Coronavirus Puts A Crimp On The Chinese Tourism Industry

A notice advising all staff and visitors to wear protective masks stands outside the closed Ocean Park in Hong Kong on Monday.

Paul Yeung/Bloomberg via Getty Images

Airlines, cruise ships and high-end hotels worldwide are bracing for a sharp downturn in business because of the fast-spreading strain of coronavirus.

Fear of the respiratory virus, which has infected more than 24,600 people in over two dozen countries, has brought the lucrative Chinese tourism industry to a screeching halt. Beijing has halted tour groups from leaving China, and countries such as the U.S., Australia and Singapore are denying entry to foreign nationals who have recently been in China.

Dozens of airlines have suspended flights to and from China to try to contain the virus known as 2019-nCoV.

The International Air Transport Association (IATA) says the cancellation of thousands of flights will impact the industry but that it has proven resilient to similar shocks in the past. Both business and leisure travel took a hit during the 2003 outbreak of a similar coronavirus — SARS (severe acute respiratory syndrome) — but returned to pre-crisis levels within nine months.

Meanwhile, thousands of passengers and crew members, have been stranded on two cruise ships because of the coronavirus. Some 3,700 people aboard the Diamond Princess are under quarantine off the coast of Japan after a man who disembarked in Hong Kong tested positive. Health officials tested people still on the ship and say results so far show at least 10 of them are infected. Meanwhile, about 1,800 people aboard the second ship, World Dream, are being quarantined at a dock in Hong Kong.

A number of cruise lines, such as Royal Caribbean and Norwegian Cruise Line, have cancelled sailings to and from China or placed restrictions on passengers since the outbreak began.

"There are still too many variables and uncertainties regarding this outbreak to calculate the overall impact on the business," Royal Caribbean said in a statement last week. The company, which says it has cancelled eight cruises so far, added, "If these travel restrictions continue for an extended period of time, they could have a material impact on the overall financial performance of the company."

A number of cruise lines, such as Royal Caribbean and Norwegian Cruise Line, have cancelled sailings to and from China or placed restrictions on passengers since the outbreak began.

"There are still too many variables and uncertainties regarding this outbreak to calculate the overall impact on the business," Royal Caribbean said in a statement last week. The company, which says it has cancelled eight cruises so far, added, "If these travel restrictions continue for an extended period of time, they could have a material impact on the overall financial performance of the company.