The Government's decision to remove Spain from its safe list of countries Britons can travel to has thrown the travel sector into turmoil once more. But the impact will not be felt evenly and some companies might even come out of the crisis in a stronger position.
The Foreign and Commonwealth Office now advises against all but essential travel to Spain and people returning will need to self-isolate for two weeks. This could derail holiday plans and smash confidence in foreign travel just as the sector was beginning to get back on its feet.
Share prices of cruise, airline and tourism stocks have crashed: Tui, Europe's largest tourism group which has now cancelled holidays to mainland Spain for two weeks, has fallen 12pc. International Consolidated Airlines Group (IAG), the owner of British Airways, is down 7pc while easyJet has lost 9pc.
Cruise operator Carnival has sunk 8pc; Dart Group, which owns airline and packaged holiday brand Jet2, is down 10pc.
Travel companies will be forced to refund customers if they cancel flights or holidays, but analysts say the direct impact on the firms' bottom lines will be minimal.
Lost revenue from trips to Spain over the coming weeks will not bankrupt the businesses but the hit to confidence in foreign travel will have a major impact, argued Becky Lane, of investment bank Jefferies.
“We think the sudden change in Government policy could negatively impact customer confidence. People may decide to take a staycation or not go on holiday and next year's booking cycle will be delayed,” she said.
There will be more share price volatility in the travel sector because of further quarantine and lockdown risks, she added.
Ms Lane said Dart Group was the best-positioned company to come out of the crisis stronger.
Jefferies has a “buy” recommendation for the stock as it could take market share from its competition during these difficult business conditions. It is most concerned about Tui and said the share price could fall to 254p, down from 299p today.
However, other analysts were less positive. Helal Miah, of stock broker The Share Centre, said the selling today was tiny compared with the falls seen in March, as the airline industry was shut down. But this was indicative of more pain to come for investors.
“I would not be surprised if we saw more falls as a second wave of the virus appears and local lockdowns are announced. Regional lockdowns will be common and this will disrupt travel plans across Europe,” he said.
The volatility is here to stay so investors willing to ride out the storm until there is a full recovery in travel should buy the largest, most financial stable companies, such as IAG and easyJet, he said.
On the other hand, William Ryder, of fund shop Hargreaves Lansdown, said travel stocks were too risky and there were no defensive names left in the sector.
"If investors want to weather a second wave of infections they should look elsewhere and avoid amateur epidemiology – most of us are unqualified to have a strong view on whether or not we’ll get a second wave."