Global tourism destinations sweat over Chinese travel drought

0
315

Affected by coronavirus, China’s tourism industry may lose more than one trillion yuan and many businesses will collapse in the coming months. As the epidemic spreads, the global tourism industry will also face a severe blow.

All across China, scenic areas are closed, hotels are idling, restaurants are closed, OTA (Online Travel Agency) platforms and major hostels are still bothered by the issue of refund and change of travel plans.

In order to protect consumers’ rights and interests, platforms including Ctrip, Feizhu, Qunar.com, Ma Honeycomb, Tongcheng Yilong and other OTAs are constantly upgrading the scope of free withdrawal and re-signing, and the amount of refunds on several platforms has reached hundreds of millions of yuan.

Flying Pig said that from January 23 to 31, the cancellation rate for domestic travel orders in its platform is 70% -80%, and the cancellation rate for overseas travel orders is 40% -50%.

Compared with travel agencies, scenic spots, restaurants, hotels and other companies need to bear more fixed expenses such as employee salaries.

According to Zhongxin Tourism, in the worst case, the company’s first quarter revenue is expected to decrease by 1 billion to 1.5 billion compared with the same period last year. In the first quarter of 2019, Zhongxin Travel’s operating income was 2.458 billion yuan.

The country’s tourism industry may be under greater pressure without revenue for 2 to 3 months, or to remain at a very low revenue level for a long period of time.

Compared with the SARS period in 2003, the impact of the new pneumonia epidemic on tourism is more complicated. The outbreak may bring inestimable pressure to the cash flow of many enterprises.

“The recovery of the tourism industry in China is expected to be one to two months after no new confirmed cases,” said Iris Pang, ING Wholesale Banking’s economist for greater China.

If the outbreak is not brought under control by March, “we expect a drastic drop in the number of Chinese traveling within the country in the Labor Day holiday in May,” said Yao Xuanjie, an analyst with brokerage New Times Securities.

China’s impact on global tourism is immense. In such a severe situation, the global tourism industry has also entered a cold winter when more than 50 countries and territories have imposed travel restrictions and tightened visa requirements to contain the novel coronavirus.

The Australian government has extended its travel ban on people who have travelled through China by another week, Scott Morrison has announced.

The ban, initially set for 14 days and due to expire on Saturday, was extended on Thursday on the advice of Australia’s health authorities and the national security committee. The ban would be reviewed every week, the prime minister said.

Nikkei reports that popular Asian travel destinations face the risk of a prolonged decline in visitors from China, a group that generates around 20% of global tourism spending, as the coronavirus disrupts travel and shows signs of stoking anti-Chinese sentiment.

Japan has confirmed 33 cases, as of noon on Friday, as well as the 218 from the Diamond Princess cruise ship, which has been moored in Yokohama, south of Tokyo, since Feb. 3.

Today, a Japanese man was onfirmed as a new coronavirus patient after returning from his Hawaii vacation.

Tokyo Governor Yuriko Koike said Feb. 7 that Chinese runners have been asked “to voluntarily refrain” from joining the Tokyo Marathon, slated for March 1. The annual marathon — one of Asia’s largest, according to the organizer — is scheduled to welcome nearly 10,000 runners from abroad this year, with 18% coming from mainland China, Hong Kong and Macao.

Other Asian authorities and event organizers are taking actions aimed at curbing the spread of the epidemic.

The Philippines on Feb. 2 widened a travel ban covering visitors from Hubei Province to all foreign travelers from China, including Hong Kong and Macao. Singapore has banned the entry of foreigners who traveled to China within the previous 14 days, as has the U.S.

Singapore, which currently bars entry to Chinese passport holders, said Tuesday that it expects visitor arrivals to decline 25% to 30% this year, with a roughly $5 billion loss in tourism receipts.

Keith Tan, chief executive of the Singapore Tourism Board, said the city-state is losing an average of 18,000 to 20,000 arrivals daily, most of them Chinese. “The longer the situation persists, then naturally the fall will be greater,” he said.

Thailand saw a nearly 60% drop in Chinese visitors for the last week of January, the tourism ministry says, estimating economic losses at 9.15 billion baht ($294 million) between Jan. 24 and 31.

Vietnam’s tourism industry could lose up to $7.7 billion in the first three months of 2020, a government official said Feb. 6, due to cancellations of Chinese tours and a general downturn in domestic travelers and international arrivals.

Malaysian tourism faces a loss of over 400 million ringgit ($96.7 million) for February and March alone, as 5,000 tour groups from China have scrapped their trips, the Malaysian Inbound Chinese Association told reporters in Kuala Lumpur on Feb. 5. Angie Ng, the association’s president, urged Malaysians to travel within the country to help offset the drastic drop in Chinese travelers.

Travel restrictions related to the novel coronavirus from China could impact city and state economies across the United States, which have benefitted from a huge jump in tourism from China in recent years, analysts say.

Riverside, California, and Buffalo, New York, the closest big town to the vast Niagara Falls, would be among the hardest hit in a list of places from big cities to tourist towns particularly popular with Chinese visitors.

Major US airlines have suspended flights from China, and the Trump administration is barring foreign visitors who have been to mainland China over the past 14 days.

The virus will result in a $10.3bn loss in Chinese visitor spending in the US, most of that in 2020, Oxford Economics estimates.

By Winnie Troppie

LEAVE A REPLY

Please enter your comment!
Please enter your name here