Global tourist industry faces struggle ‘for well over a year’

Travel stocks came under pressure in London this morning as wider economic tensions between the United States and China suppressed global markets. Read more: Global tourist industry faces struggle ‘for well over a year’

Global tourist industry faces struggle ‘for well over a year’

Travel stocks came under pressure in London this morning as wider economic tensions between the United States and China suppressed global markets.

Analysts raised the prospect of tourism taking well over a year to fully recover to pre-pandemic levels, knocking shares in leading airlines, cruise companies and hotel chains.

Intercontinental Hotels Group was among the largest fallers, declining by 5.7 per cent, or 201p, to £33.42, after Deutsche Bank predicted that demand could “take some time to revive”, meaning that a full recovery “could well be into 2021 and beyond”.

“While the broader market seems to be factoring in a return to normalcy for most sectors, we believe hotels and restaurants will see a delayed recovery as the sector might be one of the last to be re-opened,” the broker told clients.

It sliced its target price from £46 to £43, noting that the operator behind Holiday Inn and Crowne Plaza will endure between three and four months without almost any revenue “even if we consider the sector opening up by July”.

Shares in Carnival, the world’s biggest cruise company, dropped 8.5 per cent, or 85p, to 918p. Easyjet, the budget airline, fell 7.6 per cent, or 43 ¼p, to 524¾p.

The FTSE 100 was trading down 0.55 per cent, or 32 points, at 5,731 shortly before lunchtime as the world’s leading economies exchanged barbs, sending equity indices across Asia and Europe into retreat.

The Trump administration, which has threatened Beijing with tariffs, claimed over the weekend that there was “enormous evidence” that Covid-19 originated in a laboratory in the Chinese city of Wuhan but declined to provide any. State media outlets in China have accused Mike Pompeo, the US secretary of state, of “bluffing”.

The FTSE 250 slipped 1.4 per cent, or 226 points, to 15,992.

Dechra Pharmaceuticals, the mid-cap veterinary healthcare, provided some light following an upgrade by Jefferies, which lifted its rating from “hold” to “buy” and downgraded Virbac, the company’s French rival. Shares in Dechra rose 1.3 per cent, or 36p, to £27.36.

Persisting uncertainty around how much longer shutters will remain down on pubs and cinemas continues to plague Mitchells & Butlers, Marston’s and Cineworld, which were all more than 8 per cent lower.

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Global tourist industry faces struggle ‘for well over a year’

Source : Business Matters More   

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Banks facing deluge of bounce back requests from struggling SMEs

Banks could find themselves swamped by requests from small businesses for state-backed loans of up to £50,000 and unable to meet all demand, according to the chief executive of Starling, the digital bank. Read more: Banks facing deluge of bounce back requests from struggling SMEs

Banks facing deluge of bounce back requests from struggling SMEs

Banks could find themselves swamped by requests from small businesses for state-backed loans of up to £50,000 and unable to meet all demand, according to the chief executive of Starling, the digital bank.

Lenders are already struggling with complex processes behind the coronavirus business interruption loans and could struggle to cope with the number of businesses applying for the new “bounce back” loans, Anne Boden told MPs this morning.

“I think there is going to be a scale problem here,” she said. She suggested that big banks might not be able to handle the potential deluge in demand for the loans, leading to difficult questions about which customers to prioritise.

Businesses may also feel that they need to get in at the front of the queue in case the loans run out, she added. “We have to look to the government to manage expectations and to give reassurance about banks’ processes and to say that the loans won’t run out,” Ms Boden said as she gave evidence to the Treasury select committee alongside executives from four big banks.

Her warning came as customers of Barclays expressed frustration on social media about difficulties accessing the loans, which were launched at 9am today across the industry after a scramble to get them ready.

The loans of between £2,000 and £50,000 are aimed at small businesses that have struggled to gain access to the 80 per cent government-backed CBILS. Bounce-back loans come with a 100 per cent government guarantee, with the Treasury setting the price for all lenders at 2.5 per cent after the interest-free period, compared to CBILS pricing of between 3 per cent and 5 per cent.

Matt Hammerstein, chief executive of Barclays’ UK business, denied that the system had crashed and said that it should be working well by the middle of the day. He added that 200 applications had been filed within the first minutes of it going live.

Photo: depositphotos.com

Read more:
Banks facing deluge of bounce back requests from struggling SMEs

Source : Business Matters More   

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