Asian tourism hit hard by Covid-19

The Pattaya floating market (Thailand), usually crowded with Chinese tourists, is quiet now

The impact of COVID-19 has been felt all over Asia, where the entertainment industry and business activities contributed US$884 billion to the region’s gross domestic product (GDP) in 2017 and an estimated US$1 trillion in 2018.

For China alone, inbound tourism brought in US$127.3 billion in 2019. Travel agents, travel operators and hotel owners are now preparing for economic disruption that could last for months, even a year, with long-term effects that could cross over into 2021.

Currently, the number of canceled trips, not only to China but also to the entire Asian continent and particularly to Southeast Asia where many countries border China is increasing daily. For example, the New York-based travel agency Embark Beyond has reported that 75 percent of tourists have canceled trips departing in February and March to countries in this region, although the US Centers for Disease Control and Prevention said the risk of Covid-19 infection there is low. All honeymoon tours have been canceled and re-booked for alternative destinations, including the Maldives, southern Africa and Australia.

The Hilton hotel chain predicts that the impact of the virus spread will last from six to 12 months with losses estimated at US$25-50 million. Many hotels on the continent are allowing travelers to change their plans as long as they rebook rooms for later this year.

The Covid-19 outbreak has affected tourism seriously in Malaysia, Singapore and Thailand, where authorities have restricted visitor entries to control the spread of the disease. Thailand has been particularly hard hit since Chinese tourists are playing an increasingly important role in strengthening its tourism economy, accounting for 30 percent of total tourist arrivals. Direct tourism spending totaled US$18 billion in 2019, accounting for about 12 percent of Thailand’s GDP.

Data from the Tourism Authority of Thailand indicate that the drop in the number of Chinese tourists from January to April this year could cost the economy US$3.05 billion. Arrivals booked by the Association of Thai Travel Agents dropped 99 percent from China and 71 percent overall for the first ten days of February compared with the same period last year.

Many other countries and territories, such as Hong Kong, the Republic of Korea, and Japan are also facing the same cruel reality.

The damage to Vietnam’s tourism industry caused by the Covid-19 is estimated from US$5.9-7.7 billion. Indonesia’s tourist island of Bali has seen 20,000 hotel bookings canceled, although Indonesia has not confirmed any cases of the Covid- 19 infection so far.

Rajiv Biswas, Asia-Pacific chief economist at the market research firm IHS Markit, said that the epidemic’s effect on tourism has already been acutely felt in the first two months of the year and is likely to worsen in the coming months. In 2003, when the previous major coronavirus outbreak known as the SARS (Severe Acute Respiratory Syndrome) epidemic occurred, it took about four months until the World Health Organization declared the epidemic was under control and five additional months to be officially declared over, with no new cases of infection.

According to aviation industry analysts at AirInsight, the SARS epidemic cost global airlines US$10 billion in revenue and that was when the global aviation business was less developed in terms of passenger volume and extent of flight cancellations. So far, 25,000 flights have been canceled worldwide due to Covid-19.

Viet Dung