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1. China’s Economy Further Shrinks Due to COVID-19 Lockdowns
China’s economy declined 2.6% in the second quarter, April through June, compared to a 1.4% decline in the previous quarter, due in part to the country’s mass COVID-19 shutdowns, NPR reports. Compared to the same quarter in 2021, the world’s second-largest economy has grown by 0.4%.
Rajiv Biswas, executive director and Asia-Pacific chief economist for S&P Global Market Intelligence, said the activity was “much weaker than expected.”
“Factories and offices were allowed to start reopening in May, but economists say it will be weeks or months before activity is back to normal. Economists and business groups say China's trading partners will feel the impact of shipping disruptions over the next few months,” the news outlet reports.
2. Canada Reestablishes Random COVID-19 Testing at Airports
The Public Health Agency of Canada announced Thursday that random COVID-19 testing will resume on July 19 at the four major Canadian airports, CoStar News’ Garry Marr reports. Random testing will be administered to both domestic and international travelers who arrive at the Vancouver, Calgary, Montreal and Toronto airports.
Jean-Yves Duclos, Canada’s minister of health, said the decision was made due to concerns over the newest COVID-19 variants. Some hospitality experts don’t agree with the move.
"It defies all logic," said Lyle Hall, hospitality, tourism and gaming industries adviser for Hall Hospitality Advisors and a longtime tourism industry veteran. "There are Canadians returning home [from abroad], but, wearing my tourism hat, what tourist will want to go through this nonsense? It's crazy."
3. Demand, Occupancy Decline but Patterns Indicate Travel Resurgence
For the week ending July 9, U.S. hotel industry occupancy fell to 63.3%, the lowest mark since March, STR's Isaac Collazo reports. The drop in occupancy and hotel demand is typical for weeks that follow a three-day Fourth of July holiday weekend, according to data from STR, CoStar's hospitality analytics firm.
“Since 2000, the Fourth of July or the federal observance of the holiday has fallen on a Monday seven times, and in all but one of those three-day weekends, demand and occupancy both declined from the previous week. The only time both measures have not fallen was last year, when pent-up demand from COVID-19 isolation drove the three-day holiday weekend to the highest level since STR began tracking weekly performance in 2000. This year’s weekly demand decline was the largest of the seven,” Collazo reports.
Week 30 usually produces the highest weekly demand of the year, so this upcoming week, July 18-23, should be a good indicator of the state of the travel resurgence through the end of summer and into the fall, Collazo reports.
4. Delta’s Earnings Lag Behind Expected Numbers
Widespread flight cancellations and high fuel prices were among the reasons cited for Delta Air Lines’ underwhelming second-quarter earnings, CNN reports. The company achieved adjusted earnings in the quarter of $735 million, its highest since the pandemic, but it was anticipated that Delta would cross the $1 billion threshold.
Delta CEO Ed Bastian said the company "pushed too hard" with scheduling flights, causing the cancellations.
"The operational environment for the entire industry remains uniquely challenged. I'd like to sincerely apologize to those who have been impacted by cancellations, delays and long wait times over the last two months. ... Restoring operational excellence is our top priority,” Bastian said.
5. Hotels Offer Aid for High Gas Prices
In an effort to quell travelers’ reluctance to hit the road this summer due to decades-high gas prices, some hotels are creating promotions to give out free gas cards to those who book multiple nights, Forbes reports.
Major brands such as Marriott International and Choice Hotels International are among the companies offering these perks. Marriott has a “Gas and Go” promotion at 18 of its properties, handing out a $25 gas credit to guests who use a promo code. Choice is providing a $50 gas card to those who “register for Choice Privileges and complete two separate stays at Choice Hotels by August 1,” the news outlet reports.