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Friday, Apr 10, 2020

Coronavirus: Hong Kong taking ‘bigger hit’ than during Sars as tourism sector suffers from ‘unprecedented downturn’

Deadly outbreak has devastated city’s tourism industry, reducing number of daily arrivals to an average of 3,000. Tourism board plans to begin rebuilding confidence in Hong Kong from May with a big push for the fourth quarter of 2020

The unfolding and deadly coronavirus outbreak is going to cause a bigger hit on Hong Kong’s tourism sector than the Sars epidemic in 2003 and will extract a heavy toll on the year’s overall visitor numbers, the industry’s promotion body has said.

Dane Cheng Ting-yat, executive director of the government-backed Hong Kong Tourism Board, on Tuesday said it would further downgrade its January estimate of 50 million tourist arrivals to the city in 2020 – itself a 10 per cent decline year on year.

The worsening outbreak of the coronavirus, which causes the disease known as Covid-19, has devastated Hong Kong’s tourism industry, reducing its daily average of arrivals to 3,000 in the middle of February. It was 100,000 in January and 200,000 this time last year, Cheng said.

The daily average was only a third of the same figure during the lowest point of the severe acute respiratory syndrome, when an average of 10,000 people came to the city in May 2003.

“It will be a bigger hit than Sars,” Cheng said. “The existing decline is unimaginable.”

In the middle of February, only 20 per cent of tourist beds were taken up, with a 25 per cent cut in flights and a cancellation of 38 cruise tours in the city, Cheng said.

A total of 47 jurisdictions issued travel warnings to those heading to China, of which 28 mentioned Hong Kong as well, he added.

As the outbreak spread rapidly, many airlines suspended or reduced flights to Hong Kong and the government eventually shut down all but three of its border checkpoints, with only the airport, Shenzhen Bay Port and the Hong Kong-Zhuhai-Macau Bridge still operating.

Since February 8, the Hong Kong government has enforced a compulsory 14-day quarantine for anyone, regardless of nationality, arriving in the city who had visited mainland China in the preceding two weeks.

A total of 61 people were infected in Hong Kong by noon on Tuesday, while in mainland China the number of cases leapt to more than 72,000 and the death toll was at least 1,860.

Cheng said the tourism sector was already reeling from the damaging legacy of the anti-government protests that began in June last year and that the second half of this year would fare even worse.

“Competition for tourists from regional markets such as Singapore, South Korea and Taiwan will heat up in the latter half of this year,” he said.

“And there will be a stay-at-home effect caused by the Tokyo Olympics.”

The board would seek HK$330 million in fresh funding from the government for 2020/21, Cheng said, while seeking to retain last year’s balance of about HK$200 million as capital.

“We hope the financial secretary will earmark extra funding in next week’s budget to step up our promotion,” he said.

With uncertainty surrounding the outbreak, the tourism board planned to rebuild domestic spending confidence from May until the third quarter of 2020, before rolling out a large-scale programme to relaunch Hong Kong in the fourth quarter, Cheng revealed.

He said the city would also seek to diversify its sources of tourists from mainland Chinese, who accounted for 78 per cent of last year’s total arrivals.

“It is not healthy to rely on a single market, we are thinking of rebalancing it by targeting countries with higher spending power,” he said.

Tourism lawmaker Yiu Si-wing said the outlook for the first half of 2020 remained bad, with the first quarter visitor arrivals estimated to be down as much as 80 per cent and second quarter 60 to 70 per cent lower year on year.

“The downturn is unprecedented,’ Yiu said.

“Assume there are no new cases of infection in March, it will take at least two or three months to rebuild tourists’ confidence to return.”

He added that how Hong Kong rebounded from this trough would depend on when the outbreak across the border came under control. The outbreak originated from the Chinese city of Wuhan.

Yiu said it would be difficult to forecast a full-year arrival figure due to the ongoing uncertainty surrounding the outbreak.
The board’s funding plan is due for discussion at the economic development panel at Legislative Council next Monday.


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