18. FinePrintGuy says:

    Good lord- imagine a world where for three months people only go to work and the grocery store then Netflix and chill.

    • Paulo says:

      Yeah, FinePrint,

      It is the idea of being limited, not the actual state of being home. Our plan is to stay mostly home, take lots of walks, kayak, work in the shop building furniture and garden. Mostly eat at home. Oh…it’s what we do anyway. Oh well.

    • WES says:

      FinePrintGuy:. Mini Baby boom?

  19. Curious says:

    Tourism everywhere, especially Europe and the U.S. will likely have to hibernate this summer. Unlike businesses, tourism usually means crowds: air travel, cruises, hotels, casinos, restaurants, shows, and attractions like museums. And crowded places are what people will want to avoid most of all.

    BTW, a leading geneticist and his team from the University of Shanghai, today claimed that outside China, cases will probably increase tenfold every 19 days (SCMP). That’s super fast expansion.

    But what’s still an unknown right now, is whether getting the virus infection makes a person immune, like the common flu. If it does, then by the fall things could start picking up for tourism and the economy.

    • fajensen says:

      then by the fall things could start picking up for tourism and the economy.

      Watch it: March/April you shall invest in 50%-down stocks, the sun comes out with the UV, viruses dies off, everything is ‘back to normal’ then by fall Covid-19 comes round for another go at it and the whole thing goes to heck again (and you sold in July/August )!

  20. Ron says:

    During his news conference following the meeting, Pence announced a new plan to combat coronavirus on cruises.

    There will be enhanced entry and exit screening for cruise passengers, as well as on-board testing for coronavirus, Pence said. There will also be new quarantine standards for those who took a cruise and need to be quarantined, which the Centers for Disease Control and Prevention will coordinate.

    Grand Princes to dock at Half Moon Bay. What to do with the 3500 on board?
    My two grandsons 8 &10 just returned from a Disney Cruise out of Miami. Nobody from an infected country allowed on the cruise except U.S. Moving from one area of the ship to another required supervised hand washing.

    • Bobber says:

      People cruising now had booked many months ago. I doubt very many people are booking now, given the chance of being quarantined in your tiny room for weeks or months.

      I have a feeling cruise fares are going to be dirt cheap very soon, if they aren’t already.

  21. bill says:

    These are not tourists they are people trying to survive the direct result of U,S.A. military intervention in the middle east ,the record of human right is a sad refection on a once great country , we (humanity) have all lost.

  22. sunny129 says:

    As the ‘social DISTANCING” becomes accepted as a way to prevent from exposure to the spread of the disease, Economy will go on a free fall. So are the mkt indexes,

    World allover! Immobility of individuals, services, cessation of social inter actions of any kind will be adversely impacting – Travel industry, Tourism, vacation spots, sports gathering of any kind, theme parks, conventions/conferences of any sort will continue until there is a hope of PEAK infected cases, resulting in less new cases and recovery of’majority’ of affected individuals, in ascending fashion, recorded new cases in descending fashion!

    PEAK of infection won’t occur until there is continuous and consistent PAUSE of at least 23 days(?) in new active cases and or no new individual testing positive and more importantly NO re-infections of the ‘recovered’ cases! Please do remember,
    so far NO evidence of HERD immunity in the society, affected! If any one thinks there will be soon, ‘V’ shaped recovery and buy on dips, good luck!

    • Bobber says:

      It will be impossible to stop the spread of the virus, so the problems of the travel and vacation industry are at some point going to impact all industries.

      As a parent, I can tell you the real problem is the schools. The kids cough and sneeze all day, and they forget to wash hands and cover their coughs. They play together, hold hands, wrestle, pass toys and tablets, etc. You can’t depend on a kid to take something they can’t see seriously.

      Then the kids go home and infect the parents and grandparents, who then spread it within their circles.

      This year is going to be tough on older folks. No way around it. They either get the virus, or they’ll have to take severe precautions that will diminish quality of life and social interaction.

      Hopefully they’ll come up with a cure soon. I suppose they could charge a ton, so the best minds are working on it.

      • MCH says:

        One can hope for a miracle, but it’s really a coin flip. There is no vaccine for SARS or MERS from what I know. There is one for the H1N1 variant that spread around 2009. The going belief is that Covid-19 is just going to get baked into what goes around the world seasonally. Until there are real scientific facts about it available, all we’ll get is FUD courtesy of the media and lots of platitudes.

        I also wouldn’t assume lots of the best minds are working on it, because if it becomes a real problem, the vaccine is gonna get nationalized or whatever the right term is that will enable mass production in public domain. I don’t think anyone can charge a ton for it.

        • nick kelly says:

          POTUS: ‘Does the vaccine cure someone with the virus?’

          Sure no prob. Vaccinate your kid after he gets whooping cough, measles etc. Change the oil in you car after the motor seizes.

          You used to be unable to make this up.

        • Bob says:

          Rabies vaccine works after infection. Many do.

          Are you just having a go at Trump?

        • SteveK9 says:

          A vaccine or treatment will win someone the Nobel Prize for Medicine. Top Scientists still care about things other than money.

      • Double D says:

        My wife is an R.N. & in the past she’s instructed the school where our 5 yo granddaughter goes to strictly enforce having the kids wash their hands many times throughout the day. We’ve ingrained it on her at home, but you’re right it’s my biggest fear of catching the disease. I hate the thought of having to live in a bubble for a year with minimal or no interaction with the small grandkids, but that may be what has to happen if you want to see them grow up.

  23. Mike says:

    There are two variables here:
    People will get tired with this flu hype and things will get back to “normal”.
    An increasing portion of the workers are getting converted to “contractors” that results to seemingly higher wage, but no or limited benefits, and a great deal of uncertainty (disposables citizens). They will not travel. You can forget about it.
    C) While “contractors” learn to piss into bottles while working the ultra rich starts booking trips to the Space.

    • Bobber says:

      It may be a good thing if millions of infected people are walking around with the virus right now. That would mean the death rate is nothing to be concerned about.

    • Shiloh1 says:

      If it’s on Boeing I hope their going.

  24. Anon1970 says:

    Was this supposed to be a joke or do you have difficulty understanding conversational English? The people camped in Turkey on the Turkish – Greek border are desperate refugees. What started as US military intervention is now Europe’s problem.

    • Frederick says:

      Manfred obviously is intellectually “ challenged” Bill and Anon are correct

    • Enough of the Lies says:


      The latest wave of people trying to get into the EU is a direct reuslt of the current and ongoing military action being taken by one country and one country only: Turkey.

    • nick kelly says:

      Three comments arguing with each other and none of you know what you are talking about. I’m the first to trash the US for Afghanistan, Iraq, etc. but the Syrian civil war is NOT of US origin. It was a result of the Arab Spring where folks in Tunisia, Egypt, Libya and Syria wanted out of dictatorships, Syria’s also being dynastic.
      Why should Assad inherit the rule of Syria from his father?

      If you want to point a finger at a main EXTERNAL culprit that would be Russia, that for a pawn in Putin’s Game of Thrones, decided to back up the Assad regime, that has presided over the destruction of Syria.

      • Realist says:

        And the US have troops in place occupying Syria’s oil fields.

        Fun to see reports of all weapons stockpiles of those “moderate” rebels ( local al Qaida and their affiliates etc ) that have fallen into the hands of the Syrians and Russians, nice, brand new US manufacture still in their original crates …

        The difference is that Russia is invited by the legal government in Syria but the US presence is illegal, because the US entered Syrian territory as an outside occupier.

      • Paulo says:

        And what sparked Arab Spring? Crop collapse. Call it what ever you want, but it was drought due to changing climate. It was the first taste and prompted the US military to conduct studeis about the threat.

        “Factors contributing to social unrest in Syria include socioeconomic stressors dating back to conflicts in Iraq as well as the most intense drought ever recorded in the region. Minor protests calling for government reforms began in January, and continued into March.”

        I would bet a lot of money the above statement on tourists/refugees was sarcasm. It has to be, right???

    • Wolf Richter says:

      I read it as bitter & dry sarcasm.

      • Manfred Kriechbaum says:

        You are right about what my Article is all about, just some sarcasm.
        The trouble is half of the Middle East and Africa wants to get to Europe, mostly the richer north. From Pictures shown most don’t come from Syria but lots of other Places and look like fit young Soldiers????
        Matter of fact lots of great holiday Destinations in Europe, because of those so called Refugees swamping those Places are the Losers.
        For the Record, I live in Australia.

  25. Curious says:

    Some historical antecedents to this pandemic might be worth considering: In the early 1950s, America’s greatest fear besides nuclear war, was Polio. In 1952 we had the worst outbreak in our history, with 58,000 cases, of which 5.5% died and 36% had mild or major paralysis. The public treated it like a plague.

    Jonas Salk spent seven years working on a vaccine, and as noted in his Wikipedia article, it was “the most elaborate program of its kind in history, involving 20,000 physicians and public health officers, 64,000 school personnel, and 220,000 volunteers.”

    Bill Gate’s foundation is still trying get some slacker countries to accept the vaccines. He’s spent a ton of his own money on that effort. This is also a chance for Trump to MAGA, if he can super-charge our research engines and devote the needed money. We know that China is already working on a vaccine. The race is on!

    • Bet says:

      Right now trump only cares about how the infection numbers and the stock market affect him. So good luck with that wish

  26. MCH says:

    The entire tourism economy around the world is going to take a hit, I think the best way to try to mitigate this stuff is full transparency. But in reality, that is just not possible.

    Imagine if you had the ability to pull up a map and precisely pinpoint every known infection area to within say 100 m, suddenly, things get a lot easier, and there is a lot less fear of the unknown. Now, it doesn’t mean that there isn’t undetected spreading of the infections going on, but it wouldn’t be causing the kind of widespread panic that sees all toilet paper getting cleaned out of Costco either.

    But unfortunately, that degree of transparency is not likely. In the west, it’s about privacy, so when Santa Clara County declares there are 32 Covid-19 cases in Santa Clara; the lack of transparency in terms of roughly where those cases are exactly means the everyone in the county is now sitting there wondering if their neighbor or the guy they bumped into at Safeway, or that guy who sneezed because of an allergy might be infected. Fear infects at a much faster rate than any virus. Fully transparent… but not to a point that matters

    In China, the problem is entirely different, the government knows much more information but doesn’t want to be transparent because they might be accused of incompetence. Whereas in the west, the people already know their governments are largely incompetent, and all of the platitudes about privacy and transparency are also just attempting to cover their incompetence.

  27. Gold is says:

    Yes Manfred, it’s quite sad that Europe is hesitating before letting these Tourists visit…then stay permanently to add to the ‘diversity’ of Europe (Europe need more diversity)

    I mean, if previous ‘tourist visits’ are anything to go by, local girls will have lots of ‘dates’ and the tourists will totally change the entire neighborhood so in a few short months/years it will be unrecognisable. Can’t wait!

  28. jm says:

    Everyone’s focusing on things like tourism and sporting events. Consider the side effects of 10% of those over age 70 checking out early. E.g., lot’s of empty homes on the market.

    • Gold is says:

      Good point jm and that’s a silver lining I hadn’t considered.

      And I think the next logical step (to give young people a chance to get into the real estate market – and the banks to hoover up r/e at pennies on the dollar) is that, well, how can I say this… if they don’t ‘check out’ with the virus, maybe they could be..should be… I dunno…’asked’…’persuaded’ to check out?

      Just a thought.

      (I’d better put /s here, coz there are a few progressives on WS)

    • Wolf Richter says:


      Wishful thinking, my son.

      • Gold is says:

        You’re up late Wolf. Not testing the beer mug I hope…

      • VintageVNvet says:

        Maybe not Wolf: Taking care of inlaws, 90 and 94, to at least try to keep her in the only home of their 60+ year marriage has been challenging and continues; now to the stage of needing constant care for them both. What is the likelyhood of their death from this virus?
        Apparently, so far, and considering the cluster at the nursing home in WA state, fairly high; their house sells ASAP at their demise, as none of the children want or need it.
        Ours sells ASAP after that, as the only reason we are domiciled here is to take care of mom and pop.
        And methinks this pattern will repeat all over USA, and likely globe.
        On the other hand, we are not doing our annual hegira to CA to see the grandchildren, as we have done every year since 2010 when a couple of them had recently arrived, suspect that pattern too will repeat extensively, not to mention the 3,000 or so folks at Yellowstone last June, making it way too crowded, literally elbow to elbow; don’t think many will be there this year, though it will be interesting to see if they close it and similar parks and monuments throughout USA.
        On another note, I see that ”Spring Break” has NOT been canceled anywhere so far, very likely the biggest ”mixer” for the HS and college age folks, so that could accelerate the Peak of this virus at least.

      • RD Blakeslee says:

        Yep. this ol’ boy is staying in for the duration. Hopes to kick off later, from something else.

        Now, if you cold convince me to catch up with the Hale Bop comet behind which I would find thirty virgins awaiting, I might ask my wife’s permission to go earlier ..

  29. Double Bluff says:

    Happiness is living in a place you don’t want
    to leave.

  30. Julian says:

    Talk about something blown completely out of proportion!

    This harmless flu will soon be gone and will have a Net Zero impact on the economy.

    The media scaremongering is truly a sight to behold though.

    • travis lewis says:

      ZH has been posting on corona virus since Mid December.

      All financial shorts lost serious money, from Mid December to Mid January.

      Financial shorts were encouraged in the last week of January, and then had their pockets vacuumed again, in the first 3 weeks of February.

      All this happened with constant virus news.

      Now it is the end of the world, and financial players better get out NOW, while they still have a car to sleep in.

      • travis lewis says:

        Tape the TSLA chart to the bathroom mirror.

        • Abomb says:

          If that were really the case then one should ask why would the CCP try to quarantine 150 million people? They stake their whole legitimacy on economic growth so to make that decision and inflict that much economic pain they must have felt they had no other choice. Now the Italians are planning on doing the same. This isn’t the flu.

          We can only hope that with the change in seasons this thing tapers ok it’s on or we’re probably looking at the top of the iceberg with current numbers in the US. The issue isn’t so much the numbers that will perish, as terrible as that is. It’s more the strain it’s putting on available medical resources.

          As far as “net zero” impact we already know that’s not true. It’s already having an impact, and it’s going to keep growing unless this the numbers infected heads in the opposite direction.

      • andy says:

        Ywah, that’s what happened.
        Dont get out now, get out 40% lower.

    • Greg Hamilton says:

      I agree with you, but the general populace is truly panicking. As Rahm said, “Never let a serious crisis go to waste.” If you’ve ever played the game of “Telephone” as a child you know how different people come up with different perspectives on events as they are told or see them. From everywhere in the media it appears panic is the order of the day. If you’ve seen Kurosawa’s “Roshamon,” you will see how people remember events differently. That’s natural. This monolithic view of events is not.

    • VintageVNvet says:

      Maybe so, Maybe No,,, only time will tell for sure at this point.

      On the other hand, MU 2 , O MC,, and, after another comment earlier on WS, either this thread or another, I was looking as closely as possible to see if there were any empty seats in the stadium; I do think I saw ONE…

  31. Chris says:

    The underlying problem is that entire world economy has come to rely on vast numbers of people consuming a lot of goods and services they don’t really need (like multiple foreign holidays). We have been living in an unsustainable boom for so long that we thing it’s normal and necessary. Well, historically, it’s not normal. Booms end. Things change. It’s fine with me if the world slows down a bit.

    • Gold is says:

      Yes Chris, I’m with you -let’s slam these greedy, unthinking over-consumers!

      Let’s start by limiting foreign holidays to one per year…no, two years, say max 5,000 miles from home. No-one needs more, totally selfish & unreasonable

      Cars – no more than one new one every 8 years, max price $20,000. Shall we determine the color?

      Then there’s clothes, food, entertainment…the list just goes on and I’m getting visibly aroused just thinking about smashing these greedy, senseless consumers! We’ll teach them what equality really means!

      Let’s do it Comrade!

      • Duke DeGuise says:

        Straw man, much?

      • james wordsworth says:

        People can have what they want as long as they pay the REAL price. If you want a holiday overseas make it carbon neutral. If not, you are not paying the real price. Buy new clothes make sure you pay the real cost of making cotton. Buy new electronics, make sure you pay the real cost of their eventual disposal (back to raw materials). Drive a car, pay the replacement cost of the gasoline. The over consumption we see in the West is just stealing from the future and from our kids. The environment is being destroyed, the planet is being trashed and all because you need a new whatever and the “wonderful market” is mispricing just about everything … Stop being so bloody greedy.

  32. unit472 says:

    RE: Test kits. Medical science has moved incredibly fast here. Remember this virus was only identified and its genome mapped two months ago. That we even have ‘test kits’ is remarkable. I remember when AIDS broke out in San Francisco. It wasn’t even called that because no one knew what it was. It was dubbed Gay Related Immuno Disorder or GRID by doctors and the ‘Gay Plague ‘ by the man in the street. Took a couple of years to finally identify the virus.

    In China they had problems initially using a nucleic acid test kit because of false readings and or lack of trained lab techs. Now we have a reliable test kit but, in the US, only the Feds could administer it. Now states and private labs can administer it.

    Ramping up production will take time and, because this is a potentially lethal virus, no government is going to sell the test in drug stores and let people ‘self test’.

  33. Xabier says:

    With community cluster spread in March; peak contagion -probably 90% of all infections – April to mid-June, and a very messy aftermath.

    So, it’s goodbye to the whole 2020 tourism season.

  34. Michael Engel says:

    1) San Siro stadium is half empty. Italy already cleansed ME and African illegal immigrants from the front of Milan train station, but N. Italy industry will flourish, replacing supply from China.
    2) Less US tourists with c/c dollar in their pockets pouring to France hotels, museums, restaurants…is a good thing. It will make USD strong.
    3) Covid-19 will tarnish demand for silver, gold and oil. Why buy diamonds if u cannot fly.
    4) Messi is beyond peak. Chinese tourists will skip Barca.
    Blame Messi, not code-19 exported from China labs to the whole world !!
    5) European soldiers will replace fearful airport worker using sick days.

  35. Michael Engel says:

    6) NATO budget will expand.

  36. Iamafan says:

    No mention of gambling tourism in the article. I heard they are badly hit. Rumour has it that even online gambling operators in Sihanoukville in Cambodia and pogo joints in the Philippines are in trouble. Supposedly to enforce anti-gambling for Chinese, China is cancelling the passports of its citizens accused of playing part of this online gambling craze and their families threatened in the mainland. The gambling hotel stocks are in trouble.

  37. Michael Engel says:

    1) European tourism is always slow in Jan/ Feb.
    2) If covid-19 will fade in Mar/ Apr, there is hope that people seeking bargains will pour into Europe during the coming summer and save the season.
    3) Taking an early hit is better than peak season knockout.
    4) The industry is not destroyed. The industry is in a state of shock.
    5) It might be a repeated blip that require flexibility, adjustment and wisdom.

    • Jdog says:

      The industry will very likely not recover from this for a very long time. There is no sign of this pandemic fading, and in fact the opposite is happening, it is spreading at an accelerated rate.
      There is also the very real prospect that this virus will mutate and return in an even stronger version next year much as the Spanish flu did.
      Government agencies are telling older people with underlying health conditions not to travel, and to stay off cruise ships. That is the majority of travelers. This episode will leave lasting mental scars on older people who will from this time on not be able to think about travel without thinking they are putting their lives at risk.
      In addition, this is going to cause worldwide recession, which will exasperate the travel industry even more.
      People who are trying to say this is no big deal are delusional, this is a big deal and it will be going into the future.

  38. Unamused says:

    Can a global depression be avoided?

    • doug says:

      My guess: No, it can’t be avoided. Too much forced ‘perfection’ around the world markets. The forcing is over for an extended period.

    • OutWest says:

      If tourism is approximately 10% of global GDP and there is still reportedly very little smog over most Chinese cities, I cant image how a depression can be avoided but that doesn’t fit the happy-talk paradime just yet.

      By not testing for the covid-19 virus in the US, one has to assume that deaths caused by the virus are (and will continue to be) classified as the flu, bronchitis, pneumonia, etc.

      Not if, but when the virus spreads across the US…the largest economy in the world, this Administration’s blatant strategy of denial may backfire. Perhaps before long American’s will not be welcomed abroad. That’ll surely impact things.

    • Prof. Emeritus says:

      We will know more at the Monday market start and we should wait about 5-7 trading days to see how it will unfold – nothing goes to heck… but you know. Right now economies really need to find a way of spending to avoid it. I don’t think any sector exists that can be so quickly upscaled to replace tourism. Maybe online services, but even that is more like a no.
      But even if a depression happens it first has to become global, which is another challenge for the virus (although it seems possible), and remember: no two depressions are the same. So building on past experiences may be useless with this one.

  39. gorbachev says:

    You need real estate,stocks and cash at all times.Right now cash

    is king so watch your spending.You may need it for medical supplies.

    If you have extra income buy companies you believe will be around

    in a hundred years-jpm etc.If you can’ t afford a house maybe a woodlot

    to get you in the game.Lastly find out how to get tested before

    you need to get tested.Cheers

  40. Anthony says:

    A few facts…this virus is not flu and as such there is very limited immunity to it….it appears to have mutated already with a strong version in Italy and Iran…people who have had it don’t appear to getting immunity to it so , yes, you can catch it again…it appears to kill more men that women….the vaccination program for the Sars virus was a disaster with the vaccination being worse than the original virus…..

    Regarding Europe and a vacation, us Brits are saying no chance if Spain or Italy has it, after all who in their right mind, in the USA, would visit Disneyland or any very busy theme park…who would go to the movies and sit next to someone with the bug…or even go to church on a Sunday.(I’ve just been lol) Who would sit at a football stadium or go and watch basketball or cricket… This is why unemployment for many is now real and worse, this is just the beginning and finally,,,Bye bye for now and have a happy Sunday…ho ho ho

  41. Former says:

    Anyone not being hurt? Costco is selling like a mad. And not only toilet paper. They should do well this quarter…

    • Wolf Richter says:

      Yes, but front-loading causes a swoon in subsequent months and quarters, when all those people with months’ of supply don’t buy anything. The effect of front-loading is a brief spike in revenues followed by a long hangover. Always.

    • Mike G says:

      I had an interesting bike ride this morning. First past the airport (California regional), where the typically-full parking lot was half-empty, noting that the airlines are flying smaller jets on their routes now. Then past Costco, where everyone seemed to be hauling huge quantities of toilet paper, paper towels, canned food and bottled water.

  42. Michael Engel says:

    Chelsea 2 : 0 Everton , min 32. Sold out, no empty seat

    • Anthony says:

      For now, as we are two weeks behind Italy with our virus numbers..who knows when the panic will set in, if it doesn’t then great but if it does……keep off the tube…lol

    • VintageVNvet says:

      I was watching MU 2 : 0 MC very closely after your comment, to see if I could find an empty seat; I really do think I found ONE…LOL

  43. Iamafan says:

    I remember the gas lines. This time it will be different. Good luck to all.

    • RD Blakeslee says:

      I remember the gas lines – lived inthe countryside near Warrenton, VA at the time and commuted to DC.

      A gasoline tanker unloaded at a local gas station periodically and folks lined up to fill up. I got in line with a trailer hauling six 55 gallon drums behind my pickup truck, stored the drums in a shed on my place and fed my car from there.

      Saved a lot of time.

  44. Petunia says:

    The whole virus thing is a huge scam. It’s political and will play out over the summer until the big ripoff in Milwaukee.

    • Iamafan says:

      The virus is real but politics is the scam.

      Follow the money. Who gains in the ‘pandemic’ scare?

    • Paulo says:

      Quite the scam, eh? Simple math shows a 5% mortality rate. Spanish flu was 2-3% mortality. This is not a scam, Petunia.

      from Axios: “In Italy, where the government has imposed a lockdown affecting 16 million people in the country’s north, new cases spiked from 5,883 to 7,375 overnight, while reported deaths surged from 133 to 366.

      The big picture: Governments around the world are scrambling to contain the virus. COVID-19 has infected more than 106,000 people in 100 countries and territories, mostly in mainland China, which has seen a slowdown of new infections this past week. The global death toll has risen to almost 3,600.”

    • Erle says:

      Petunia, I have always enjoyed your posts as they give me an insight on the feminine shopper. That has always been a dark mystery to me, but bless you, as with mopes such as me the entire clothing economy would collapse.
      I have hidden some garments of mine from decades ago from my wife that made me throw away nearly all. I had some truly durable perma-press shirts that had the feel of pure cotton oxford cloth that needed no starch as my wife refuses to do that. My example clothing is from 1973 and they lasted until they were donated to charity without even a deduction that the Clintons enjoyed on worn out shoes and severely used underpants.
      I never met interesting gals at the laundromat as was shown on TV commercials. I wasn’t too hot on single mothers with two kids from differing donors.
      I tried to avoid the high traffic times so that I could hog five machines with a month’s worth of laundry. Unlike the slothful women, I figured out how to selectively pick the ongoing drying clothes from the machine and fold them properly rather than have a mess in a laundry bag.
      My problem is that we two never attended the same washateria. You might have been taken back by a guy in a motorcycle jacket and engineer boots but I promise that I was always respectful to a fault with womyn.

  45. SteveK9 says:

    Off topic: Wolf, looking forward to your next oil article.

  46. Ian says:

    I recall all these places were starting to grumble about too many tourists. How is that working for you now?

    • Wolf Richter says:


      As I mentioned earlier here, these are two different sets of people:

      1. the locals that pay the price for mass tourism complain that there is too much mass tourism;

      2. the businesses and people that make money off mass tourism, and people working in it, love mass tourism.

      Now, the roles have switched. The first group is content, and the second group is frazzled.

  47. VeryAmused says:

    To the the virus is a scam folks.

    Why would an oppressive regime like China’s communist party do massive harm to its economy by making up a virus hokes?

    If a regime like that does what they are doing because of a virus…count me scared and prepping for a massive economic take down of the world economy.

    • VeryAmused says:


      If a regime like that does what they are doing because of a scam virus…count me scared and prepping for a massive economic take down of the world economy.

    • Petunia says:

      Because they can stop the HK protests from expanding into the mainland, like they were, and they can get rid of dissidents without raising suspicion from western idiots. Commies don’t care about money as much as they care about control. We on the other hand are exploiting the overblown flu season for our own reasons, political and financial. This covers the big picture.

      • Iamafan says:

        How can we make money exploiting the issue? I am too scared to short stocks. Interest is getting close to zero. I’m screwed. I don’t think I’m buying the dip when VIX is at 50. I can only panic so much.

        • Petunia says:

          Sometimes the only way to win is not to play.

        • fajensen says:

          Buy some airline stocks. Some of them are making money and they will get great contracts on fuel for the next year or so. Banks should be good too.

          I am short the market (DAXX, OMXS30) because Brexit so I guess I got quite lucky recently – except I am also the “target audience” for Covid-19 …

      • VeryAmused says:

        If this is true…count me scared and prepping for a massive economic take down of the world economy

  48. WSKJ says:

    March 8, 2020:
    A quick note to summarize info from a blog that I follow, where a frequent poster has been reporting COVID-19 news from his home in Huainan, Province of Anhui, China (Google map shows it is inland from Shanghai), where there have been cases of COVID-19, quarantine, and a fair amount of fear.

    He reports that Huainan seems to have turned the corner on the COVID-19 outbreak; this is to some extent because he is aware of lessening quarantine measures; also, his personal observations of behavior around his home (for example, fewer people wearing masks).

    IMHO, it is way too early to calculate mortality rates as, for example, compared to the flu. They seem to be broadly comparable.

    Those of us who are old with chronic conditions should be more careful; but we should plan to put up a good fight if it comes to that. Keep the abdominal muscles strong for the coughing- that’s what it comes to for me (coughs, colds, flu). Stay well, all.

  49. c1ue says:

    What about tourism in SF?
    You’ve already commented on the Fisherman’s Wharf/Pier 39 crowds being thin.
    GDC cancelled, unknown number of other local and national level conferences cancelled (SXSW in Austin), that can’t be good for the SF economy either – and by extension, Airbnb’s desire to go IPO.

    • Wolf Richter says:

      It’s pretty quiet here. Just about all the tourists from Asia are gone. The cruise ships are gone — except the pariah ship that is supposed to dock today at the Port of Oakland. Just about every major conference has gotten cancelled. Minor stuff is getting canceled. Air traffic is way down. Many routes to Asia have been shut down — and so those people are not coming in. If I can get some actual numbers in terms of tourist arrivals and overnight bookings, I’ll post them.

      Anecdotally: We went out last night. Plenty of locals still out and about at night, but I’d say fewer than normal. Just a hunch.

      At the restaurant, where it’s very hard to get a table without a reservation way in advance, the bartender (we ate at the bar, full menu) said that business was about normal. But by 9 PM – this place is open late – I could see quite a few empty tables, which I hadn’t seen before at that time.

      On the way to the restaurant, I walked by some other popular restaurants; they all had people but none were full, as they normally would have been.

      • Wisoot says:

        “Air traffic is way down” – Be interesting to see the science after several weeks of clear skies – impact on pollution or acid rain values, already people living near airports are getting the best night sleep they ever had. Will the human mindset want to return to before. Will Gov allow it.

        • Mike G says:

          Interesting fact — the week after 9/11 when essentially all air traffic was grounded in the US, saw the biggest ever recorded jump in the difference between daily maximum and minimum temperatures (by about 1C). The sudden absence of aircraft contrails caused a significant decrease in cloud cover which moderates temperatures.

  50. doug says:

    Lebanese Prime Minister Hassan Diab announced on Saturday that Beirut will not repay a $1.2bn Eurobond due next week and will instead seek to restructure its massive debt as the country’s dollar reserves dwindle amid an acute financial crisis.

    Lebanon’s first ever default?
    Who is next I wonder…

    • Erle says:

      I recall in the 70s that the Lebanese Pound was the most touted as the best undervalued currency on this flat earth. That didn’t make for a hot currency investment as all of their gold was stolen by some cabal to the south, or whatever.

    • travis lewis says:

      Great opportunity for wide spread sovereign defaults.

  51. Squirrel says:

    From New Jersey, Bergen County, Work in the City, Friday went out for drinks after work in the city, all of the bars and restaurants were packed, Went to dinner on Saturday night in NJ, a local place I go to had a 45 minute wait for dinner at 5pm, then headed over to another restaurant Rosa Mexicano, the place was packed, wait was an hour.. Talked to my brother who lives in Rome, said tourism was dead, locals out and about, Maybe the media are more panicked than the people… We all need to relax…

  52. Erle says:

    Why would any one want to go to France? Every time that you do something fairly normal such as pulling a child from religious traffic, or even saving a cat from the invaders, some guy gives you a wet kiss on both cheeks while violently whipping the head from side to side before one can figure out what’s up.
    That behavior is what spreads the virus so you can have it but I will vacation in Dubuque or some other civil place.

  53. Michael Engel says:

    1) RE : Barcelona rent will rollback. SF + Seattle will followup.
    2) Gov officials say and do what they must do, but on a heavy
    monsoon day in Manchester derby, there was not even one
    empty seat until min 96. People don’t care. They do what they have to do, because for fun u take risk .
    3) Iran default in Beirut.

  54. squirrel says:

    Per the CDC, estimated range of deaths from between 151,700 and 575,400 people who perished worldwide from 2009 H1N1 virus infection during the first year the virus circulated.

  55. Michael Engel says:

    Soon in the NYT : round trip NY – London for $199.

  56. Erle says:

    I just don’t understand.
    For decades everyone has been pissed at China for import crap that doesn’t work.
    When they finally come up with something cheap that DOES work, everyone gets pissed again.

  57. HollywoodDog says:

    Covid-19 is just the start. Covid-20 is assuredly in larval stage in a gutter of some congested, unsanitary urban ghetto. Other new, unheard types of viral lifeforms are luxuriating in their embryonic days. Travel screening will have to expand in staff and technology to screen for infectious diseases as well as explosive material. The TSA will soon be hiring nurses and doctors who are as officious as their wand wavers. Peak Travel has come and gone. Voltaire’s advice is more apropos than ever: “Stay home and tend to your garden.”

    • Unamused says:

      Voltaire’s advice is more apropos than ever: “Stay home and tend to your garden.”

      The French translates to

      “All that is very well,” answered Candide, “but let us cultivate our garden.”

      My favorite from Candide is

      “Our labour preserves us from three great evils—weariness, vice, and want.”

      It’s a great satire on humanity, and it never gets old.

      Dow futures are down a thousand.

      Tomorrow is going to be rough. I seriously doubt a global economic depression can be avoided. Me and mine are about as prepared as we’re going to be.

      I have long advised people to plant potatoes. Not only can they keep you alive, but you can make vodka out of them.

      • RD Blakeslee says:

        And when good time roll and we can camp out again, we can do what my wife and I did on our honeymoon on Bear Lake, Michigan: Throw potatoes at black bears approaching your tent.

        • Unamused says:

          Don’t wait. There is no time but the present.

          It’s called ‘the present’ because it’s a gift.

      • Paulo says:


        We still have 200 lbs of Russian fingerling spuds in the storage area :-) I’m just finishing off a 500 sq ft greenhouse to replace an old one, run two freezers and have enough stores for a few months if need be with canned salmon and frozen meat and veggies. This has nothing to do with the virus, rather how we always live. Shop the sales and go to town when we want to. Because I bake our bread I did stock up on 60 lbs of flour about 2 weeks ago as well as rice, pasta, etc.

        Although it snowed this morning, crocuses are up and blooming and daffs should open next week. Our tomatoes are sprouting in the window sills and we are seriously considering growing some pot this year. What the hell, why go anywhere? Books to read, gardening, fishing, kayaking, all free to do and no crowds. Boredom is a self-inflicted sickness, and all the traveling in the world won’t fill that void, imho.

        Pre-market down 1030 pts at 16:04. Duck!!

      • TownNorth says:

        I see I’m not the only one looking at futures. Of course, the market is so volatile it could be anything at the open.

        • Unamused says:

          You’re right, of course, but I think you’d better hope not. ‘Anything’ could be even worse than it is.

          If I recall correctly, the first circuit breaker trips at 5%. Dow futures are only a couple of hundred points from that. Futures are down across the board and my beer mug just transformed into a shot glass.

  58. RD Blakeslee says:

    A knowledgeable investor, who shall remain nameless here, shorted the market a month or so ago. A little birdie tells me he has taken a futures contract to buy physical gold @ $1,700 3 months out where he’ll park the proceeds from the short and he’s looking to buy a used backhoe to bury it.

    • RD Blakeslee says:

      … but, for cheap security, I would suggest he come here with his gold, borrow my son’s backhoe and bury it.

      Who in his right mind would look for buried gold in WV?

  59. The worst is that, France being devised in “regions”, some of those regions almost entirely rely on tourism for living. Areas like where I’ve grown up, the ocean shore, make all earnings in the three summer months. No tourism would be fatal to the economy of areas like this one. It’s much more than a mere 10%…

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