Corona virus brings long term effect for the global tourism industry

Sunday, February 16, 2020

Earlier this week, although infections of the novel corona virus seemed to be going down, the effects of the epidemic on the global tourism industry were speeding rapidly.

The impact of the pneumonia-like disease caused by the virus, known as Covid-19, is already being felt across Asia, where leisure and business travel contributed $884 billion to gross domestic product in 2017. For China alone, inbound tourism fetched $127.3 billion in 2019, according to the country’s tourism bureau.

However now, travel agents, operators, and hoteliers are bracing for at least months, if not a full year of economic disruption from the epidemic, with long-term effects that might even spill over to 2021.

To quote Jack Ezon, founder and managing partner of luxury travel agency Embark Beyond, “The numbers of trip cancellations—not just to China but to the entire continent of Asia—is growing every day. 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.’ ”

Up to now, almost 75% of Ezon’s travelers have canceled their February and March departures to Southeast Asian countries. “They’re worried about being anywhere close to the outbreak,” Ezon said. A full 100% of the honeymoons that his agency had booked to the region have also been canceled and rebooked for alternate destinations including the Maldives, Southern Africa and Australia.

Hilton Chief Executive Officer Chris Nassetta said that he expects the impact of the new corona virus to last from around six to 12 months: “Three to six months of escalation and impact from the outbreak, and another three to six on recovery,” Nassetta said. He estimated that the cost to his company could be from $25 million to $50 million.

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