The spread of coronavirus is at the forefront of many people's minds, with health experts saying that every infected person spreads the infection to two to three people on average. While the lasting or critical damage to China and the global economy is still unknown, the short term damage this virus is having on the travel and tourism industry is becoming more and more apparent. The Global Wellness Industry dove deeper into this topic to lay out the facts and the predictions for the future.
Pulling in the Facts
The SARS pandemic that hit the world in 2003 did a lot of damage to the global tourism industry, but it only inflicted minimal damage on the global economy. However, China has grown since 2003 with its share of GDP having quadrupled from 4% to 16%. On top of that, China's growth accounts for roughly 30% of the total global economic growth. Thus, the economic impact of the coronavirus is at risk of being greater than previous pandemics we have experienced.
This also could directly impact the tourism market because China is the largest tourism source market in the world. Roughly 159 million outbound tourists spent $275 billion in 2019.
The Global Wellness Institute stated that "It is first and foremost the travel and tourism industry that will take the greatest hit," when discussing implications from the coronavirus. There has been a lot of data released showing how this virus is hurting tourism. For example, the International Air Transport Association estimated it would cost the airlines industry $29.3 billion in lost revenue this year.
This outbreak could result in a drop as high as 28% in Chinese visits to the US in 2020, which would translate to roughly $5.8 billion lost in airfare and domestic spending. Other placed around the world like Italy and France are already reporting their experience with their drop in tourism. France's Finance Minister reported that the country had seen a 30-40% drop in tourists since the outbreak.