China Suspends Tourism to Contain the Coronavirus

Thailand saw slower growth of foreign tourist arrivals of 4.2% last year due to an over inflated currency and a slowing of Chinese tourists. Now China’s new coronavirus has struck at a time of faltering economic growth.

Visitors from China, also Thailand’s biggest source of tourists, increased by 4.4% to 10.99 million in 2019.

Now China has ordered all travel agencies to suspend sales of domestic and international tours. The order comes in an effort to contain the coronavirus. A SARS like virus that has already killed 25 and also infected thousands.

China’s Ministry of Culture and Tourism ordered travel agencies and tourism companies to stop selling tour packages Friday. The action comes at the start of the Lunar New Year holidays. A time when millions of Chinese travel abroad, especially to Thailand.

China is taking extraordinary measures as it tries to halt a disease that some fear could rival SARS.

A huge blow to Thailand’s Tourism sector

The move will be a significant blow to the tourism industry in Thailand. Chinese tourists are the biggest source of outbound travelers worldwide. They spent an astounding US$130 billion overseas in 2018.

While globally more tourists arrange their own travel, more than half of China’s overseas travellers still choose package tours, according to the China Tourism Academy.

Kasikorn Research Centre on Friday predicted the number of Chinese tourists may fall 0.5%-2.0% this year. Now China’s coronavirus has added to concerns of the Tourism industry.

On Friday Thailand confirmed its fifth case of the coronavirus just as Lunar New Year holiday begins. The patient is a 33-year-old woman from Wuhan were the coronavirus originated from.

The woman arrived in Bangkok on Jan. 21 with her daughter and visited a private hospital. She was complaining of fever, coughing and muscle aches. Before being transferred to a government hospital on Jan. 23. Her daughter tested negative for the coronavirus.

“The outbreak of coronavirus is a risk. The strong Thai baht may also affect tourism growth,” said Tim Leelahaphan, economist of Standard Chartered.

“That is unlikely to help an already-slowing economy,” he said. Also adding he expected the central bank to cut its policy rate by a quarter point in the first quarter.

The Bank of Thailand cut the key rate twice in 2019, taking it to a record low of 1.25%. The Monetary Policy Committee will next review monetary policy on Feb 5.

The World Bank forecast economic growth of 2.7% this year. Picking up slightly from an estimated 2.5% in 2019, a 5-year low.

Source: Bloomberg, Reuters