Travel and tourism operators around the world are bracing for more difficult times ahead as the coronavirus outbreak chokes off demand from China and leads to cancellations from other international travellers.
“We don’t have any tours coming because of this virus,” said Alex Xu, managing director of U.K.-based Kaleidoscope Travel, which arranges European group tours for travellers from Asia. “Mainland [China] cancelled all the tours.”
The Chinese government ordered domestic travel agencies and tour operators to temporarily suspend sales in late January in an effort to slow the global spread of the coronavirus, which can lead to the disease known as COVID-19.
This caused a sharp drop in business for many European operators that have come to rely on the fast-growing Chinese market.
Xu’s Kaleidoscope Travel makes about three-quarters of its revenue from Chinese tourists, so it immediately felt the impact. Xu said he hopes tours will start operating again soon as he has to support a staff of 20 in the U.K. and China.
“We have a family to support, we have kids to raise, we have mouths to feed. I also have staff and I have [tour] vehicles, which are empty … It’s very difficult,” he said as he stood in front of his parked mini-bus outside his office.
WATCH: U.K. tour operator Alex Xu explains the effect of fewer Chinese visitors
Others are hurting as well.
The popular Galeries Lafayette luxury shopping mall in Paris is also feeling the impact, said Xu, who visited last week.
“Lafayette shopping centre is a favourite place for Chinese people. But this time, just last week, the Lafayette shopping centre was empty. No people inside at all,” he said.
The parent company of Galeries Lafayette declined to comment for this story. Other popular tourist hotspots and retailers, including the London Eye attraction and Madame Tussauds, were similarly unavailable for comment.
European tourism businesses are uniquely vulnerable, since the continent is a popular destination for Chinese travellers, who are known for splashing out on luxury goods on their trips. In the U.K., Chinese tourists on average spend nearly three times more than other visitors, according to the government-backed agency VisitBritain.
China ‘in severe difficulty’
In March and April last year, nearly one-quarter of Chinese air travellers headed to Europe, making it the most popular destination outside Asia-Pacific, according to data from the international flight-tracking firm ForwardKeys, which is based in Spain.
But the latest airline data shows bookings to Europe are down by 37 per cent in March and April this year.
“The world’s largest and highest-spending outbound travel market, China, is in severe difficulty,” said Olivier Ponti, a vice-president at ForwardKeys, in a new research report. “Cancellations are growing by the day and the trend is now spreading to surrounding countries.”
Mainland China is the single most important source of international travellers in the world, based on traveller numbers and revenue. People from mainland China spent more than $277 billion US ($366 billion Cdn) on international travel in 2018 alone, according to the UN’s World Travel Organization. That’s nearly double the amount spent by American travellers in the same year.
In the U.K., many businesses are suffering.
“Even though it is currently low season for Chinese visitors to the U.K. … some of our tour operator members that depend wholly on the market, and some of our accommodation members, are experiencing substantive cancellation levels,” said Joss Croft, head of the British tourism association UKinbound.
The U.K.-based Centre for Retail Research predicts any future bounce-back in business won’t compensate for short-term losses.
“For U.K. retailers, caterers and hoteliers, as well as those in Western Europe, the absence of most Chinese tourists this spring, summer and autumn will prove to be a great financial loss with hoped-for room bookings, meals, admission fees and purchases of branded items and luxury goods gone forever,” said the Centre for Retail Research in a new report.
Hoping for a bounce-back
VisitBritain, which posts daily coronavirus updates on its website, said early this month that it was encouraging U.K. tourism companies to be accommodating to Chinese tourists who were forced to cancel their trips.
In a letter addressed to Chinese travel operators in early February, VisitBritain said it had seen examples of “accommodation providers and train operators … offering free cancellations to Chinese guests whose plans have been impacted, easing some of their worry and helping to support their future plans to visit Britain.”
In Italy, the loss of Chinese tourism is considered an emergency situation.
“It’s seen as on par with an earthquake, a situation of emergency,” said Mattia Morandi, a spokesperson for Italy’s ministry of culture and tourism, in an interview with the New York Times.
The spreading virus is now convincing would-be travellers from outside China to reconsider their international vacation plans.
International flight bookings for March and April from other parts of the Asia-Pacific region are down nearly 11 per cent compared to last year, according to ForwardKeys.
Others who still want to travel have found their plans changed. For example, the tech industry group GSMA decided to cancel its high-profile trade show, the Mobile World Congress in Barcelona, which was scheduled for the end of February.
The business show typically brings in more than 100,000 attendees from around the world. The organizers said they made the decision due to “global concern regarding the coronavirus outbreak.”
Back in London, Alex Xu said he himself decided to scrap plans for a family holiday to Sweden this week, in part because of concerns about contracting the coronavirus while travelling abroad. Instead, he said he’s staying in the U.K.
He’s using this slow time as an opportunity to renovate his offices. He hopes tours will start operating again soon.
“We don’t have any hope if this virus is not sorted out,” he said.