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How tour operators estimate losses from coronavirus outbreak?

Author : 112.ua News Agency

Source : 112 Ukraine

In February, the coronavirus from Wuhan managed not only to spread to Europe and cause serious quarantine measures in a number of European countries but also materially hit one of the sectors of the domestic economy, which, according to some of its representatives, lost up to 30% of orders
09:33, 28 February 2020

 

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Vulnerable tourism

As the epidemiological situation in Wuhan worsened and the coronavirus grew, not only in China and neighboring countries but also on its appearance on other continents, more and more people started talking about the losses that threatened the global economy. The new strain of the disease was even called a kind of "black swan" that could cause another global economic crisis, and with reference to China, this forecast came true.

However, the economies of other European countries, before the epidemiological situation in Italy worsened towards the end of February, reacted quite calmly to the situation; only experts spoke about the losses incurred by the tourism industry. In January, the tourist destination in China was banned.

Related: Coronavirus epidemic begins in Germany, - Health Minister

The prevailing effect of coronavirus on tourism and the “certain costs” that carriers and tour operators operating in foreign markets, in particular with China, will incur as a result, said Timofiy Milovanov, Minister of Economic Development, Economy and Agriculture, at the end of January. On the whole, the head of the department assessed the impact of the epidemic on the national economy as "minimal."

Everything changed with the outbreak of coronavirus in Northern Italy, which led to the announcement by the authorities of quarantine measures. Ukraine did not stand aside either – the head of the State Border Service, Serhiy Deineko, announced the introduction of temperature screening for Ukrainians, returning from Italy at border crossing points. Needless to say, the statement of the head of the State Border Service did not appeal to tour operators more than the statement about quarantine in Northern Italy, because right now the Italian season is in travel agencies.

Carnivals, shopping, and romance: Ukrainians no longer go to Italy

As market participants explained to 112.ua, just now the Italian destination for Ukrainian tourists is in high demand.

"The Venice Carnival, shopping tours and romantic trips on March 8 to Milan, trips to ski resorts in French Courchevel and Chamonix, often carried out in transit through Northern Italy - all this has now turned out to be closed for our tourists," says director of a small travel agency Olena Karasaeva.

In connection with the quarantine and the cancellation of festive events in Northern Italy, according to the interlocutor, market participants have problems; there are scandals with customers panicking because of news when returning money last. For example, the cost of a Ukrainian International Airlines (UIA) airline ticket to Italy ranges from 250 to 500 USD, and hotel accommodation will cost from 150 to 400 EUR per day, in ski resorts - from 500 EUR per day.

Related: No Ukrainians among 2,000 coronavirus-infected in Japan

“Those who simply flew through Italy to the ski resorts are in the hardest position – they have to buy new tickets to Geneva or Lyon, for direct or transit flights, bypassing Milan,” Olena Karasaeva says.

With the spread of news about the detection of coronavirus in Sicily, people tended to refuse to travel to Rome, Bologna, and Florence.

At the same time, travel agent Svetlana Bardash told 112.ua that she had returned from a trip with a group of tourists to Nice on February 23, in neighboring France there were no signs of quarantine measures or panic at the time of her stay there.

"The carnival in Nice attracts a lot of tourists from different countries, including obviously from Southeast Asia, no masks and quarantines are visible anywhere, everyone is having fun," she described the atmosphere surrounding tourists in neighboring France.

Tourist flow decreased by 30%?

Market participants find it difficult to say how much the coronavirus cost them, which is largely due to fears of causing a panic among tourists, agreeing that they really felt this from the beginning of February.

Related: No cases of coronavirus reported in Ukraine, - PM Honcharuk

“Tourism, like no other industry, is subject to external changes - war, epidemic, revolution, people react sharply to all this and decide to postpone the trip, and, in my subjective assessment, the market has decreased by about 30% since the beginning of February,” Maksym Dereza, the director of Deluxe Voyage travel agency, estimates the consequences coronavirus for the industry.

The Ukrainian Association of Travel Agencies (UATA) estimates losses more modestly.

 “Since January, charter flights with tourists to Hainan Island to the PRC stopped, there are a few cases of refusal to travel to Asian countries and now to Italy. In such cases, cancellation occurs under standard conditions of cancellation of the tour,” UAT Executive Director Pavlo Hryhorash noted.

As Marнna Polyakova, the director of the travel agency Bureau of International Travel, admitted, the losses of the tourism industry are quite tolerable, but they have significantly affected those companies that are engaged in VIP tourism, in particular Italy.

"With the growth of news about the spread of coronavirus, clients with small children began to refuse from trips to Italy and Spain because of concerns about their health. We understand the anxiety of parents and try to meet them, but here there are problems with the return of funds or at least “freezing” deposits in the hotels. We are currently negotiating with the director of one of the Italian hotels who refuses to return money or freeze the deposit on the grounds that the Italian Foreign Ministry did not include their city in the list of those on quarantine,” our interlocutor admits.

According to CNBC, in 2019, France has become the leader of the tourism industry in the world, the decrease in tourist flow was from 30 to 40%. However, as market participants admit, while industry losses are tangible, they can grow significantly if the situation worsens and the most popular tourist destinations among Ukrainians fall under the “blow” of the coronavirus.

Related: 89 Ukrainians, evacuated from Wuhan, test negatively for coronavirus infection, - official

Turkey, Egypt: how will the season turn out?

As our interlocutors admit, the period in the industry is unstable, but Egypt and Turkey are the most popular destinations among the Ukrainians.

Maksym Dereza also states about the start of the booking season in Egypt and Turkey, speaking about the danger that all tour operators are now afraid of.

 “The industry has decreased significantly and has been operating on the verge of profitability since the beginning of February. But if coronavirus is found in the countries, which are most popular with Ukrainians, tour operators would suffer significant losses,” Maksym Dereza admitted in the main fear of market participants.

According to Maryna Polyakova, if coronavirus is detected in the most common resorts of Turkey and Egypt, the tourist season in 2020 might be failed, and some tour operators might simply run the risk of going broke.

The scale of a possible blow to the industry is indicated by the data of the UATA Executive Director Pavlo Hryhorash. If several charter flights with tourists on board were carried out to China weekly, then up to 150 of them are carried out to Egypt (a week).

Related: Healthcare Ministry not yet confirms information on Ukrainian’s coronavirus diagnosis in Italy

“The situation strongly depends on two factors – the rates of virus distribution and its media coverage, but so far, based on the actual situation, serious problems are still not expected,” Hryhorash assures.

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