Alternative Data Part II: Evaluating the Impact of the Coronavirus
Tags: Alternative Data, Corona, Travel Industry, Web Conferencing, Investors

After hitting China, Iran and several countries in Western Europe, the coronavirus is starting to take hold in the U.S. At the time of this article, there are approximately 1,000 known cases of COVID-19 in the U.S. While this number may seem low, investors know how exponential growth can quickly get out of hand.

The U.S. stock market is well aware of the potential ramifications of a pandemic on the U.S. economy. On March 9, the Dow dropped over 2000 points as the virus spread. U.S. President Donald Trump has already announced tax cuts, hoping to calm markets down.

The impact of the coronavirus on the U.S. economy is still up for debate. Many believe it has the potential to disrupt supply chains and drive the workforce to adopt remote working options. Others, like the U.S. President, believe COVID-19 is no worse than the flu.

SimilarWeb allows us to explore digital trends in real-time. By doing so, it is providing a much-needed data-driven approach to evaluating the impact of the coronavirus on the U.S. economy in general, and different affected public companies in particular.

Positively Impacted: Grocery Delivery Services & Web Conferencing Tools

Over the past few weeks, many Americans have clearly made an effort to stock their pantry ahead of feared food shortages. Grocery stores are experiencing longer lines than usual, and essentials are flying off the shelves across the globe. The same holds true for online grocery shopping. Compared to the week of March 6, 2019, traffic to grocery delivery services is up almost 60%, and the trend isn’t showing any signs of slowing down.

Usage of web conferencing tools has also risen sharply in the past few weeks, as more Americans are asked to stay home as a precautionary measure. Major conferences are being canceled, and many companies have shifted to video-conferencing instead of physical meetings, in order to lower the chances of infection. On average, the video communication industry is seeing 32% more traffic to its services than for the same period last year.

Negatively Impacted: Travel & Events

Unsurprisingly, different parts of the travel industry have been hit the hardest, as consumers and businesses are restricting their travel, given the COVID-19 outbreak. Traffic to online travel agencies is down 30% compared to the same period last year. The uncertainty surrounding the outbreak is bound to continue impacting the willingness of consumers to book vacations in the coming months.

Of course, this impacts major airlines as well, which have seen their traffic fall by almost 20% when compared to last year. Hotels and accommodation platforms have experienced a sharp drop in the first week of March. For the last week of February, their traffic was down 3% year-over-year (YoY). For the first week of March, that number jumped to 14%.

Ticketing and events platforms are also among the industries affected by the virus. As major sports leagues debate whether games should be suspended or played without a crowd, Americans seem to already be shying away from major gatherings. Once again, the trend is getting stronger by the week. For the week ended February 14, traffic to ticketing platforms was flat YoY. A week later, traffic dropped 10%, then 17%, and as of last week, YoY traffic to ticketing platforms is down 24%.

What Can We Expect Next?

SimilarWeb’s global data coverage allows us to compare the traffic of local players over time, and since the outbreak has started earlier in certain countries, it enables a sneak peek of what can be expected in different countries going forward.

In this instance, we can compare the performance of travel platforms in Hong Kong, impacted early by the outbreak, to travel platforms in the U.S., U.K., Germany, France, and Italy, who are in earlier stages of the outbreak.

The decline in traffic to Hong Kong’s travel platforms seems to have bottomed out at around 40%, and all the countries surveyed appear to be following the trend set by Hong Kong. Traffic to travel platforms in Italy, one of the countries most affected by the outbreak, has already dropped by 30%. As the virus spreads, it is likely that travel platforms around the world will continue to suffer from declines in traffic.

SimilarWeb’s Full Coronavirus Analysis

The insights in this blog post were taken from a recent whitepaper by SimilarWeb, Mapping the U.S. Coronavirus Impact, which provides a detailed analysis of the largest players in key industries that are affected by the virus.