What happened

Coronavirus fears raised their ugly heads in a big way this morning, and all sorts of stocks related to the travel industry are suffering for it. For example, in midday trading, shares of travel reservations specialist Booking Holdings (BKNG -0.45%) dropped 5.4%, Brazilian airline Azul (AZUL -0.34%) descended 8.3%, and hotelier Marriott International (MAR -0.13%) suffered a 6.9% loss.

So what

So what upset the apple cart this time? Look to the United Kingdom.

Map of the United Kingdom under a magnifying glass

Image source: Getty Images.

The U.K.'s chief scientific advisor just warned that the country faces a second wave of the coronavirus, in which daily infections could soar to 50,000 new cases per day by mid-October. In London, Mayor Sadiq Khan is reportedly discussing new restrictions to curtail the spread of the virus and, more generally, the entire U.K. is apparently considering "locking down" with measures that could include quarantines and curfews for a second time.      

Now what

Granted, for the time being, it's only the United Kingdom considering new restrictions, not a global lockdown. You might not expect that to impact a South American airline like Azul, for example, or even Marriott, which gets 79% of its revenue from within the United States.

A U.K. lockdown could interrupt travel across the globe, however -- and across Europe, in particular -- depressing demand for air travel (Azul), hotel reservations (Marriott), and travel agent services (Booking Holdings). Moreover, just because it's the U.K. talking about an impending second wave of COVID-19 cases today does not mean that the phenomenon will be contained to there alone.

But neither does it mean that lockdowns will return everywhere.

Just last week for example, The Wall Street Journal detailed how a second wave of coronavirus infections is in fact spreading across Europe already, particularly in France and Spain. And yet, the Journal notes that "the Continent's governments are determined to avoid large-scale lockdowns and instead seek less disruptive ways to live with the new disease."  

While investors are worrying today about a second wave of lockdowns and a deepening recession, there's still a chance that cooler heads will prevail.