Tourism industry taking a hit from the coronavirus

20 February, 2020

By ECCT staff writers


The tourism industry is taking a hit from the 2019 novel coronavirus (Covid-19) by the drop in the number of both international and local tourists. Airlines and hotels have been the most affected given their large operating costs.

The cancellation of flights to most cities in China as well as the fear of travelling to the region have forced airlines to cut flights while passenger numbers have fallen dramatically since news of the outbreak became widespread. Taiwan's two top airlines, China Airlines and EVA Air, have cancelled a combined total of 1,000 flights in February while Chinese carriers have suspended all of their flights. In all, more than 2,000 flights a month are being cancelled. As a result, passenger traffic at Taiwan Taoyuan Airport has dropped by more than 40%.


In addition, several airlines have cancelled flights to and from Southeast Asian nations amid the COVID-19 outbreak. This includes Singapore Airlines, which has cancelled a total of 28 flights between Singapore and Taipei, at least until early May. Taiwan's newest airline, Starlux Airlines, which only launched flight services on 23 January this year, has had to cancel some of its flights between Taipei and Vietnam. EVA Airways and China Airlines have also announced that they plan to cancel flights between Taipei and Singapore.

The impact is being keenly felt by the hotel, hospitality and related industries worldwide. According to official figures provided by Chinese authorities, Chinese citizens took 150 million overseas trips in 2019, while, based on figures provided by the China Tourism Academy, Chinese tourists spent US$130 billion overseas in 2018, up 13% from the previous year.


However, things have gone into reverse since the coronavirus outbreak started in Wuhan, both in China and globally. The absence of Chinese tour groups has left hoteliers, restaurateurs, tour operators and retailers reeling as one of their highest-spending customer groups has been forced to stay at home. China's ministry of transport said that 73% fewer trips were taken by Chinese tourists over the lunar New Year holiday in 2020 compared with 2019. In related news, Yum China, which runs several fast food outlets in China, has estimated that the outbreak could wipe out its full year operating profits as 30% of stores had been closed and sales were down 40-50% in stores that remained open.


Other countries are also suffering. Tourism accounts for 20% of Thailand's gross domestic product, with Chinese visitors making up a quarter of trips to the country.


Here in Taiwan, although dependence on visitors from China has fallen in recent years, the tourism industry is suffering from the knock-on effect of cancellations of trips by tourists from other important markets, especially Japan, South Korea and Hong Kong. As a contingency measure, hotels all across the country are slashing rates or offering complimentary upgrades or add-ons to try to attract clientele. 

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