BEACH Stocks: $332B in Value Washed Away
The market’s latest storm has plunged the global travel industry into uncharted territory.
Since the S&P 500 market high on February 19, 2020, market capitalizations across BEACH industries—booking, entertainment, airlines, cruises, and hotels—have tumbled. The global airline industry alone has seen $157B wiped off valuations across 116 publicly traded airlines.
Investor confidence in cruise lines has also dropped. Between Carnival, Royal Caribbean, and Norwegian Cruise Line Holdings, over half of their market value has evaporated—equal to at least $42B in combined market capitalization.
Today’s infographic profiles the steep losses across BEACH companies. It looks at the ripple effects across individual companies and industries from the February 19 peak to date*.
*All numbers as of market close on March 24, 2020
Falling Off A Cliff
As the COVID-19 pandemic has spread to over 100 countries, many governments have implemented sweeping travel restrictions.
The impact across BEACH industries is far-reaching, with some valuations declining to nearly a quarter of their previous total.
|Company||Ticker||Category||Market Cap: 02/19/2020||Market Cap: 03/24/2020||% Change|
|Live Nation||LYV||Entertainment & Live Events||$16.3B||$9.1B||-44%|
|Six Flags||SIX||Entertainment & Live Events||$3.2B||$1.1B||-66%|
|Cedar Fair||FUN||Entertainment & Live Events||$3.1B||$1.3B||-58%|
|The Walt Disney Co||DIS||Entertainment & Live Events||$255.1B||$177B||-31%|
|Penn National Gaming||PENN||Entertainment & Live Events||$4.3B||$1.6B||-63%|
|Delta Air Lines||DAL||Airlines||$37.5B||$17.8B||-52%|
|Alaska Air Group||ALK||Airlines||$8B||$3.7B||-54%|
|Air Canada (in USD)||AC||Airlines||$8.3B||$2.8B||-67%|
|Carnival||CCL||Cruise & Casino||$30.8B||$10B||-67%|
|Royal Caribbean Cruises||RCL||Cruise & Casino||$23.2B||$7.5B||-68%|
|Norwegian Cruise Lines||NCLH||Cruise & Casino||$11.1B||$3.1B||-72%|
|Las Vegas Sands||LVS||Cruise & Casino||$52.8B||$35.1B||-34%|
|MGM Resorts International||MGM||Cruise & Casino||$16.2B||$6.2B||-68%|
|Wynn Resorts||WYNN||Cruise & Casino||$14.6B||$7.2B||-51%|
|Caesars Entertainment||CZR||Cruise & Casino||$10B||$4.2B||-58%|
|Eldorado Resorts||ERI||Cruise & Casino||$5.4B||$1.3B||-76%|
|Marriott International||MAR||Hotels & Resorts||$48.3B||$25.7B||-48%|
|Hilton||HLT||Hotels & Resorts||$31.3B||$19.4B||-38%|
|Hyatt Hotels||H||Hotels & Resorts||$9.1B||$4.9B||-46%|
|Choice Hotels International||CHH||Hotels & Resorts||$6B||$3.2B||-46%|
|Wyndham Hotels & Resorts||WH||Hotels & Resorts||$5.6B||$2.9B||-48%|
|Park Hotels||PK||Hotels & Resorts||$5.5B||$1.9B||-66%|
|Vail Resorts||MTN||Hotels & Resorts||$9.98B||$5.8B||-41%|
|Marriott Vacations Worldwide||VAC||Hotels & Resorts||$5.3B||$2.2B||-59%|
For instance, the consequences on various travel bookings brands have been severe. Booking Holdings, the parent company to Booking.com, Priceline, Kayak and OpenTable, witnessed share price declines of over 35% since the peak.
Across the entertainment industry, ticket sales for concerts, movies, and other events are falling precipitously due to cancellations or postponements.
Upwards of $5B in global film industry losses could result from the COVID-19 pandemic.
Chilling footage of the Las Vegas strip, as well as other tourist epicenters around the world, shows deserted streets as visitors opt to stay home instead.Bracing For Impact
Meanwhile, worldwide airline revenue is estimated to fall by as much as $113B in 2020.
In under two months, the share price of Delta Airlines has fallen over 50% as the company anticipates a capacity reduction of 40%, the largest in its history.
|Company||Ticker||Feb 19 2020 Share Price||Mar 24 2020 Share Price|
|Delta Air Lines||NYSE:DAL||$58.5||$26.9|
|Alaska Air Group||NYSE:ALK||$65.2||$28.9|
|Air Canada (in CAD)||TSX:AC||$45.3||$15.1|
The global airline industry—which employs over 10M people—supports $2.7T in global economic activity across an average of 12M passengers per day.
Aruba, Jamaica No More
As for the cruise line industry, global operations came to a 30-day standstill in mid-March. Over 800 COVID-19 cases and 10 deaths across three cruise ships have been discovered.
“COVID-19 on cruise ships poses a risk for rapid spread of disease, causing outbreaks in a vulnerable population, and aggressive efforts are required to contain spread.”
Carnival, a Miami-based company, has witnessed its share price fall to around one third of its February 19 value. Similarly, Royal Caribbean Cruises, which has seen its market cap plummet almost 70%, announced that it will suspend trips until mid-May.
As the hotel industry is impacted by the global outbreak, share prices have also realized a significant slump. In the U.S., an estimated $1.4B in revenue is vanishing each week. If occupancy levels fall by just 30% this year, the U.S. hotel industry could see approximately 4 million jobs wiped out.
The Baird/STR Hotel Stock Index, which serves as a benchmark for the sector’s overall health, has declined over 47% year-to-date.
Global Stimulus Response
A number of travel industries around the world are calling for stimulus packages.
On March 25, the U.S. Congress finalized a historic $2T deal, which includes $25B in grants for the airline industry. In the UK, officials are providing small businesses in hospitality and leisure grants that are worth up to $30,000 as part of its $400B bailout plan.
China, Germany, Italy, and Spain have outlined multibillion dollar proposals in response to COVID-19. Overall, at least eleven countries have announced stimulus plans along with the European Commission and the IMF.
When Will the Travel Wave Hit Again?
Amid the COVID-19 pandemic one thing is clear: the impact on the travel industry will have a marked effect on the broader economy.
Travel is closely linked with oil, as transportation accounts for over 60% of global demand. In Q2 2020, global oil consumption is projected to fall by 25M barrels per day.
Along with this, discretionary consumer spending makes up over one third of America’s GDP. The impact of the pandemic across this sector is expected to contribute to a 10% decline or more in U.S. GDP for the second quarter.
As conditions materially improve around the world—with China beginning to open up flights—positive signs are emerging from under the surface. Will BEACH industries quickly bounce back as infection rates drop, or will a slow and painful recovery unfold in the months ahead?
At Risk: The Geography of America’s Senior Population
The U.S. senior population is much more vulnerable to COVID-19. Which states and cities have the most people in this at-risk age group?
At Risk: The U.S. Senior Population
The U.S. now has the largest number of confirmed COVID-19 cases globally, and modelling predicts that the country could see about 100,000 to 200,000 total deaths. Unfortunately, adults aged 65 or older—about 16% of the U.S. population—are at much higher risk of both severe illness and death.
Today’s chart uses U.S. Census Bureau data to map the percentage of the population that is 65 years or older by state. It also outlines the urban areas that are most heavily skewed towards this older age group.
Proportion of Seniors by State
Below is the full breakdown of the U.S. senior population by state, using the latest available data from 2018.
Maine tops the list with 20.6% of its population comprising adults age 65 or older. At the other end of the scale, Utah’s seniors make up only 11.1% of its population.
|Rank||State||65+, % of Population||65+, Total Population|
Notably, Florida has the second highest percentage and number of seniors nationwide. Its governor just announced the state’s stay-at-home order on April 1st, after taking criticism for refusing to do so earlier.
New York, the current global hot spot of COVID-19, is close to the national average with 16.4% of its population aged 65 or older. However, with over 3.2 million seniors, the sheer volume of individuals needing hospitalization has already put a strain on the state’s healthcare system. Governor Andrew Cuomo says the state will run out of its current supply of ventilators in less than a week.
The Most Vulnerable Urban Areas
On a local level, which places have the highest proportion of seniors? Based on all urban areas* with a population of 250,000 or more, here’s how the top 50 looks:
|Rank||Urban Area||65+, % of Population||65+, Total Population|
|1||Bonita Springs, FL||38.2%||135,286|
|3||Barnstable Town, MA||29.4%||74,614|
|4||Palm Coast–Daytona Beach–Port Orange, FL||28.3%||110,355|
|5||Myrtle Beach–Socastee, SC–NC||27.3%||74,783|
|6||Cape Coral, FL||27.0%||175,483|
|7||Indio–Cathedral City, CA||26.0%||95,054|
|8||Port St. Lucie, FL||25.6%||110,883|
|9||Palm Bay–Melbourne, FL||22.9%||114,347|
|15||Mission Viejo–Lake Forest–San Clemente, CA||19.0%||115,891|
|16||Tampa–St. Petersburg, FL||18.9%||516,269|
|25||Urban Honolulu, HI||17.7%||148,045|
|27||New Haven, CT||17.6%||97,888|
|34||Santa Rosa, CA||17.1%||55,094|
|49||St. Louis, MO–IL||16.2%||347,537|
*Urban areas consist of a downtown core and adjacent territories
With 6 areas in the top 10, Florida is quite vulnerable at the local level as well. Other states with multiple areas on the list include Ohio, Pennsylvania, and New York.
The Senior Population of Current U.S. Hotspots
To determine the vulnerability of current COVID-19 hotspots, we compared U.S. counties with a high number of cases per capita against their percentage of seniors.
Counties at the bottom left have low readings on both metrics. Conversely, counties in the top right have a dangerous combination: a high concentration of cases and vulnerable seniors.
Multiple counties in New York occupy the top right quadrant, with Yonkers being the worst off. Los Angeles county, which has a similar population to all counties in New York City, has fewer cases and a smaller proportion of seniors.
To date, outbreaks have been mostly focused in urban areas where populations tend to be younger. However, as COVID-19 begins infiltrating rural areas, healthcare systems will need to contend with both older age groups and fewer resources.
Every Vaccine and Treatment in Development for COVID-19, So Far
As the number of confirmed COVID-19 cases continues to skyrocket, healthcare researchers around the world are working to defeat the virus.
Every Vaccine and Treatment in Development for COVID-19
As the number of confirmed COVID-19 cases continues to skyrocket, healthcare researchers around the world are working tirelessly to discover new life-saving medical innovations.
The projects these companies are working on can be organized into three distinct groups:
- Diagnostics: Quickly and effectively detecting the disease in the first place
- Treatments: Alleviating symptoms so people who have disease experience milder symptoms, and lowering the overall mortality rate
- Vaccines: Preventing transmission by making the population immune to COVID-19
Today’s graphics provide an in-depth look at who’s in the innovation race to defeat the virus, and they come to us courtesy of Artis Ventures, a venture capital firm focused on life sciences and tech investments.
Editor’s note: R&D is moving fast on COVID-19, and the situation is quite fluid. While today’s post is believed to be an accurate snapshot of all innovations and developments listed by WHO and FDA as of March 30, 2020, it is possible that more data will become available.
Knowledge is Power
Testing rates during this pandemic have been a point of contention. Without widespread testing, it has been tough to accurately track the spread of the virus, as well as pin down important metrics such as infectiousness and mortality rates. Inexpensive test kits that offer quick results will be key to curbing the outbreak.
Here are the companies and institutions developing new tests for COVID-19:
The ultimate aim of companies like Abbott and BioFire Defense is to create a test that can produce accurate results in as little as a few minutes.
In the Trenches With Coronavirus
While the majority of people infected with COVID-19 only experience minor symptoms, the disease can cause severe issues in some cases – even resulting in death. Most of the forms of treatment being pursued fall into one of two categories:
- Treating respiratory symptoms – especially the inflammation that occurs in severe cases
- Antiviral growth – essentially stopping viruses from multiplying inside the human body
Here are the companies and institutions developing new treatment options for COVID-19:
A wide range of players are in the race to develop treatments related to COVID-19. Pharma and healthcare companies are in the mix, as well as universities and institutes.
One surprising name on the list is Fujifilm. The Japanese company’s stock recently shot up on the news that Avigan, a decades-old flu drug developed through Fujifilm’s healthcare subsidiary, might be effective at helping coronavirus patients recover. The Japanese government’s stockpile of the drug is reportedly enough to treat two million people.
The progress that is perhaps being watched the closest by the general public is the development of a COVID-19 vaccine.
Creating a safe vaccine for a new illness is no easy feat. Thankfully, rapid progress is being made for a variety of reasons, including China’s efforts to sequence the genetic material of Sars-CoV-2 and to share that information with research groups around the world.
Another factor contributing to the unprecedented speed of development is the fact that coronaviruses were already on the radar of health science researchers. Both SARS and MERS were caused by coronaviruses, and even though vaccines were shelved once those outbreaks were contained, learnings can still be applied to defeating COVID-19.
One of the most promising leads on a COVID-19 vaccine is mRNA-1273. This vaccine, developed by Moderna Therapeutics, is being developed with extreme urgency, skipping straight into human trials before it was even tested in animals. If all goes well with the trials currently underway in Washington State, the company hopes to have an early version of the vaccine ready by fall 2020. The earliest versions of the vaccine would be made available to at-risk groups such as healthcare workers.
Further down the pipeline are 15 types of subunit vaccines. This method of vaccination uses a fragment of a pathogen, typically a surface protein, to trigger an immune response, teaching the body’s immune system how to fight off the disease without actually introducing live pathogens.
No Clear Finish Line
Unfortunately, there is no silver bullet for solving this pandemic.
A likely scenario is that teams of researchers around the world will come up with solutions that will incrementally help stop the spread of the virus, mitigate symptoms for those infected, and help lower the overall death toll. As well, early solutions rushed to market will need to be refined over the coming months.
We can only hope that the hard lessons learned from fighting COVID-19 will help stop a future outbreak in its tracks before it becomes a pandemic. For now, those of us on the sideline can only do our best to flatten the curve.
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