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New analysis from Juniper Research has found the impact of Coronavirus on the international travel industry could cost network operators over USD25 billion in lost revenue during the next nine months.
Juniper Research examined two possible scenarios: medium and high impact, believing a low impact is now not possible. The high impact scenario assumes severe disruption to international travel will continue for nine months, with travel restrictions and reduced demand for international travel continuing. In this case, the resulting impact on operators’ international roaming revenue would be significant.
No end in sight
In the high impact scenario, Juniper Research believes over 650 million passenger trips will be cancelled due to coronavirus over the next nine months. This is over 80% of the anticipated international passenger trips that were previously forecast before the spread of the virus.
The research assumes that over half of all roaming revenue for the year will be affected, amounting to USD 25bn in lost revenue. The research also highlighted the period between June and August as of particular significance when the demand for international travel is high. It forecast that operators could lose up to USD 12bn in roaming revenue alone in these three months.
In terms of the overall impact on operators, it must be noted however that global roaming revenue only accounts for approximately 6% of total operator-billed revenue per year, limiting the hit on the industry.
No mitigation strategies
Given the nature of the international travel industry, the research anticipated there will be no strategies available to operators to mitigate this loss. It forecast that services, such as virtual conferencing, will offer businesses an alternative to international travel, but will offer no benefit to operators.
Additionally, the research highlighted that travel cancelled due to the spread of Coronavirus is unlikely to be rebooked. As a result, this loss of roaming revenue is unlikely to be recovered once the international travel industry resumes normal service.
