Analysis

Dark clouds loom over Lunar New Year celebrations

As millions of Chinese holidaymakers head off on their annual Lunar New Year travels within China and overseas, the traditional sense of optimism that accompanies this auspicious festive period is being overshadowed by a health crisis that is escalating with frightening speed. Martin Moodie and Min Yong Jung report.

Is this a repeat of SARS? That’s the question no-one in aviation, tourism and travel retail circles wants to ask, but one that they all must.

As the breakout of the new coronavirus strain – full name 2019 Novel Coronavirus (2019-nCoV) – escalates with startling speed and devastating consequences, inevitable comparisons with the SARS (Severe Acute Respiratory Syndrome) health crisis of 2003 are being drawn by government, medical and business communities. Almost 8,100 cases of SARS were reported through late 2002 to mid-2003, resulting in 774 deaths across 37 countries, and severe repercussions for the global tourism, aviation and travel retail sectors. Traffic slumped at airports across the world, with passenger volumes at key locations such as Singapore Changi and Hong Kong International down by -50% to -70% during the depth of the crisis in April and May of 2003.

As we went to press, around 650 cases of 2019-nCoV had been reported, with 17 deaths. By the time readers around the world view this article, both numbers are likely to be much higher. Just how high is a matter of much governmental and medical conjecture as Chinese authorities rush to confine the outbreak – which emanated from Wuhan in Hubei Province – and their equivalents around the world screen travellers from the Chinese city and confine those suspected of carrying the virus.

All this at a time that normally represents an exuberant global celebration of the Lunar New Year, one that coincides with an extraordinary number of travel journeys both within and from China – the epicentre of travel retail 2020-style.

While there are similarities with SARS (both are a strain of coronavirus; both have involved rapid human-to-human transmission; and their spread has been hastened by air and other forms of travel) there are also important differences. The most important may be the very different approach of the Chinese authorities this time around. Unlike the lack of transparency that contributed so much to SARS spiraling out of control in 2003, 17 years on there is much greater urgency, openness and shared information. Chinese state media such as Global Times are providing real-time updates both to local and international readers and local authorities all around the country are introducing strict screening, prevention and confinement measures.

Chinese authorities warned that anyone who concealed information and new cases would be ‘nailed on the pillar of shame for eternity’

The first outbreak of the coronavirus in Wuhan is believed to have occurred on 10 December. Local authorities issued an alert to the public on 30 December (‘urgent notice on the treatment on pneumonia of unknown cause’) and reported the case to the World Health Organization just one day later.

Unlike the central government’s much-criticised inaction during SARS, President Xi Jinping has led from the front. On 20 January he announced that it was crucial to take every possible measure to combat the new outbreak. Chinese authorities warned that anyone who concealed information and new cases would be “nailed on the pillar of shame for eternity”.

Such transparency has helped the international community (and the travel retail sector) to better understand, identify and prepare for the disease, with screening of passengers now in place at numerous popular Chinese destinations.

However, one cannot ignore the rapid development in Chinese air travel since SARS. Passenger numbers increased over six-fold between 2003 and 2018, a comparison that underlines just how difficult it will be to confine the international spread of 2019-nCoV. Total air passengers (domestic and international) increased from 85.9 million in 2002 before SARS to 611.7 million in 2018; while international air travellers from China soared from 8.38 million in 2003 to 63.67 million in 2018, according to National Bureau of Statistics and Civil Aviation Administration of China. The worrying implication is that the virus may spread faster and to more locations, rather than being confined to a small number of countries.

Growth in air passenger traffic in China 2003-2018

Passenger figures in millions; Source: National Bureau of Statistics China

As of 23 January, the Chinese authorities had confirmed around 640 cases, 17 deaths and 4,928 medical observations. At that point, the case fatality rate stood at 2.7%. The equivalent rate during the entire SARS epidemic was 9.6% and the medical community will be keeping a watchful eye on this key indicator. Reported deaths have all originated from Hubei Province. Over 25 provinces in China have reported cases of the virus and confirmed offshore cases have so far been reported in Hong Kong, Macau, Taiwan, the US, Japan, Thailand and South Korea.

How the coronavirus strain has spread since the first public alert at the end of 2019

(Source: Wuhan Municipal Health Commission)

The international spread of the disease is certain to accelerate during Lunar New Year as millions of Chinese head abroad for what is traditionally a time of great celebration and optimism. That sense of joy, though, will be muted this year as the Chinese welcome in the Year of the Rat on a distinctly cautious note.

How the scale of the potential problem has grown

Source: Moodie Davitt Business Intelligence Unit. Note: The share price of European and US stocks are based on their share price at 2pm GMT.

The Moodie Davitt eZine

Issue 275 | 23 January 2020

The Moodie Davitt eZine is published 20 times per year by The Moodie Davitt Report (Moodie International Ltd).

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