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China virus sends shock waves through the tourism industry in Asia



A deadly virus that has led to travel restrictions in China is sending shock waves through Asia's travel industry, which has become increasingly dependent on an increasing number of Chinese visitors.

At least 81 people have died since the new strain of coronavirus emerged in China's Wuhan, and millions are now under effective quarantine, with all flights in and out of the city grounded and a ban on Chinese tour groups domestically and abroad.

The measures come amid a boom in Chinese overseas travel, with the number of tourists from the country having increased almost tenfold since 2003, according to a report by research firm Capital Economics.

But businesses at destinations that depend on the huge number of Chinese tourists are already feeling the heat, with complaints about "deserted" beaches and shops, and concerns for the future.

The outbreak echoes the SARS crisis, which crippled regional travel and hit local economies from the end of 2,002. Chinese tourist numbers then dropped by about a third.

 Tourism throughout Asia will be affected by restrictions in China to prevent the spread of a mystery virus that has killed dozens of Tourism throughout Asia will be affected by restrictions in China to prevent the spread of a mystery virus that has killed dozens Photo: AFP / CHARLY TRIBALLEAU [19659009] "If they fell by a similar amount again, it would be deducted around 1.5-2.0 percentage points (gross domestic product) in the most vulnerable countries," said Capital Economics.

In Japan, the fall in Chinese visitors was already being felt in Asakusa, a popular tourist destination near the Sensoji Temple.

"We've definitely seen fewer people this year," said Yoshie Yoneyama, 31, head of a store selling traditional Japanese sweets and a rice-based drink called amazake.

 Chinese visitors make up 37 percent of all Japan's incoming tourists and the virus outbreak are likely to affect a number of local businesses Chinese visitors make up 37 percent of all Japan's incoming tourists, and the virus outbreak is likely to affect a number of local businesses Photo: AFP / CHARLY TRIBALLEAU

"I think that's less than half the figure last year or the year before," she told AFP.

The number of Chinese holidays in Japan has exploded from around 450,000 in 2003 to 8.4 million in 2018, accounting for 27 percent of all incoming tourists as Tokyo works to expand the sector.

But it will now be "very difficult" for Japan to reach the target of 40 million tourists by 2020, Yuki Takashima, an economist at Nomura Securities, told AFP.

And the effects will be felt beyond hotels, restaurants and tourist spots, because many Chinese tourists visit Japan specifically to shop.

Electronic appliances and beauty products are usually at the top of their charts, Takashima said, so retailers will see their bottom lines affected. [19659002]   Japan has put forward screening measures at. their airports after four cases of the deadly virus detected Japan has put screening measures in the airports after four cases of the deadly virus discovered Photo: JIJI PRESS / STR [19659002] The crisis has already sent Japan's key Nikkei index plunger, with shares in Shiseido – a cosmetic brand popular with Chinese tourists – plunging more than five percent on Monday.

"We can expect these stocks to continue to fall like dominoes," said Stephen Innes, chief strategist for AxiCorp.

But he said Japan would be better placed to weather the storm than another top destination for Chinese tourists: Thailand.

Tourism accounts for 18 percent of the country's GDP, with Chinese vacationers accounting for more than a quarter of total arrivals.

The country's tourism minister has already warned that a crisis in the scope of SARS could cost an estimated $ 1.6 billion, and the effects are already clear in Phuket.

"For two days, the streets, shops and beaches have been deserted," said Claude de Crissey, who owns a 40-room hotel and restaurant on the island.

"Phuket has focused almost exclusively on Chinese tourism … if the situation continues, we will all be affected," he told AFP.

Also in Australia, which has already threatened the effects of the bushfire crisis, is likely to feel the impact.

Chinese visitor numbers doubled over the six years to June 2019, with the mainland now accounting for 15 percent of Australia's incoming tourists.

Mario Hardy, CEO of the Pacific Asia Travel Association, said it was difficult to gauge how long the crisis would last.

"I would suspect the impact would be between three to six months, but it will really depend on how the situation develops over the next few weeks," he told AFP.

In Japan, leather goods owner Hayato Chiba said local businesses in Ameyoko's shopping district in Tokyo's Ueno were hoping for a quick resolution.

"An increasing number of stores in Ameyoko rely on overseas customers, so it will be a little tough," said Chiba, 65, who represents about 400 local businesses.

"Something really serious is happening. We are worried about how long it will last."


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