It was a tough end to the week for ASX travel shares as coronavirus restrictions reappeared in Victoria.
Why are ASX travel shares under pressure?
While the S&P/ASX 200 Index (ASX: XJO) fell 0.6% on Friday to close at 6,806.70 points, many of the biggest travel shares saw large losses.
The Webjet Limited (ASX: WEB) share price fell 3.9% lower on Friday and 9.6% for the week. It was a similar story for other ASX travel shares including Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT) down 7.2% and 5.9%, respectively.
Even Qantas Airways Ltd (ASX: QAN) shares slumped 4.8% on Friday. Deteriorating conditions and the reintroduction of Victorian lockdown restrictions made investors nervous to close the week.
The large share price losses came as Victoria introduced a snap 5-day lockdown. The state has made the call to try and get COVID-19 cases under control. Victorians have re-entered stage 4 lockdown until 11.59pm on Wednesday as fears of the UK strain of the coronavirus grow.
Tightening border restrictions and increasing uncertainty saw investors sell down on Friday. The stop-start nature of border re-openings has made it difficult for businesses of all sizes to plan. That uncertainty has caused angst amongst key members of the business community.
The Victorian business community called for greater continuity amid fears businesses will take a significant hit from the latest lockdown.
Spectators will be unable to attend the Australian Open as planned for the next 5 days due to tightening restrictions. That means fewer tourists than had originally been hoped for one of Melbourne’s showcase events.
That saw ASX travel shares get hit hard on Friday as the benchmark ASX 200 Index slid lower to close the week on a weaker note.
Foolish takeaway
ASX travel shares were smashed on Friday to continue a downward trend throughout the week.
With a 5-day snap lockdown announced for Victoria, all eyes will be on Daniel Andrews and the Victorian Government for case numbers throughout the next week.
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More reading
- ASX 200 Weekly Wrap: ASX cools on earnings reality check
- 5 things to watch on the ASX 200 on Monday
- 5 things to watch on the ASX 200 next week
- Is the Webjet (ASX:WEB) share price a buy right now?
- These were the best performing ASX 200 shares last week
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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