China virus sends shockwaves through Asia tourist industry

Tokyo: A deadly virus that has prompted travel restrictions in China is sending shockwaves through Asia's tourism industry, which has become increasingly reliant on growing numbers 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 an 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 foreign travel, with the number of tourists from the country increasing nearly tenfold since 2003, according to a report by research firm Capital Economics.

But businesses in destinations that rely on the huge numbers of Chinese tourists are already feeling the heat, with complaints of "deserted" beaches and shops, and concerns about the

future.

The outbreak carries echoes of the SARS crisis, which paralysed regional travel and battered local economies from late 2002. Chinese tourist numbers then fell by around a

third.

"If they fell by a similar amount again, it would knock around 1.5-2.0 percentage points from (gross domestic product) in the most vulnerable countries," Capital Economics said.

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

"We've definitely been seeing less people this year," said Yoshie Yoneyama, 31, manager of a shop selling traditional Japanese sweets and a rice-based drink called

amazake.

"I think there are less than half the numbers of last year or the year before," she told the reporter.

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

sector.

But it will now be "very difficult" for Japan to achieve its target of 40 million tourists in 2020, Yuki Takashima, an economist at Nomura Securities, told the

reporter.

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

shop.

Electronic appliances and beauty products usually top of their lists, Takashima said, so retail outlets will see their bottom lines

affected.

The crisis has already sent Japan's key Nikkei index plunging, with stock in Shiseido -- a cosmetics brand popular with Chinese tourists -- plunging more than five percent on Monday. "We can expect those stocks to continue to fall like dominoes," said Stephen Innes, chief market strategist at 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 nation's GDP, with Chinese holidaymakers making up more than a quarter of total

arrivals.

The country's tourism minister has already warned a crisis on the scale of SARS could cost an estimated USD 1.6 billion, and the effects are already clear in Phuket. "For two days, the streets, the shops and the beaches have been deserted," said Claude de Crissey, who owns a 40-room hotel and a restaurant on the

island.

"Phuket has focused almost exclusively on Chinese tourism... if the situation continues, we will all be impacted," he said. Australia too, already reeling from the effects of the bushfire crisis, is likely to feel the impact.