The outbreak of the coronavirus and the resultant ban on travel is expected to impact airport retail worldwide causing concern for airport operators and retailers, according to analytics firm GlobalData.
Forecast to rise by 6.1 percent this year to 48.2 billion dollars, global airport retail sales are bound to drop due to an imminent decline in passenger numbers and thus spending. The ‘side-effect’ of the virus on everything from luxury goods sales and accommodation to airlines and markets could be great, particularly in view of the fact that China is the world’s second largest economy.
“Over the last few years airport retailers, especially those in Europe, have tailored their propositions, integrated Chinese payment solutions and invested in Mandarin-speaking staff to target Chinese passengers and maximize sales growth opportunities,” said Honor Strachan, principal analyst at GlobalData.
“If outbound tourism from China suffers as a result of coronavirus, airport operators and retailers must adapt their strategies to target other passengers,” he adds.
Gloria Guevara, president & CEO of the World Travel & Tourism Council (WTTC), was quick to underline that global travel and tourism sector has lessons to learn from the coronavirus outbreak, so that it can address the potentially the epidemic before it leaves a damaging and lasting economic impact on sector.
“Experience has taught us that global coordination and cooperation, with collaboration between the public and private sector, is going to be vital in containing the spread of the coronavirus throughout China and beyond,” Guevara said.
The GlobalData report refers to the 2003 SARS incident which saw visitor numbers to Thailand, Malaysia, Singapore and Hong Kong plunge causing airlines to ground planes and reduce flight schedules. Some retailers are even considering closing stores, with the China Duty Free Group closing its mall in Haitang Bay.
According to WTTC analyses of previous viral epidemics, average recovery time for visitor numbers to a destination was 19 months. However, with effective measures this can drop to 10 months.
“Previous cases have also shown us that closing airports, cancelling flights and closing borders often has a greater economic impact than the outbreak itself,” said Guevara, adding that the most effective management of a crisis “requires rapid activation of effective emergency plans” as well as quick, accurate and transparent communication, crucial in order to contain panic and mitigate negative economic losses.
So far, the coronavirus has cost the lives of 130 people and infected at least 5,974 exceeding the SARS 2002-03 figures.