Coronavirus threatens tourism in Emerging Asia – think tank

The rising number of cases of coronavirus poses a threat to tourism in emerging Asian economies as Chinese tourist constitute a sizeable portion of tourist arrivals in several countries, said Londonbased Capital Economics.

“If the outbreak continues to spread, one of main channels through which the regions will be affected is though a decline in tourist arrivals from China,” Capital Economics said.

“The number of Chinese traveling abroad has increased nearly 10-fold since the SARS outbreak in 2003 and spending by Chinese visitors now accounts for sizeable share if some of countries’ GDP, most notably Hong Kong, Cambodia, Thailand, and Singapore,” it said.

In the Philippines, China was the fastest-growing market from January to November 2019, with arrivals reaching 1.6 million out of the 7.4 million arrivals during the period, growing by 40.2 percent year-on-year.

Capital Economics said that during the SARS outbreak in 2003, the number of Chinese tourists fell by around a third.

“Overall though, lessons from past epidemics show that while the initial hit to the economy can be severe, growth tends to bounce back quickly after the virus is contained,” the firm said.

Equity markets in the region have also been hit hard, with the Chinese stock market faring worst.

Capital Economics noted though that because Asian households don’t hold much of their wealth in shares, swings in equity prices do no not have much impact on household spending and saving patterns.

The Philippines has suspended flights from Wuhan, China, the origin of the new coronavirus and will be deporting travelers from the city.