Hospitality in the News - 6 February 2020

Your latest instalment of articles and opinions from across the Hospitality sector.

TW: thinkingdifferently

Should we be concerned about the impact of the coronavirus on the Global Hospitality & Travel Industry? Definitely, based on what happened with SARS 17 years ago. Then, China was just 4.5% of global GDP. Today it is 17% of the world economy.

Just a few weeks ago no-one apart from a few members of the medical community had ever heard of a coronavirus. Whilst we watch the rapid spread of this virus despite the Herculean efforts of the Chinese Government to contain it, we thought we should look at the impact SARS had on the hospitality industry when it arrived 17 years ago for comparison.

When SARS arrived, global air traffic saw an 18.5% drop in April 2003 compared with April 2002 and it cost the hospitality industry a reported $7billion. Since 2013 the size of the Chinese economy has grown exponentially. The world is reliant on Chinese markets supplying goods and the internal Chinese consumer market of 1.4 billion people with a growing appetite for electronic gadgets and fashion is huge. Chinese tourists made 149 million overseas trips in 2018, with total spending amounting to $130 billion, according to a report released by the China Tourism Academy. Oxford Economics has predicted China’s economic growth will slip to 5.6 percent in 2020 as a result of the virus. That would reduce 2020 global economic growth by 0.2 percent to an annual rate of 2.3 percent - the slowest pace since the global financial crisis. After SARS, there were several months of economic contraction in China followed by a dramatic rebound. This might happen this time as well but in the meantime whatever happens in China will be felt around the world.