The globe slows down
International travel has been hit hard during the novel coronavirus outbreak. Many insiders believe the strong will survive to grab more of the market after the recovery, Yang Feiyue reports.
Uthaithit Chamnongnit recently had to lay off a few employees because a major segment of her customers has vanished — Chinese.
Her guesthouse in Chiang Mai, Thailand, had previously been packed with Chinese during major holidays, especially Spring Festival, since it opened about a year and a half ago.
“We were fully booked for February before it (the novel coronavirus outbreak) happened,” Chamnongnit says.
She began to receive cancellations from Chinese guests, including two corporate groups and a student summer camp in February, soon after the virus grabbed headlines in late January.
“I’m looking at a 70 percent drop in business,” she says. “We hear of places in the city closing up, and many drivers are struggling.”
Chamnongnit is trying to get by with a few Thai and Western customers.
“I hope everything can get back to normal as soon as possible.”
Popular destinations around the globe have felt the epidemic’s impact, especially since Chinese are the world’s No 1 source of outbound travelers.
The outbreak is likely to cut China’s outbound visits by 27.63 million in 2020, the China Tourism Academy reports. Domestic visits will drop by 56 percent in the first quarter and 15.5 percent throughout the year, it says. Tourism income is forecast to drop by 1.18 trillion yuan ($167.72 billion) in 2020.
About 6.3 million Chinese traveled overseas during last year’s Spring Festival, the China Tourism Academy reports.
About 75 percent of outbound Chinese visit Asia during the festival, global travel-industry-analysis company ForwardKeys says.
Thailand will likely lose $9.7 billion in tourism income until June, Thailand’s Tourism and Sports Minister Pipat Ratchakitprakan says. Japan has also been hit hard. Duty-free sales at the country’s department stores have experienced double-digit drops during Spring Festival, Japanese newspaper Nihon Keizai Shimbun reports. Chinese made nearly 10 million visits to Japan in 2019.
Destinations further afield are also looking at tourism-income declines.
Chinese visitors to the US will likely decrease by about 28 percent in 2020, leading to $5.8 billion in economic losses, US-based travel-research institute Tourism Economics predicts.
Italy will likely lose over $5 billion in tourism revenue this year, according to an earlier local public opinion poll. The figure would be much higher as the country has recorded 323 confirmed cases and 11 deaths as of Wednesday, according to the country’s ministry of health.
Museums and schools have been closed in certain areas of Italy where infections were found, and the Venice Carnival and several Serie A matches were canceled due to the virus impact.
Ralf Ostendorf, market management director of VisitBerlin, the city’s tourism authority, says: “COVID-19, of course, has a tremendous effect on global tourism, not only in the short run.”
Hainan Airlines has stopped its direct flights from Beijing to Berlin like many other airlines have halted or reduced their flights to and from Chinese cities. And many countries, including Germany, have stopped issuing visas for a few weeks, he says.
The ITB China travel show that was supposed to take place in Shanghai in May has been canceled for now. Ostendorf says this subtracts a valuable opportunity to engage China’s travel industry.
About 350,000 Chinese spent at least a night in Berlin last year.
“Our target for 2020 was to reach at least 400,000. But, due to the present development, that target will be impossible to reach,” Ostendorf says.
Airlines, cruise lines, hotels, restaurants and tour operators are all feeling the pinch.
Major cruise companies Carnival and Royal Caribbean have canceled about 20 trips in China and don’t allow those who’ve been to China within two weeks to board. This is expected to affect tens of thousands of passengers.
Expert opinions toward recovery vary.
The World Travel & Tourism Council says it usually takes 19 months for tourist numbers to recover after an epidemic.
ForwardKeys spokesman David Tarsh believes the rebound will be faster than after SARS.
China Tourism Academy president Dai Bin is also optimistic about the year.
“It’s highly likely that tourism consumption in China will rebound. Many subjects of our recent surveys said they’ll travel after the epidemic,” he said during a recent online conference.
“Preferential government policies have enabled tourism businesses to shift from pessimism to take measures to save themselves and help each other.”
Some companies are engaging in online promotion. Some airlines have provided chartered flights to transport staff members to return to work. And some attractions have promised free tickets to medical workers.
China’s biggest online travel agency, Ctrip, has also voiced optimism about a post-epidemic recovery. Its bookings more than doubled a few months after SARS was contained in 2003.
“The mass cancellation of orders doesn’t mean they’ve disappeared. Rather, they’re postponed,” CEO Sun Jie previously told China Daily, adding that she believes explosive growth will come afterward.
The outbreak can serve as an opportunity for transformation and upgrades, says the CTA’s Wu Fenglin. Companies that survive the winter can blossom in the spring, Wu believes.
Jiang Shihua, who’s responsible for Utour Group’s development in Sabah, Malaysia, also predicts a thaw before summer.
The Beijing-based travel agency has invested in various links of Sabah’s tourism-industry chain, including transportation, scenic spots and accommodation.
Chinese tourists previously accounted for about 30 percent of visitors, Jiang says.
But he believes the epidemic will also force local tourism to upgrade.
“We’ll use the break to review and improve our work, and offer better services,” he says.
Jiang predicts the outbreak may wipe out travel businesses that weren’t performing well previously. Survivors will likely get bigger market shares.
“Sabah’s tourism has been on the rise. Resources will be redistributed after the epidemic,” Jiang says.
“It can level the playing field and give us more opportunities as a relative newcomer.”