With around 100,000 cases and almost 3,500 deaths declared, the tourism industry, along with other global sectors, have been suffering devastating blows caused by the novel coronavirus outbreak. Officially named as the COVID-19, its effects are primarily felt not only in China but across the world.
Now, many individuals deemed it too great a risk to travel to other countries, given the spread of the virus and the recent recommendations of WHO about international traffic. Government closing off borders, airlines canceling flights, and event organizers postponing large celebrations also contribute to the decline of the tourism sector, particularly, in Asian countries.
To tackle these potential consequences and setbacks, here’s an infographic presenting the real impact of COVID-19 on Asia’s tourism sectors.
- December 31, 2019 – Cases of pneumonia in Wuhan, China, are first reported to the World Health Organization (WHO). According to the Wuhan Municipal Health Commission, such cases occurred between December 12 and 29.
- January 1, 2020 – Health authorities in China closed down the Huanan Seafood Wholesale Market, which is suspected to be the source of the virus.
- January 5, 2020 – China announced that the cases of pneumonia are not related to SARS and MERS.
- January 7, 2020 – Chinese authorities have identified the virus as a novel coronavirus. WHO initially named it the 2019-nCoV.
- January 9, 2020 – A 61-year-old man from Wuhan, China died after a respiratory failure caused by severe pneumonia. It is considered the first death caused by the coronavirus.
- January 13, 2020 – Thailand reports the first case of the novel coronavirus—the first outside of China.
- January 17, 2020 – Chinese authorities confirm that a second person has died in China because of the coronavirus.
- January 21, 2020 – The coronavirus has spread through Beijing and Shanghai. Officials in Washington, USA have also confirmed the first case of the virus.
- January 23, 2020 – In an effort to contain the spread of the coronavirus, Chinese officials canceled major Lunar New Year events and enforces a partial transportation lockdown in Wuhan.
- January 28, 2020 – Chinese President Xi Jinping meets with WHO general director Tedros Adhanom to discuss the novel coronavirus. They agreed to send a team of international experts to investigate the said virus.
- January 30, 2020 – WHO declared the novel coronavirus as a Public Health Emergency of International Concern (PHEIC).
- January 31, 2020 – United States President Donald Trump denies entry of foreign nationals who have traveled to China in the past 14 days.
- February 2, 2020 – A man in the Philippines dies from the novel coronavirus. It is the first death confirmed outside mainland China.
- February 5, 2020 – 3,700 individuals aboard the Diamond Princess cruise ship begin a two-week quarantine after 10 people tested positive for the virus.
- February 10, 2020 – The death toll from China because of the COVID-19 surpassed the number of deaths from SARS.
- February 11, 2020 – WHO officially declared the name of the novel coronavirus—COVID-19. The death toll is now at 1,000 with 42,000 infected cases.
- February 14, 2020 – Egyptian officials confirmed the first case of the COVID-19 on African soil.
- February 19, 2020 – The passengers who tested negative for the COVID-19 were allowed to leave the Diamond Princess cruise ship.
- February 27, 2020 – WHO reported that there are more new cases of COVID-19 outside of China than inside.
- February 29, 2020 – A patient in Seattle is the first person to die in the United States because of COVID-19.
The Real Effect of the COVID-19 on Tourism in Asia
Sentiment Survey: An Overview of China’s Tourism Industry
With the COVID-19 infecting more than 80,000 people in China, the market sentiment has been seeing a steep fall. In this sentiment survey conducted by Horwath HTL, the degree and duration of the influence of the coronavirus outbreak were measured from hoteliers across different regions in China.
How Long Would the COVID-19 Outbreak Last
Market performance scores during the first half of 2020 have encountered a major drop due to the COVID-19. When asked about the impact of the virus, most respondents believe that it would have major effects over a period of 6 months.
- 50% believed that the coronavirus outbreak’s impact would last for 3 months.
- 33% responded that its effect would probably be felt up between 4 and 6 months.
- 8% suggested that it would take at least 2 months.
- 7% of the total respondents said that its influence would last up to 6-12 months.
- 1% stated that the impacts would be solved in 1 month’s time.
- Another 1% believed that it would take more than 12 months until the effects fade away.
Which is Worse: SARS vs COVID-19
Hoteliers were also asked if they believe the impact of the COVID-19 would be more severe than the SARS outbreak (experienced between 2002 to 2004). Most responded that its effects on hotel performances would be much worse.
- 68% said that the COVID-19 would be worse than the SARS outbreak.
- 16% stated that they have never experienced SARS-CoV so there was no point of comparison.
- 14% believed that both viruses have the same influence over the hotel industry.
- 2% responded that COVID-19’s impact is better compared to SARS-CoV.
What is the Predicted Overall Market Performance
COVID-19 has resulted in the overall market sentiment score of -116, reaching a historically low point. Considering that the minimum score is at -150, the coronavirus’ influence over the market is hard to deny.
- 71% believed that occupancy rates during the first half of 2020 would be much worse compared to 2019’s.
- Only 1% stated that occupancy rates would stay the same as the first half of 2019.
Average Daily Rate
- 42% of the total respondents stated that the average daily rate in 2020 would be lower compared to 2019.
- 39% suggested that the average daily rate would be much worse than in 2019.
- 19% responded that the ADR performance would stay the same or increase.
- 67% of hoteliers surveyed stated that the COVID-19 would majorly impact the revenue for the first half of 2020.
- 31% believe that revenue could get worse but not to the point in which hotels can’t recover.
- The remaining 1% suggested that the total revenue of the business would remain stable or increase.
Would Hotel Performances Increase or Decrease?
When asked specifically about individual hotel performances, the majority of the hoteliers hold a pessimistic outlook towards all indicators in operations.
97% of hoteliers stated that they would experience a drop in occupancy rates due to COVID-19.
- Out of this large percentage, 78% believed that the decline in occupancy would exceed 15%.
- 19% stated that occupancy rates would decrease by 0-15%.
- Only 3% suggested that occupancy rates would remain the same or increase.
Average Daily Rate
- 87% predicted that the average daily rate would decrease.
- 7% of respondents commented that the ADR would stay the same as last year.
- 6% believed that ADR would increase at least 0-5%.
97% of hotel owners responded that total hotel revenue would decline.
- 78% of this large percentage believed that the decrease would be more than 15%.
- 18% said that hotel revenue would decline by 0-15%.
- Only 1% of respondents stated that total revenue would remain stable.
- 3% expected that there would be a 0-15% increase in hotel revenue.
What is the Level of Recovery Expected
With WHO’s announcement that the COVID-19 outbreak is a “public health emergency of international concern,” the demand from the international industry is predicted to experience a longer recovery period than the domestic market. Here’s what hoteliers in China, based on different market segments, think of.
- 70% of the respondents stated that the international market would undergo weak or very weak recovery.
- 40% believed that the demand from the domestic corporate market would experience good or excellent recovery.
- 32% of the MICE and domestic leisure group predicted that the recovery level would be prominent.
Tourism-Dependent Asian Countries Affected by the COVID-19
As personal indispensable income increases every year, more Chinese nowadays are more likely to spend on traveling. In fact, it is expected that atleast 178.4 million outbound trips and expenditure of about CNY 1.2727 trillion (US$180 million) would happen by 2022.
However, with the growing threat of COVID-19, the same negative sentiments about tourism in China are felt across other Asian countries. From empty hotels to deserted tourist spots, here’s how they are being affected.
One of Hong Kong’s four pillar industries includes tourism, contributing to 4.5 percent of the city’s GDP in 2019. With recent events, the country’s economy is in a critical position.
- Hong Kong has been experiencing drops in occupancy levels ever since the raging political crisis.
- Occupancy rates are no longer measured by percentage but through room numbers.
- The daily average of tourist arrival figures is now at a dismal 3,000 compared to 200,000 in February last year.
- In February, only 20% of tourist beds are occupied.
- 25% of flights going in and out of mainland China have been cut.
- 38% of the total cruise tours in the city have been canceled.
The Director of Macau Government Tourism Office, Maria Helena de Senna Fernandes, stated that the impact of COVID-19 in the tourism industry is much worse compared to the SARS-CoV outbreak.
- Casinos were forced to shut down for a period of 15 days after the WHO’s declaration of a global health emergency.
- The number of visitors in Macau is down by 90%.
- Occupancy rates at local hotels are at a low 11.8%.
- Ferry services between Macau and Hongkong are suspended.
Taiwanese President Tsai Ing-wen has signed a bill to mitigate any impact from the COVID-19 outbreak.
- A budget of US$1.99 billion is being reviewed by the Legislature to help with the containment of the virus.
- The total flight passenger volume between mainland China and Taiwan decreased by 92%.
- The total number of flights going into and out of Taiwan was reduced by 88%.
- A percentage of tourists are willing to reschedule their trip to Taiwan, with about 60% reported in Indonesia.
Despite being a popular tourist destination for most Chinese travelers, Singapore’s tourism economy still suffered from the COVID-19 outbreak.
- Singapore has imposed a travel ban to and from mainland China.
- The Ministry of Health in Singapore advised people to stay away from large-scale events of more than 1,000 people.
- The Singapore Tourism Board (STB) predicted that there would be at least 25 to 30 percent drop in visitors.
- Hotel occupancy rates have been affected—from 83.2% of last year to 82.3% for this year—but not much compared to Hong Kong and Macau.
Chinese visitors account for at least 30% of Thailand’s total tourist foot traffic, with an estimated 12% contribution to the country’s GDP.
- Unlike neighboring Asian countries, Thailand has yet to close off its borders to mainland Chinese tourists.
- According to the Tourism Authority of Thailand, the drop in Chinese tourists is expected to cost the country’s economy at least US$3.05 billion.
- Arrivals from China were reduced at a staggering 99% for the first week of February compared to last year, based on bookings from the Association of Thai Travel Agents.
With Vietnam out of the global list of potential countries that can spread COVID-19, domestic tourism is expected to grow. Still, the virus outbreak has a major impact on the country’s economy.
- According to the Vietnam National Administration of Tourism, the number of international visitors was down by 28% compared to last year.
- The occupancy rates of hotels across the country decreased by at least 20-30% percent.
- To boost tourism, Vietnam Airlines has reduced its ticket prices to local destinations from 70% to 90%.
Next to China, South Korea has the second-largest number of COVID-19 victims with more than 7,000 infected cases.
- Chinese tourists contribute at least US$11.5 billion to the South Korean economy.
- It is expected that the country would lose US$2.4 billion in total tourism revenue if the virus outbreak continues.
- The number of foreign tourists visiting South Korea decreased by 2 million.
Compared to its neighboring countries, Indonesia hasn’t been hit hard by the COVID-19—with only a total of 6 cases confirmed. Having said that, the country’s tourism industry has been suffering heavy blows.
- The Indonesian government reported that US$500 million is lost per month in the tourism sector due to the COVID-19 outbreak.
- A budget of US$6.8 billion for airlines and travel agencies is being reviewed to boost tourism in the country.
- USS7.1 million is set aside for tourism promotion and US$1.7 million for tourism events.
- The occupancy rates of 5-star hotels in Indonesia decreased from 51.47% to 49.17%.
The Philippines is the first country outside of China to have a patient die from COVID-19. It is also the home to hundreds of workers from China, increasing the risk of the infection being spread.
- The Economic Development Cluster (EDC) proposed an additional US$570 million in funding for COVID-19 response.
- The Philippines’ major airline players, Philippine Airlines and Cebu Pacific Air, are expected to suffer a loss of around US$60 million to US$80 million.
- According to the Department of Tourism, the arrivals of foreign tourists in the country have decreased by 41% in February.
- Hotel and resort occupancy rates are down by 40% in Boracay, 40% in Bohol, and 27% in Cebu.
- According to the Asian Development Bank (ADB), the Philippines’ tourism sector can experience atleast 0.68% decrease in GDP due to the virus outbreak.
- Tourism Secretary Bernadette Fatima T. Romulo-Puyat stated that the industry could lose up to US$850 million from February to April.
COVID-19 Prevention: What Hotels Should Do
As the potential spread of COVID-19 continues to pose as a threat, there are some disease prevention practices hotel managers and staff can take to improve overall health and safety.
Take Safety Precautions
If you have employees who recently visited COVID-19 infected countries, you may send them home or straight to the doctor to be tested. Require clearance from exposed employees before allowing them to resume work.
As COVID-19 continues to spread worldwide, you should have emergency preparedness, business continuity, and pandemic reaction plans.
This would help you effectively address business interruption issues on a moment’s notice.
Stress Regular Hygiene
Display signages and train staff to remind hotel guests and fellow workers to practice regular hygiene. Public spaces, such as the front desk, should also be cleaned frequently.
In the case that there are any infected individuals who have been into your establishment, it’s best to maintain records of guest and staff movement.
This includes guest registration records, electronic lock records, security camera tapes, and employee work assignments.
Consult with the Local Health Department
Establish direct contact with the local health department so you’re properly informed of the actions you can take if a guest or worker shows symptoms of the COVID-19.
The impact of COVID-19 in various economies in Asia is potentially huge, with the tourism sector expected to take a massive plummet. However, it’s too early to tell for sure how far the virus outbreak and losses would go. With that note in mind, it’s important to assess the facts and numbers outlined in this infographic to fully understand the grave situation in which the tourism industry is currently experiencing. It would help you in planning for business continuity accordingly.
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