NEW DELHI: The novel coronavirus, which has crossed China’s borders and spread across the world, has brought the travel and tourism industry to a virtual standstill. The global coronavirus scare, industry experts say, is such that both outbound and inbound tourists are cutting back on their travel plans for fear of getting infected by the fast spreading virus.
According to Pranab Sarkar, president of the Indian Association of Tour Operators, “A lot of cancellations are happening these days, which is impacting business in a massive way. On top of that, some hotels are not accepting cancellations and are not refunding the money to the foreign tourists which is giving a very bad impression of our country abroad.”
Sarkar said that around one lakh inbound tourist cancellations were happening per month. “In the case of outbound tourists, the rate of cancellation is double that of the inbound tourist figure. This means agencies that are dealing with inbound or outbound tourists are incurring revenue losses in crores of rupees,” Sarkar added.
“This used to be the best season for places like Kerala. However, due to the coronavirus outbreak, tourism industry in Kerala is witnessing 15% cancellations. Many tourists who were scheduled to visit Kerala this month from North India and abroad cancelled their tours. This is a big loss for the industry which will ultimately affect the economy of our country,” said Manu P.V., secretary of Association of Tourism Trade Organisations.
With a rise in coronavirus cases in India, the Centre has extended universal screening of all international flights along with imposing restrictions on visas for travellers from China, Iran, Republic of Korea, Italy and Japan.
With fresh cases emerging in Europe and the United States, leisure and business travel, both incoming and outgoing, have taken a hit.
“There has been a slowdown in outbound travel bookings since the outbreak of coronavirus. Travellers
are being cautious in making their (outbound) travel plans. At MakeMyTrip, our outbound business stands at 20% of the overall business and within this share are contributions from Southeast Asian countries. This has got impacted. We expect a potential impact on overall business if the outbreak spreads westwards,” said a spokesperson of MakeMyTrip.
The spokesperson also said that their flight bookings for Southeast Asian countries have been significantly impacted and countries in the West, including US and in Europe, were seeing a dip in numbers.
The International Air Transport Association (IATA) estimated losses between $63 billion and $113 billion due to the Covid-19 outbreak. IATA estimated the loss on passenger revenues at $63 billion if there is “limited spread” of Covid-19 and at $113 billion if it spreads extensively.
“IATA’s previous analysis (issued on 20 February 2020) put lost revenues at $29.3 billion based on a scenario that would see the impact of Covid-19 largely confined to markets associated with China. Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China,” the IATA statement said.
The statement further said, “Financial markets have reacted strongly. Airline share prices have fallen nearly 25% since the outbreak began—some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. To a large extent, this fall already prices in a shock to industry revenues much greater than our previous analysis.”
In HVS India Hospitality Industry Overview 2019, consultancy firm HVS stated that the first half of 2020 will be relatively muted for the hospitality sector because of the impact of coronavirus on the global market and economic headwinds.
However, Akash Datta, senior vice president of HVS, told The Sunday Guardian that the impact of coronavirus on the hospitality sector will be for the short term. “In the short term, coronavirus has obviously depressed the markets. With business travel and tourism restricted across many markets, hotels have had to moderate their short-term financial projections. That said, it is not impacting decision-making in terms of future expansion as there is a clear perception that the coronavirus scare is essentially time-bound in nature. In other words, hotel chains will hold their breath for a while, but their long-term plans remain unaffected,” Dutta said.