The impact of coronavirus on the economy has been drastic and as a result major UAE based Airlines and hotels are asking their staff to go on unpaid leave, as they battles the full impact of the coronavirus on demand.
Many airlines and hotel groups have warned of a hit to their earnings as the outbreak led to fewer bookings and more event cancellations.
According to US-based Global Business Travel Association (GBTA), the deadly virus could wipe out $559.7bn annually from spending on corporate travel this year, which is 37 per cent of the industry’s total global expenditure forecast.
In an attempt to cut down on costs, hotels are pressing for taking a stand with this decision and pushing it forward. The move to sanction unpaid leave will impact mostly on middle-level managers rather than the daily operations staff for now, hotel sources say.
Hotel Cost Cuts:
With cancellation worth Dh250,000 to Dh300,000 since the beginning of this year according to sources, hotels are adamant on cutting costs.
Slashing Room Rates: Though Luxury hotels have not been affected as much, mid-tier hotels targeting the business communities have taken a major hit. At entry level 5-star hotels, rate have been slashed to Dh300 a night to try and convince travellers to book with them. At the luxury end of the hospitality market, properties are finding even rates as low at Dh1,200 a night is not winning them guests. Holiday homes also have taken a slight hit as cancellations continue to increase in the wake of the disease.
With travellers from China, Italy and from within the GCC all but disappearing, hotels are among the worst hit.
Amenity Cuts: With previously experiencing somewhat similar circumstances after 9/11, other steps are being taken by hotels to reduce costs including closing full floors to save on utilities, a temporary freeze on new hires and replacements, and postponing non-essential purchases.
Sanitary Measures: To cope with the impact of Covid-19 virus, additional measures to increase the frequency at which rooms and facilities are cleaned and sanitized have been added.
Airlines Take Precautionary Measure:
Emirates Group, which includes the world’s biggest airline by international traffic, has offered its staff the option of taking voluntary leave, joining global carriers in taking measures to address the slide in air traffic demand due to the coronavirus outbreak.
The move comes after Emirates halted all fights to China, except Beijing, and Iran, based on directives from the UAE General Civil Aviation Authority because of the spread of coronavirus in those countries.
Hong Kong Airlines axed 400 jobs and asked staff to take two weeks of unpaid leave per month or switch to three-day weeks. China Southern Airlines asked its pilots to take mandatory indefinite no-pay leave. Singapore Airlines has also been forced to cut its flight schedule.
Etihad Airways said on Wednesday it is asking some staff to bring forward their leave from later this year to April amid a reduction in operations due to the impact of coronavirus (Covid-19).
An Etihad spokesperson told Gulf News that the carrier “has asked cabin crew members to consider bringing forward paid leave from later this year to April, due to changed demand caused by the Covid-19 virus.”
“Global restrictions on travel and re-timing of events have caused many passengers to change their travel arrangements, and the airline is among many realigning resources to accommodate these changes,” Etihad said.
The coronavirus has so far infected over 94,000 people across the world, and caused over 3,000 deaths, with those numbers still rising as the virus spreads.