Coronavirus is a threat to not only public health, but to the global economy. With China, from where COVID-19 originated (Wuhan), being the place almost everything tends to be made, the global economy is taking a massive hit. Things for international tourism are also looking somewhat concerning. With Europe’s tourist season just around the corner, how much of a hammering can Croatian tourism – the country’s strongest economic branch – expect?
As Novac/Ruzica Mikacic writes on the 2nd of March, 2020, the world’s tourism industry, which has been steadfastly resisting terrorism, wars, epidemics, fear of (a lack of) security when on holiday, tsunamis and storms for a decade, could now be dragged to its knees. The coronavirus outbreak is the first reason why the global tourism industry has had to admit that it isn’t strong enough to deal with it without fear and danger, the cancellation of the biggest ITB World Trade Fair in Berlin being the best confirmation of that.
That has never happened in the 54-year history of the huge Berlin Fair and ITB, so the concerns of tourism professionals at the threshold of the preseason are thus much greater.
The casualness with which tourist professionals shook hands until yesterday, saying that everything surrounding the epidemic of coronavirus would calm down by Easter without major consequences for tourist trips, disappeared overnight when Germany quarantined thousands of its citizens in the last 48 hours and became one from the top ten countries with the highest number of infected and carriers of the quickly spreading virus.
The fact that during the five days of the largest ITB World Tourism Exchange, the German capital would see about 160,000 visitors crammed into place and at least another 50,000 employees at the booths of 180 countries, set alarm bells off at the German Federal Ministry of Health which made the decision to put a stop to the event.
Irredeemable financial losses
It’s now quite clear that the coronavirus has shaken up tourism developments across the world more than any problematic situation in the past turbulent decade. Until a week ago, the balance of pre-season travel reservations was dormant, there were no new bookings, but there were no significant cancellations. In just a few days – things changed significantly, for Croatian tourism too.
”With the cancellations from Asian groups alone who were planning trips through Croatia over the course of several months this winter will see my company lose several hundred thousand euros in traffic and it will be impossible to make up for all that.
We’re now in a problem with other markets as reservations haven’t been being made for days now, and our partners from abroad are already inquiring about cancellation options and looking for better conditions for cancellation. Specifically, everyone now wants to extend the cancellation period without penalty to just one week before the trip, so tourists can decide at the last minute whether they want to embark on their travels or not. Everything turns into a “last minute” sale, which makes it impossible to work normally,” says an experienced travel agent operating within the Croatian tourism industry for the Slobodna Dalmacija publication.
Concerns are also growing with Croatian tourism companies well. Currently, those in the best position are those who have received numerous bookings since December 2019 and mid-January this year.
”Now we have 50 new airlines compared to last year, a successful year is ahead. We’ve spoken with the largest tour operators in Germany and it’s too early for accurate figures, but Croatia’s position is good and stable. Compared to its competitors, Croatia has the best position at the moment. We plan to increase German arrivals by 3 percent, but even if we were to repeat what we had in 2019 with three million Germans in Croatia, we’d be satisfied,” said Kristjan Stanicic, director of the Croatian National Tourist Board (HTZ), in Munich a few days ago.
”The bookings for 2020’s season was off to a great start in December and by mid-January we had up to twelve percent more bookings. Since mid-January, everything has stopped. Hopefully it will be better in early March. The reason for this is coronavirus, because the Germans, like everyone else, are frightened and they aren’t booking because they don’t know how things will progress with the virus in the future. This is not only the case for Croatia, the virus is everywhere, Greece, Turkey, Italy, all cruiser ships, everyone is experiencing worse sales right now.
Looking at the total balance of bookings for this year, we’re still positive and we have six, seven percent growth. Private accommodation is also doing well, we have a big plus in bookings of eighteen percent. Sales for the post-season by the end of October are excellent, and the preseason months until June are significantly slower than last year,” said Konstantin Gaitanides, director of ID Riva Tours in Munich.
Last minute bookings are likely to cause issues and confusion for tourism companies worldwide, including for the Croatian tourism industry…
A similar situation to that of Croatia has been seen for reservations for Italy and Turkey, according to German tour operators, who are expecting a strong “last minute”. Specifically, at the beginning of March, 65 percent of Germans still hadn’t booked their holidays abroad, and this is absolutely atypical for German booking habits. At this time last year, there were 20 percent more bookings already booked in Germany, according to analyses and reports such as IPK International and Reise Analyse, published over recent days.
This year, however, the Germans are waiting and delaying their decisions because of the current coronavirus epidemic. All this worries tour operators in Germany just like it worries their hosts here in Croatia, especially now that ITB has been cancelled.
Namely, as the world’s largest business tourism gathering, in the run-up to the preseason, the basic contours of what the coming business year will look like are provided, directions, trends and signposts of how tourist traffic will unfold are seen. Without hundreds of conferences, analyses, contracts to be signed in Berlin this year and the launch of a new offer, the tourist world has now lost a very important compass in its business thanks to coronavirus fears.
Billions have now been lost
The World Tourism and Travel Council (WTTC) announced on Saturday that a drop in consumption and a reduced volume of travel worldwide have already cost the tourism sector the equivalent of about 22 billion dollars. The data was obtained with the help of the Oxford Institute, which compared the aftermath of Sars 2002/2003.
According to the WTTC, if coronavirus continues in this manner for as long as SARS did (about six months), then global tourism losses could doubledto around 49 billion dollars. But if it lasts longer than June, the losses will rise to 73 billion dollars, with Hong Kong, Macau, Thailand, Cambodia and the Philippines among the biggest losers in terms of tourism.
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