ETOA: Coronavirus fear is powerful deterrent to tourism
Speaking from the ETOA Britain & Ireland Marketplace on 28 January, Tom Jenkins, CEO of ETOA said: “Everyone’s thoughts are with the Chinese people at a time of national crisis. However, fast the Coronavirus is spreading, the impact is spreading faster and wider. Fear, especially combined with government travel bans, is a powerful deterrent to tourism.”
Events have moved rapidly. The Chinese authorities issued a ban on all sales of outbound travel packages on 24 January 2020 and encouraged travel organisers to urge their clients not to travel. A total ban on group travel was instigated as of 27 January 2020.
For Europe, Golden week surrounding the Chinese New Year is an important peak in business during a low-season period.
“We estimate that about 7% of all annual outbound tourism from China takes place during the Chinese New Year was due to leave China before the travel ban took place on the 27th of January; but the evolving situation led to approximately 60% of the groups being cancelled. So, with caution, it is possible that two-thirds of the visitors expected to arrive in Europe over this period have not done so,” said Tom Jenkins.
Using an estimate of the number of Schengen visas issued in 2019 and data from Visit Britain it is possible to make an estimate. In numerical terms, this is about 170,000 cancellations in Europe, of which 20,000 are being lost by the UK. In financial terms this is €340million of lost revenue, of which £35m is being lost in the UK.
“These are last minute cancellations – some within twenty-four hours – releasing space when there is little alternative demand” said Tom Jenkins. “They are concentrated, like much low season business in a few areas. So the commercial pain experienced is considerable. It is probable that these clients are deferring their visit. There is no indication that they are permanently erasing their intentions to come here. We should expect a subsequent surge in bookings when the scare is over. The impact of SARS was substantial in 2002-3, but the recovery was robust within five months.”
“It is at moments like these that origin markets find out who their friends are. We need to look to the future health of the market. It may not be possible to give the right answer, but the question has to be posed: “How can we best support our Chinese clients?” The nature and speed of the recovery will be determined by how we react now.”
“We also need to stress that Europe – and the UK will continue to be viewed as part of Europe by long haul markets – remains virtually free of Coronavirus. It needs to be free of the even more contagious and damaging threat of fear.”