Global tourism cannot be over-reliant on China as a source market

Published: 8 March 2020 - 9:45 a.m.
By: Josh Corder

According to Pacific Asia Travel Association (PATA) CEO Mario Hardy, the economic impact of the coronavirus is “inconceivable” and extends countless industries. The travel and tourism industry is no exception, with hotels closing temporarily across large parts of China and hotels across the globe reporting slumped occupancy rates.

The damage of the coronavirus for the industry cannot be reversed at this point, with Hilton alone predicting its earnings could take a US$50 million blow this year due to the outbreak. Dr. Hardy however believes one key method to lessen the damage from similar situations moving forward is making sure hotels and tourism professionals do not rely on a single source market.

Speaking with Hotelier Middle East, Hardy said: “You have to diversify your portfolio, it doesn’t matter if it’s China, Russia or another country, but if you rely solely on one source market, one day you’ll face problems like we’re facing today.“

Beyond the current situation in China, Hardy said it should be common practice to ensure the industry can bounce back from a variety of global externalities. He continued: “It could be a pandemic, political tensions, economic impacts, it could be many things. Diversifying your source market is key, much like a financial advisor would tell you to diversify your portfolio. It’s the same here, you must make sure you have visitors coming from different parts of the world.”

Looking at one of the Arab world’s tourism hotspots, Dubai could be one of the places to feel the impact of China’s travel restrictions and bans. As revealed by The Department of Tourism and Commerce Marketing (Dubai Tourism) at the start of the year, China was one of the emirate’s top source markets for overnight visitors in 2019.

Though a smaller contribution than the likes of India which brought close to 2 million visitors to Dubai last year, visitation levels from China were similar to that of Oman and Russia. Similarly in the UAE capital, the Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) revealed China was one of its top source markets outside the GCC.

China is one of only a handful of countries to have cases confirmed by the World Health Organisation to exceed 1,000. Within the country, there are currently more than 80,000 cases and 3,000 deaths. The remaining 20,000 cases are dispersed across 93 countries and territories.

Hardy concluded with saying the global tourism industry is “relying too much” on China as a source market.

PATA is monitoring the current situation closely and recently opted to cancel its annual summit this year.

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