We can try and talk it away as much as we want, but the fact is, novel coronavirus or COVID-19 is one of the biggest threats facing our industry perhaps ever. Not because of the illness itself, or the quarantines or even the deaths – but because the perception of those things happening is scaring people so much that they are becoming afraid to travel. And that fear is a huge threat to our industry.
It’s hard to keep up with news that changes almost hourly, and it is premature to estimate what the revenue loss will mean for global tourism as we don’t yet know yet how the outbreak will develop. But let’s be insular and just look at what it means to those of us in the industry – to what the impact will be on Travel and Tourism. ‘
‘Don’t panic’ say a number of people. Don’t be ‘alarmist’ say others. But we cannot be willfully blind to what is happening around us. So, let’s take a practical look at the situation.
Travel and Tourism is one of the largest industries in the world, with US $5.7 trillion in revenue. It is responsible for an estimated 319 million jobs, or roughly one in 10 people working on the planet – no other sector is more at risk from the novel coronavirus.
According to Gloria Guevara, the head of the World Travel and Tourism Council (WTTC), the coronavirus epidemic will cost world tourism at least US $22 billion owing to a drop in spending by Chinese tourists.
The economies most likely to suffer, according to researchers, would be those most dependent on Chinese tourism, such as Hong Kong and Macau, Thailand, Cambodia and the Philippines.
The losses could more than double, reaching as much as US $49 billion if the crisis lasts as long as the SARS outbreak, which began in November 2002 and was brought under control in July 2003.
Cancellations and closures
The cancellation of ITB Berlin makes a huge statement within the industry. The cancellation or cutback of flights to countries with coronavirus patients, the denial of entry into countries of travellers who have visited other high risk areas, the news and images of ships being denied entry into ports, the stories of passengers in quarantine, the images of people in masks, of empty shelves in supermarkets and drugstores – all these factors cannot help but shake the public’s confidence in travel.
Travellers are checking their cancellation and insurance policies. Businesses are restricting their employees from flying when not necessary. In many areas hotels and restaurants are watching reservations cancelled and numbers dwindle.
Travel and tourism, said Mark Zandi, chief economist with Moody’s Analytics, “Is on the front line of the fallout.
“It’s the most directly and immediately impacted.”
In Canada
There have been a total of 11 reported cases in Ontario and eight in B.C. since the outbreak began. Another patient in Quebec is presumed to have the virus after receiving positive test results locally, but the diagnosis still has to be confirmed by the National Microbiology Lab in Winnipeg.
ACTA
ACTA (The Association of Canadian Travel Agencies) conducted a survey of members to find out more about what is happening in the marketplace due to the COVID-19 emergency.
The survey revealed that consumers are concerned not just about Asia, but about cruising in particular and travel in general.
Of clients already booked for future travel
• 56% of agents reported clients were looking for reassurance about whether to travel
• 27% reported clients wanted to cancel
• 17% reported clients wanted to postpone, change date or destination.
Asia cruises and river cruises top cancellation requests
In terms of what trips clients are looking at, Asia cruises and Asia river cruises topped the “cancel or change” list, with Caribbean Cruises next and Europe bookings close behind, but there were a large number of requests to change or cancel the Caribbean and Mexico as well. Smaller numbers of requests to cancel or change were also received for US destinations.
Future sales slower than normal for Asia cruises, cruises in general – and Europe
For future booking patterns,
• 87% of travel agents said Asian cruises are slower than normal
• 85% said Asian river cruises are slower than normal.
• 58% of agents reported Europe cruise sales are slower than normal
• 47% reported Caribbean future cruise sales are slower than normal
On the flip side, the majority of agents (over 50%) said that future bookings were normal for the Caribbean and Mexico, the US Central & South America and Europe (non-cruise).
The survey had a total of 401 respondents from across Canada. About 57% of these agents work in storefronts; 21% are home based with host agencies; 11% are corporate travel; about 7% call centre and about 5% wholesaler.
Around the world
The virus has spread to more than 60 countries, and more than 3,000 people have died from the COVID-19 illness it causes. More than 88,000 have been infected, on every continent but Antarctica.
In the US, the governor of Washington has declared a state of emergency after a man died there of COVID-19, the first such reported death in the United States. More than 50 people in a nursing facility are sick and being tested for the virus.
So far in that country, 62 people have been diagnosed with COVID-19.
Health officials in the Dominican Republic and France on Sunday reported the first confirmed cases of the new coronavirus in the tourist-rich Caribbean, while British cruise ship passengers who had been trapped at sea due to virus fears were finally set to come home.
Dominican Public Health Minister Rafael Sanchez Cardenas said a 62-year-old Italian man had arrived in the country on Feb. 22 without showing symptoms. He was being treated in isolation at a military hospital and “has not shown serious complications.”
France meanwhile, reported a case on the Caribbean island of Guadeloupe, the first in one of France’s overseas territories. In France itself, the Louvre Museum is closed and officials advised residents to forgo customary greeting kisses.
Islam’s holiest sites were closed to foreign pilgrims, while professional baseball teams played in deserted stadiums in Japan.
School closures in China, Hong Kong, Vietnam, Mongolia, Japan, Iran, Pakistan, Iraq and Italy have affected millions of students. The US, Australia and the UK have said that if the outbreak worsens they could do the same. Some students have access to online classes, others do not.
Australia and Thailand reported their first deaths Sunday, the 35-year old Thai man who worked as a salesperson and had contact with foreign tourists.
The Dominican Republic (and this one is very concerning to Canadian tourism) and the Czech Republic recorded their first infections.
Towns have been quarantined in some areas. People are wearing masks in public places.
Coronavirus cases surged in Italy. Italian authorities said the number of people infected in the country soared 50% to 1,694 in just 24 hours, and five more had died, bringing the death toll there to 34. Cases in France jumped to 130, an increase of 30 in one day.
China, where the epidemic began in December, reported 202 new cases in its update Monday, the lowest increase since Jan. 21. The city of Wuhan had most of the new cases but also saw 2,570 patients released, continuing a trend that frees up patient beds in the prefabricated isolation wards and hastily built hospitals in the area where the disease has hit hardest.
That brings China’s totals to 80,026 cases, with 2,912 deaths, the vast majority in Wuhan and surrounding Hubei province, which still accounts for about three-quarters of the world’s cases.
South Korea has the world’s second-highest cases with 4,212, mostly in and near the southeastern city of Daegu. It has reported 22 deaths.
Iran’s death toll climbed to 54 and its cases jumped overnight by more than half, to 978.
Pakistan’s interior ministry said it was closing its Chaman border with Afghanistan for a week amid the virus outbreak. Pakistan has confirmed four cases, and Afghanistan has confirmed one case.
Cases in the US climbed to at least 76 with two deaths, both in Washington state, at least one of the deaths to a man with underlying health conditions but who hadn’t travelled to any affected areas.
The last group of about 130 crew members got off the Diamond Princess on Sunday, vacating the contaminated cruise ship and ending Japan’s much criticized quarantine that left more than one fifth of the ship’s original population infected with the new virus.
In France, parish priests were advised not to administer communion by placing the sacramental bread in worshippers’ mouths. Instead, priests were told to place the bread in their hands.
UN Secretary-General Antonio Guterres recommended that a meeting March 9 where about 10,000 people are to commemorate the 25th anniversary of a UN. conference on women’s rights be drastically scaled back because of the spread of COVID-19.
Some cancellations and closures
ITB Berlin is the largest cancelled event so far, but there are others and look for that trend to continue unless there is a drastic change to the spread of the virus.
The Venice Carnival cancelled.
Tokyo Disneyland, Universal Studios Japan and Legoland Japan announced they would close. Tokyo Disneyland is the third Disney park to close after the Hong Kong and Shanghai parks closed a month ago.
One large event that was cancelled in Japan – a concert series by the K-pop supergroup BTS.
The ITB China organizers have announced the postponement of ITB China 2020, originally scheduled to be held on 13 – 15 May at Shanghai World Expo Exhibition and Convention Center. The deferred show dates will be further announced by the show organizers
A Shopify Unite 2020 conference in Toronto has been cancelled. More than a thousand partners were expected to attend.
The PATA Annual Summit 2020 in Ras Al Khaimah, United Arab Emirates from March 31-April 3 will no longer take place.
The Government of French Polynesia and Tahiti Tourisme decided to cancel the annual tourism industry event in Tahiti, the ParauParau Tahiti – PPT 2020.
And the bottom line…
One cannot help but draw the conclusion that there will be a significant impact on travel and tourism in 2020, and that cruising and aviation will likely take the biggest hit. Many cruise lines have already cancelled or altered scheduled sailings to China and in and around Asia as coronavirus continues to spread.
Working with the Cruise Lines International Association (CLIA), they have reacted swiftly by cancelling sailings, rerouting others, restricting passenger and crew boarding, and boosting screening procedures for passengers boarding from Chinese ports or who have travelled in or through China, Hong Kong and Macao. In recent days, several have added South Korea, Italy and Iran to their no-board lists.
In addition, a number of ports in Asia and the South Pacific are barring ships with any suspected coronavirus onboard from docking.
The question remains however, as to how spooked the public have become by images of quarantined passengers on cruise ships and ports refusing to let ships dock or passengers disembark. It’s nothing any of us want to see, but the images are there.
As for aviation, Alexandre de Juniac, IATA’s Director General and CEO, acknowledged that these are challenging times for the global air transport industry, “the downturn in demand as a result of COVID-19 will have a financial impact on airlines—severe for those particularly exposed to the China market. We estimate that global traffic will be reduced by 4.7% by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the Global Financial Crisis of 2008-09.
“And that scenario would translate into lost passenger revenues of $29.3 billion. Airlines are making difficult decisions to cut capacity and in some cases routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines.”
And let’s spare a thought for the workers on the front lines. The medical workers, airline staff and flight attendants, hotel and restaurant workers – all required to work unless and until they are quarantined.
Extrapolate that to public transit – and public transit riders and workers, to cabs and Uber drivers, deliveries. I’m not trying to be alarmist, just realistic. Yes, we all hope this will be over in a month or two – perhaps sooner. But let’s look at the facts. Some airlines are already offering workers ‘unpaid leave’, hotels are doing the same or laying off staff, Chinese factories are operating below capacity – all of this is highly publicized – and potential travellers are seeing it on their screens in a never ending loop.
Batten down the hatches (and wash your hands) it’s going to be a rough ride.
Notifications
Destinations and companies have quickly issued notifications regulations and restrictions – here are some you could find useful. We will continue to update.