Impact of the coronavirus (covid-19) on tourism revenues in italy 2020, by sector
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Recent History
Passengers from China Southern Airlines Flight CZ319 arrive at Australia’s Perth International Airport in February.
Photographer: Paul Kane/Getty Images AsiaPac
Severe acute respiratory system (SARS) is one example the industry is studying for guidance. It took WHO roughly four months from the moment it announced a global alert about SARS until it said the disease was contained, and then an additional five months for the organization to wrap up its efforts to tally new cases. According to aviation analysts at AirInsight, the SARS outbreak cost airlines $10 billion, and that was at a time when global business was less developed.
If it similarly takes nine months for the Covid-19 outbreak to pivot into “recovery” status, which is consistent with the industry outlooks cited here, aviation will take a bigger hit. And it will take longer still for hotels and destinations to fully return to tourism levels before the disease’s spread.
“Think about Fukushima,” Heald says, referring to the 2011 nuclear disaster at Japan’s Fukushima Dai-ichi nuclear plant. “People didn’t regain trust or interest in travel to Japan for years.” The flip side is that when they did, she says, there was such pent-up demand that it led to a boom in tourism: Overseas arrivals rose from 13.4 million in 2014 to 31.2 million in 2018. After many years of reassuring travelers they didn’t need to worry about radiation exposure, Japan suddenly became the fastest-growing destination in the world.
Ezon agrees this tide will ebb and flow. “If SARS was bad, this will be worse,” he says. “But remember Ebola? It’s still in Africa, and safari bookings are stable. Remember chikungunya? Once the news cycle moves on,” he says, “people will forget. Just like everything else, it’ll bounce back.”
Thailand COVID 19 Cases: Confirmed, recoveries and deaths
Confirmed coronavirus cases in Thailand reached 1,651. The country reported first coronavirus death on 01 March.
Thailand COVID 19 cases recorded the highest jump on 19 March. The latest cases are reported from the Lumpini Boxing Stadium, entertainment venues in Bangkok and religious ceremonies apart from a few imported cases.
One of the three new cases reported on 26 February had recently travelled to the Hokkaido region of Japan but initially denied having left the country. The infected person later admitted to having been to the affected region and was given the coronavirus test. He is currently being treated at the B.Care Medical Center in Bangkok.
China vs. the Rest of the Continent
The spa treatment room at Anantara Quy Nhon Villas in Vietnam.
Source: Anantara Quy Nhon Villas
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.
The broader Southeast Asia region had been benefiting from the overflow, but that momentum is on hold. “People are canceling Sri Lanka and India just because it’s part of Asia,” Ezon says. “There haven’t even really been cases there, but so much is unknown that people are just staying away.” (Sri Lanka has reported one case of someone infected with the new coronavirus and India has reported three so far, according to Bloomberg’s coronavirus tracker.)
Hotels understand travelers’ fears, nonsensical as they may seem. Many have extended gracious policies allowing people to change their plans throughout the Asia-Pacific region at no cost, as long as they rebook before the 2020 festive season. Like Heald and her fellow travel specialists, many hotels are hoping to best retain their 2020 revenues and mitigate outright cancellations.
That’s less of an option for operators such as Guy Rubin, founder of Imperial Tours, whose entire business is based on luxury trips to the Chinese mainland. “Obviously, we have had cancellations and postponements for January, February, and March,” he says. But even travelers with itineraries for October have been inquiring about cancellations.
Others are in a holding pattern, waiting to see if the current strategy of quarantining people to contain the virus works. “If the containment strategy works, then I imagine people will be traveling in China again by summer,” Rubin says. “If it does not work, then I imagine it will take a year for people to regain trust in China.”
Weather, weather, weather
A section of the Great Wall of China
Photographer: Fred Dufour/AFP
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.
Preventive measures by the Thailand government
Thailand raised its travel advisory to level 3 on 23 January 2020, advising to avoid all non-essential travel to China. The country was placed under a state of emergency on 26 March until 30 April. Many regions have been placed under lock-down, borders have been closed and all foreign citizens have been barred from entering the country. The Department of Disease Control (DDC) has also placed health surveillance systems at 28 other airports.
Screening measures have also been placed at all hospitals admitting patients with symptoms of the coronavirus infection including fever, cough, and sneezing. Health educators have been advised to perform screening within the community and alert any cases to the DDC on its hotline number 1422.
The Thailand government denied entry to the MS Westerdam cruise ship, as a precautionary measure, despite no suspected cases reported. The ship with 1,455 passengers and 802 crew on-board was also denied entry by ports in Guam and Manila before being allowed to enter Cambodia on 13 February.
The MotoGP race scheduled to be held in March has been cancelled due to travel restrictions and health concerns related to coronavirus.
The government has announced the cancellation of the Thai New Year celebrations called Songkran. It has also issued an order to close all schools and colleges in the country for two weeks. Entertainment venues, movie theaters and sports venues will also be closed for 14 days as Bangkok coronavirus cases have started to increase.
The island of Phuket has been placed under lock-down from 30 March to contain the spread of coronavirus. Further, all airports in the island are expected to be closed from 10 April to 30 April. The move has prompted more than 60,000 migrant workers from Laos, Cambodia, Myanmar to leave the country.
How prepared is Thailand to deal with the epidemic?
A note by the Thailand Embassy stated that Thailand was Asia’s most prepared country in the event of an epidemic, as ranked by Johns Hopkins University, and sixth out of 165 countries globally.
Thailand ranked second in having a robust health system capable of treating the sick and protecting healthcare workers. It was ranked third in the prevention of the emergence or release of pathogens.
Thailand’s Ministry of Public Health launched the ‘Big Cleaning Week’ on 04 February to make the general public aware of personal hygiene practices at the workplace, home, and public places. Hotel operators have been advised to monitor the health of tourists for coronavirus symptoms.
China being the biggest exporter of goods to Thailand, a negative impact on trade is imminent. China accounts for approximately 20% of Thailand’s imports. Thailand’s exports to China are feared to come down by $65m approximately, according to the Thai National Shippers’ Council as reported by Reuters.
Thailand already saw a weak Q2 2019, during which the exports fell by 7.9%, while Q3 was no different. The services sector offset the slow down caused by the manufacturing sector, but may not rescue the economy in Q1 2020.
Here’s a snapshot of Thailand’s trade:
Industries that are expected to be hit by the coronavirus outbreak in Thailand are tourism, aviation, shipping, and hospitality (including hotels and restaurants).
Thailand is estimated to lose $1.15bn in revenues from tourism in Q1 2020 due to fall in Chinese air travellers alone, according to estimates by International Civil Aviation Organization (ICAO). The impact could be deeper considering a steep fall in visitors from rest of the world.
Bank of Thailand estimates that the economy may contract by 5.3% in 2020, revising its earlier estimate of 2.8%.
The list of flight cancellations to multiple countries by flag carrier Thai Airways has increased ever since the coronavirus outbreak in Wuhan. The airline has acknowledged that coronavirus has an adverse impact on its business.
The Civil Aviation Authority of Thailand has approved plans by various airlines to scale back or completely stop flights. These airlines include Thai Airways International, Bangkok Airways, Thai AirAsia, Thai AirAsia X, Thai Lion Air, Nok Air, Nok Scoot and Thai Vietjet Air. The airlines hope to resume flights by mid-April or by early May.
Thailand took immediate fiscal measures to reduce the economic impact of the coronavirus outbreak.
The government approved two stimulus packages including 400 billion baht ($12.7bn) to benefit 14.6 million low-income earners. The package includes the provision of soft loans worth 150 billion baht ($4.58bn) lent at an interest rate of 0.01%. The package also includes extension on debt payments.
The second stimulus package worth 117 billion baht ($3.6bn) included cash handouts worth 45 billion baht ($1.38bn) to three million workers as well as soft loans worth 60 billion baht ($1.83bn).
Philippines is also planning to announce a third stimulus package worth 500 billion baht ($15.3bn).
The Thai Secretary of the Monetary Policy Committee (MPC) announced its decision to reduce the policy rate by 0.25% from 1.25% to 1%. The decision was taken following an assessment of the Thailand economy, which is expected to witness a slower growth rate in 2020 owing to the impact of the coronavirus outbreak and the delay in the enactment of the Annual Budget Expenditure Act.
The MPC noted that the financial stability of the country was vulnerable and more accommodative monetary policies would help in alleviating the negative impact caused by the outbreak. It recommended that liquidity provision and debt restructuring will help the businesses and households impacted and hence recommended the policy rate cut.
Non-fiscal measures: Minimising the impact on tourism
Tourism is a crucial sector for Thailand accounting for 12% of the country’s GDP. Chinese tourists account for the majority of the tourist population. The services sector alone accounts for approximately one-tenth of Thailand’s GDP.
Health concerns over coronavirus in Thailand have led to a decline in the number of tourists arriving in the country. The Thai Tourism Ministry estimates that the coronavirus impact could result in a revenue loss of 50 billion baht ($1.52bn) for the tourism industry, as quoted by Reuters.
Thai Hotels Association (THA) estimates that more than 30,000 hotels are expected to lose all revenue in April. Hoteliers in Phuket are expected to post the highest losses due to the lock-down. Pattaya is one of the worst affected tourist spots in the country, as its economy is almost entirely dependent on tourism.
The government is also taking preventive measures such as:
- Placing screening systems at popular tourist spots such as Asiatique The Riverfront
- Advising visitors to wear masks
- Providing alcohol-based sanitisers and masks at attractions such as Siam Niramit
- Performing additional cleaning and disinfection across public transportation
Thai authorities are also considering to limit export of surgical masks to avoid shortage in the country, the demand for which has been surging since the epidemic’s outbreak. Thailand exports approximately 400 million masks a year.
