Singapore and Malaysia tourism boards outline plans amidst coronavirus crisis

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It comes as no surprise that the Wuhan coronavirus is taking a toll on transport and tourism sectors worldwide, especially to many in Asia. Singapore Airlines has reduced capacity for some of its routes to mainland China while Vietjet suspended all flights to and from mainland China. Meanwhile, AirAsia and Malindo Air cancelled all flights bound to and from Wuhan. Malaysia Airlines is also allowing cancellations with full refunds and free ticket alterations on flights to and from mainland China.

In a bid to minimise the risk of community spread of the Wuhan coronavirus, Singapore has banned new visitors of any nationality who recently travelled to mainland China within the last 14 days. Less than a day after the travel restrictions came into effect on 1 February, 15 travellers were refused entry into Singapore. Singapore's Ministry of Trade and Industry (MTI) said the initial economic impact of the outbreak has been felt most intensely by the transport and tourism sectors, with a decline in air traffic through Changi and an increase in hotel room cancellations.

The Singapore government is also expecting a knock-on impact on related industries and firms. It is also prepared to support Singapore firms and workers in the event of a broad-based slowdown in the coming months, including a package of measures to help viable companies stay afloat and help workers stay in their jobs. This includes support for firms during this period, by addressing their short-term cash flow needs, and help for firms to retain and train their workers during this period, including providing some support for part of their wage costs. MTI added that full details of the package of relief measures will be announced at Budget 2020 on 18 February.

Meanwhile, the Singapore Tourism Board (STB) said it will waive licence fees for hotels, travel agents and tourist guides, and defray enhanced cleaning costs of hotels that provided accommodation to confirmed and suspected cases of the Wuhan coronavirus infections. As part of this initial package, hotels that provided accommodation to suspected and confirmed cases of infections will get help with their environmental cleaning and disinfection costs.

STB will cover up to 50% of third-party professional cleaning fees, capped at SG$20,000 per establishment for hotels with confirmed cases; and SG$10,000 per establishment for hotels with suspected cases. This will be backdated to 23 January, when the first case of coronavirus infection in Singapore was detected. Applications will open between 10 Feb and 30 April, following which STB will assess the situation to see if further support is required.

In a statement to Marketing, STB's director, communications and marketing capability, Terrence Voon, said Chinese tourists account for about 20% of its total international visitor arrivals, with about 3.6 million visitors to Singapore in 2019. As such, it expects the latest measures to have a significant and immediate impact on the tourism industry. However, Voon said STB has a diversified market portfolio that will help to mitigate some of it. He added that so far, there is no evidence of community spread in Singapore, and its tourism industry is operating "as usual with minimal disruptions".

"But the situation is expected to persist, and we need to prepare for all scenarios in order to support tourism businesses and workers. We are working out the appropriate measures to help them, and to ensure that Singapore is on the right track to recover swiftly from this," Voon said. He added that the health and safety of Singaporeans, visitors and those who work in the tourism industry remains STB's priority.

When asked how big a role does Chinese New Year play in attracting Chinese tourists to Singapore, Voon said STB does not track data on specific festive seasons.

No change in tourist targets for Visit Malaysia 2020 campaign

Meanwhile, Malaysia has only banned flights from the Hubei province to the country and flights from other parts of mainland China to Malaysia remain unaffected, except in Sabah where all incoming flights from mainland China have been suspended.

This year is a big year for Malaysia with its Visit Malaysia 2020 (VM2020) campaign in full force. Since last year, the Malaysian government has been gearing up for VM2020, even tying up with Chinese travel and leisure information platform, Mafengwo, to target the Chinese inbound tourism market. Mafengwo’s senior VP Yu Zhuo said it is aims to help tourism players in Malaysia create “a richer online content” for Chinese tourists to create localised marketing strategies within the country.

Tourism Malaysia's spokesperson told Marketing that China has always been an important market for Malaysia's tourism industry. In terms of ranking, mainland China is currently Malaysia's third biggest contributor in tourist arrivals to the country. In contrast, the market was ranked fifth in 2009.

In 2009, the total tourist arrivals from mainland China was 1.02 million. A decade later, the figure has grown by 188.7% to 2.94 million in 2018.

"At this moment, our KPI [for Visit Malaysia 2020] remains unchanged. The initial target for tourist arrivals from the mainland China market is 3,485,000 for 2020," the spokesperson said. He added that Chinese New Year is one of the four main peak seasons for Chinese tourists visiting Malaysia, including July and August, the Golden Week in October, and December.

"Based on trends, the festive period can boost arrivals from the mainland China market up to 15% compared to without Chinese New Year," the spokesperson said, adding that it has yet to receive the latest data from the immigration department on tourist arrival trends this year. Ministry of Tourism Indonesia did not respond to Marketing Interactive's queries.

Economy harder hit than SARS

As companies continue implementing measures to safeguard guests and employees, analysts from Japanese financial holding company Nomura expect the economic impact from the Wuhan coronavirus to be larger in comparison to SARS in 2003, according to multiple media reports including CNBC.

In a statement to Marketing, James Walton, transportation, hospitality and services sector leader at Deloitte Southeast Asia said Thailand will probably be the hardest hit as it is the most visited country in ASEAN by Chinese travellers, with almost 11 million of them last year. According to him, the China Outbound Tourism Research Institute predicted some 7 million Chinese would travel abroad during Chinese New Year. With the outbreak, it is without a doubt that there will be "a sharp drop" in visitor arrivals from mainland China for February.

In addition to the significant impact on tourism in ASEAN in the short term, Walton said the impact also extends to Meetings, Incentives, Conventions and Exhibitions (MICE) groups. Some travellers have already cancelled their plans or are opting to change their destination, especially if the countries that they were originally travelling to have confirmed cases of the coronavirus.

"As we move forward, if the situation continues, it will begin to affect people making upcoming short term travel plans and planning locations for their MICE events," he added. That said, Walton explained it is still too early to predict the extent of the impact that the coronavirus outbreak could have on the travel and hospitality sector.

If it spreads to be a truly regional or global pandemic, we can imagine its impact could be as economically disastrous as SARS epidemic in 2003.

Walton added that some of the possible measures the Singapore government might adopt to bolster the tourism-related industries during the upcoming Budget 2020 could include property tax rebates, a reduction in foreign worker levy for unskilled workers, measures to stimulate domestic tourism, and a bridging loan programme for SMEs. The loan can help in alleviating short-term cash flow problems, he explained.

"We may also expect to see STB take strong steps to boost the nation’s tourism brand in the coming weeks and months to counter the potential Chinese visitor shortfall," he added.

Although the majority of cases are still in mainland China, a great deal of fear remains throughout the Asian region about the potential spread of the virus. Rajiv Biswas, APAC Chief Economist, IHS Markit told Marketing that if the spread of the Wuhan virus in Southeast Asia can be contained during the next two months, then the region's MICE industry should be able to continue its normal program of activities during most of 2020. Additionally, if an effective vaccine is developed by mid-2020, the MICE industry will most likely rebound strongly.

"Some events that were originally planned to be held in mainland China in 2020 could be shifted to Southeast Asian cities. So Singapore, Malaysia and Indonesia could see some increase in events, so long as the Wuhan virus cases are negligible in Southeast Asia," he added. That said, companies would experience a "drastic drop" in the number of attendees from mainland China in the near term. Also, even if the virus is contained, Biswas said the fear factor will also impact attendance at events.

On the other hand, if the number of Wuhan virus cases increases rapidly in Southeast Asia, then the MICE industry will be heavily impacted, as attendance numbers will be low and public health authorities could even require that such events are no longer held until the virus is brought under control, he explained.

Hoteliers which Marketing spoke to said they have stepped up safety and hygiene measures during this critical period. Marriott International's spokesperson said most of its hotels across its Asia Pacific portfolio will continue to operate as usual with additional safety and hygiene measures. Marriott spokesperson told Marketing it expects the outbreak to continue to have an impact in the short term.

For Four Seasons Hotels and Resorts Asia Pacific, it has increased the frequency of disinfection measures in its public spaces and anti-bacterial hand sanitisers have been placed in its restaurants. The hotel chain is also waiving cancellation fees until 15 February for guests travelling to Four Seasons Hotels and Resorts in Greater China, as well as travelling from Greater China to any Four Seasons hotel or resort globally, regardless of the booking channel.

Joining hoteliers, Airbnb has also activated its extenuating circumstances policy to offer impacted hosts and guests the option of a cancellation of their reservations without charges. The company said it will be continuously evaluating and updating this policy, in line with official guidance.

In the meantime, Accor's spokesperson told Marketing it is too early for the company to comment on business impact or how the situation might unfold. Both Marina Bay Sands and Banyan Tree Hotels and Resorts' spokesperson told Marketing that it is observing guidelines to ensure that all precautions are taken to manage the situation.

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