INTERNATIONAL. Hotels, luxury shops and other attractions and destinations that are heavily reliant on Chinese tourists face an even bigger crisis than during the SARS outbreak of 2003, according to a Bloomberg report.
“From Tokyo to London, hotels, casinos, airlines and retailers are already recording a downturn and are bracing for weeks, if not months, of plummeting spending after China curbed outbound travel and governments tightened border controls,” the news agency reported.
“The benchmark everyone is comparing this to is SARS in 2003” –Luya You, Bocom International Analyst
In fact the impact could be much greater. As reported by The Moodie Davitt Senior Retail and Commercial Analyst Min Yong Jung, total air passenger traffic by Chinese has grown exponentially since 2002, the year before the SARS crisis peaked. Since then the Chinese spend has become the engine room of growth for travel retail worldwide, generating over 70% of sales in the world’s biggest duty free market, South Korea, alone.
“It’s a triple whammy – Chinese travel more, they spend more and they spend more on beauty products,” Jefferies LLC consumer analyst Stephanie Wissink told Bloomberg. “Chinese travellers are the most significant and most important customers for growth in the travel retail industry.”
“The benchmark everyone is comparing this to is SARS in 2003,” said Luya You, a Hong Kong-based transportation analyst at Bocom International. “The actual cost and negative impact of this virus could be greater because more Chinese are travelling than before. The cost of preventing travel, grounding flights is magnitudes higher than what it was in 2003.”
