U.K. Travel and Leisure Stocks Slide on Restrictions Report

(Bloomberg) -- U.K. travel and leisure stocks fell Wednesday after a report saying Prime Minister Boris Johnson will announce fresh restrictions in England to curb the spread of the omicron Covid-19 variant.

Pub and eatery operators Restaurant Group Plc and J D Wetherspoon Plc dropped as much as 6.8% and 4.7% respectively, while movie theatre-operator Cineworld Group Plc lost 8%, as the Financial Times said Downing Street had decided to implement a “Plan B” of measures -- including an order to work from home -- citing three officials.

Airlines also declined, with EasyJet Plc and British Airways-owner International Consolidated Airlines Group falling as much as 6.1% and 5.6%, respectively.

“The timing could be very unhelpful as the key booking period for summer holidays opens in late December and early January, and plan B would only damage demand,” Peel Hunt analyst Alex Paterson said by email. 

Domestic travel shares also declined, with bus and train operators The Go-Ahead Group Plc and National Express Group Plc dropping 8.3% and 6%, respectively. 

“Calls to work from home will clearly impact commuter demand,” added Paterson. 

The new restrictions could be announced at a press conference as early as Wednesday, the FT said, adding that they will include requiring vaccine passports for large venues. 

Travel stocks were also affected by weakening earnings momentum at TUI AG, but they later trimmed losses as vaccine-makers Pfizer Inc. and BioNTech SE said initial lab studies showed a third dose of their shot neutralized the omicron variant.

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