Earlier this week, even as infections of the novel coronavirus seemed to be slowing, the effects of the epidemic on the global tourism industry were accelerating rapidly. #Chinavirus #Coronavirus #Coronavirusoutbreak #Wuhan #Coronavirussymptoms #China The impact of the pneumonia-like disease caused by the virus, called Covid-19, is already being felt across the Asian continent, where leisure and business travel contributed $884 billion to gross domestic product in 2017, the most recent year for which data has been compiled by the World Travel and Tourism Council. (Projections for 2018 are about $1 trillion.) For China alone, inbound tourism brought in $127.3 billion in 2019, according to the country’s tourism bureau.
But as diagnoses tick upward again, travel agents, operators, and hoteliers are bracing for at least months, if not a full year, of economic disruption from the outbreak, with long-term effects that may ripple well into 2021.
“The numbers of trip cancellations—not just to China but to the entire continent of Asia—is growing every day,” says Jack Ezon, founder and managing partner of luxury travel agency Embark Beyond. “People are put off. Sadly, a lot of them are just saying, ‘I don’t know if I want to go anywhere right now.’ Or, in many cases, ‘I’ll just go next year.’ ”
So far, almost 75% of his travelers have canceled their February and March departures to Southeast Asian countries, which the U.S. Centers for Disease Control and Prevention still considers to have a lower, level one risk for coronavirus. “They’re worried about being anywhere close to the outbreak,” he says, “or of getting stuck with canceled flights if other hubs become infected.” A full 100% of the honeymoons his agency had booked to the region have been canceled and rebooked for alternate destinations including the Maldives, Southern Africa, and Australia.
Hilton Chief Executive Officer Chris Nassetta told investors on Feb. 11 that he expects the impact of the new coronavirus to last anywhere from six to 12 months: “Three to six months of escalation and impact from the outbreak, and another three to six on recovery,” he said. He estimated the cost to his company could be from $25 million to $50 million.
When it comes to leisure travel, the biggest question usually revolves around location, location, location. Once that’s been decided, weather dictates all. “North Asia you can do year-round, but Southeast Asia is much more challenging,” says Catherine Heald, co-founder and CEO of the Asia-focused travel specialist Remote Lands. “Thanks to monsoons and very hot temperatures in most of that region,” which last roughly March through September, “people aren’t looking seriously at rebooking until the fall,” she says.
For families, school schedules can complicate plans. “We had one family looking at traveling over spring break, and they won’t have that same window of time until next year’s spring break,” she says. “They’re rebooking for 2021.” The same logic applies for those who specifically wanted to see cherry blossoms in Japan or flowers blooming alongside treks in Nepal—common reasons to plan a spring trip.
Heald’s clients are among the most likely to help the industry rebound. So far her company has seen fewer cancellations than have her competitors because of the way she targets leisure and high-spending travelers. An average trip with Remote Lands costs $1,500 per day for two people, which makes her a purveyor of bucket-list vacations—trips that people are desperately hoping to realize.
“People spend a lot of time and money planning these trips,” she says. “They want to make it happen.” Her workaround so far has been to simply reroute airfares through unaffected hubs, replacing routes through Hong Kong or Shanghai with connections in Tokyo, Seoul, or Dubai. The cost, she says, can range depending on availability of fares and type of tickets booked. “On a scale from 1 to 10, the disruption to our business has been about a 2 or 3,” Heald says, explaining that travelers’ willingness to postpone, rather than cancel, keeps her balance sheets mostly intact.
Business in China was already low this year because of negative press about trade wars. Heald says only 3 out of 400 trips she booked last year were China-only. Ezon agrees: “China was a little soft this year for leisure anyway, and Hong Kong was a mess from July” and the ongoing protests there.
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