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.
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.
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.
“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.”
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