INTERNATIONAL. Lunar New Year – the biggest holiday period for many Chinese nationals – started today on a cautious note as the Coronavirus infection spreads. But, from a short-terms numbers perspective, there is some good news for travel retailers around the world.
On Wednesday, tax refund specialist Global Blue published data showing that some cities would see significant gains from inbound travel from China. For example, travel to Spain and Japan was projected to be up by +21% for the first week of Chinese New Year (versus the same period for the event in 2019).
Not far behind were the UK (+18%), Italy (+15%) and Singapore (+14%), with Germany and France at +9% and +5% respectively. The increases are based on figures from seat-booking analyst ForwardKeys though, at the time of writing, the Moodie Davitt Report was unable to confirm the date these data were retrieved.
They would have been compiled before a travel lockdown began in Wuhan at 10am on 23 January to prevent the 2019-nCoV spreading. However, until now, no other international travel bans from major China air gateways have been imposed.
This year’s Lunar New Year and accompanying public holidays in China are taking place from 24-30 January. The period is one of the most hectic in the Chinese calendar – with many flight bookings made well in advance.
Global Blue noted that “across our key destinations [cited by the company as Japan, Spain, UK, Italy, Singapore, Germany and France-Ed]) there has been an almost +20% rise in flight bookings” for 2020. While these growth rates may not materialise due to the new travel suspensions in place (and to others deciding not to travel) the forecast offers hope for traveler retailers that if the crisis eases relatively quickly, 2020 could still be a good year.
Biggest outbound growth from Tier 2, 3 and 4 cities
The effective quarantining of Chinese citizens in Wuhan – where the new virus strain originated – and some areas in the wider province of Hubei, will dampen outbound numbers from China. For example, prior to the ban there were three direct flights per week from Wuhan to London Heathrow. About 2,000 people flew in from the Chinese city in the two weeks before flights were cancelled.
While global airports have traditionally seen incoming traffic from Tier 1 cities such as Shanghai and Beijing, ForwardKeys data suggest that this Chinese New Year growth from Tier 2, 3 and 4 cities will be much greater. Tier 1 outbound growth for the first week of the celebration is forecast to be up +12%, but for Tier 2 cities it is +28%, and for Tiers 3 and 4 it is +27%.
The impact of the travel ban from Wuhan – which has direct flights to some 21 countries – can only be estimated. Travel data expert OAG has analysed first quarter data for this year which shows that nearly 90% of all capacity offered is to other cities in China. The two largest international markets for Wuhan are Thailand with nearly 107,000 seats, and Japan with some 67,000 seats available.
Wuhan ban to hit Bangkok and Hong Kong airports hardest
Using the first quarter of 2019 as a proxy for likely travel patterns this year, OAG has identified the top ten countries and cities for international bookings from Wuhan (see table).
OAG Chief Analyst John Grant said: “Bangkok is clearly the major international destination for traffic to and from Wuhan with on average around 545 arrivals each day in the first quarter of 2019 spread across both airports (Suvarnabhumi and Don Mueang). Hong Kong, the second-largest market with some 22,000 arrivals, may actually be significantly down in bookings this year given the unrest in the city and its impact on demand.”
From a safety aspect he argues that, were a travel ban not been in place, it would be relatively simple to isolate sick travellers from Wuhan because the majority rely on connecting hubs to get to their final destinations.
“Six of the top ten gateway cities for bookings to international destinations are actually located in China, with Guangzhou the key connection. Tracking the major gateways for bookings from Wuhan is an important part of any containment programme. Domestic flights from Wuhan to these points should be checked for passengers showing symptoms of the virus.”