As China began to discover the world and vice versa, Hong Kong and Mainland China were discovering each other. By 2016, a majority of the tourists coming into China were from Hong Kong, Macau and Taiwan. For Hong Kong, the numbers are even more dramatic. Of the 60 million visitors to Hong Kong in 2014, 47 million were from the Mainland. In 2019, 28 per cent of tourists into Thailand were from China. With China under lockdown, Vietnam, South Korea, Taiwan and Japan are also likely to see a significant drop in tourist inflows.
But analysts say that the impact of the outbreak may be felt further away as well. Even if flight disruptions and losses due to diminished traffic are not significant, both aircraft manufacturers – Airbus and Boeing - are likely to take a hit as the airlines of the region stop or delay new plane deliveries.
It is, therefore, safe to say that the coronavirus
outbreak will have a severe impact on the tourism and aviation industry of both China and that of the wider region.
International Air Transport Association (IATA) data shows a fall in global traffic numbers in January 2020. According to its estimates, global revenue losses for the passenger business in 2020 will be between $63 billion and $113 billion. The first estimate refers to a scenario where Covid-19 is contained in current markets and the higher figure refers to a scenario where the virus has spread widely.
Chinese air traffic has already taken a huge knock. The number of weekly international seats between China and the rest of the world fell by 80 per cent during January and March 2020, according to CAPA data. Flights between Shanghai and Beijing – a bit like India’s Delhi and Mumbai – have sharply declined since the outbreak. Outbound, inbound and domestic travel have virtually come to a standstill.
This will impact all hub carriers in the region, several of whom rely substantially on Chinese traffic. Perhaps the only silver lining is the fact that the disruption will be more thinly spread across airlines since there are so many more carriers in the fray since the SARS outbreak nearly two decades ago. A CAPA report argues that recovery post the outbreak may be slower than it was at the time of SARS as the global economic situation is very different now. In 2004, the Chinese economy bounced back quickly as its growth rate was in double digits.