Tourism sector on alert
The coronavirus is causing some tourists to stay at home, and in the tourism sector we’re starting to consider the potential impact of the COVID-19 outbreak on our business
By now, anyone who says the coronavirus isn’t going to affect 2020 is lying. Many people are panicking, and sooner or later it’s going to hit us. The economic impact of this new health crisis caused by the Coronavirus (COVID-19) is already being felt by two of the principal actors in the sector: airlines and cruise companies. The pandemic that emerged in China has finally become a tsunami for world tourism. In my view, I believe that the current scenario will inevitably become more complicated, and the demand for travel will slow down.
Tourism is one of the sectors that has been most affected by this health crisis. As countries increase travel restrictions, hotels and airlines are affected more, and the possible economic losses could be without precedent.
On the one hand, the Chinese government’s drastic measures to try and stem the coronavirus have already had a first impact on the tourism sector with the number of Asian travellers decreasing. But the virus spreading to Europe has put Spanish tourism companies on alert, and they’re now beginning to notice an increase in cancellations and a decrease in bookings.
It’s still too early to assess the effects of this health crisis in a key sector for the Spanish economy like tourism. Uncertainty is at a peak, and the impact will depend on the evolution of the epidemic and how hoteliers, travel agents, airlines and other sectors act.
The usual thing is to look back and see how a similar situation evolved in the past. SARS is the most frequently cited example. This respiratory disease caused by another coronavirus that especially affected China resulted in the death of close to 800 people in the early months of 2003. The consequences in the world of tourism and the stock market on this occasion were short-lived, and air traffic returned to normal in the second half of the year.
However, it’s important to note that in 2003 China represented 4% of the world’s GDP, whereas currently, it stands at 18%. Since then, China’s international air traffic has more than doubled, and domestic air traffic has increased fivefold. In the last three years, China has climbed to the top as the leading issuing country in the world with the highest spending. For this reason, I’d venture to say that the comparisons are not odious, but very different.
The tourism sector has already started to shake, and we are particularly concerned about the stop in sales for the coming months. In Spain, our industry represents about 12% of the national GDP, and we’re fearful of the slump in business tourism and the stoppage of the Holy Week campaign that extends into early summer.
City hotels and business and events tourism are most affected at the moment. However, we still have room to save the season in the holiday sector if contagion slows down quickly and we employ the correct strategies. Therefore, it’s our duty as hoteliers to work on campaigns to promote and attract tourists.
It all depends on how long the crisis lasts. In any case, outside of the panic and current reaction, we should all be very clear about one thing: after the storm comes the calm. As with any situation of restricted travel (as was the case with the 2003 SARS epidemic and the 2010 volcanic eruptions in Iceland, for example), there is likely to be an impact on the number of visitors, but a strong return or recovery usually accompanies this.