If you think the coronavirus won’t have a significant impact on US tourism, think again.
As of the writing of this article, there are 71,000+ worldwide cases of coronavirus (known as 2019-nCoV) and more than 1,800 deaths. The CDC has issued a Warning Level 3 China Travel Notice; recommending the travelers avoid all nonessential travel to China. Although the virus is predominantly in China, it has managed to spread to at least 20 other countries including the US where it has been found in five states so far. United, American and Delta airlines have all halted flights between the US and China. Similarly, Royal Caribbean and Norwegian Cruise Lines have cancelled or restricted routes to and from China. Royal Caribbean just released a statement saying “There are still too many variables and uncertainties regarding this outbreak to calculate the overall impact on the business.”
How will the Coronavirus Affect Tourism in the US?
Tourism Economics – a trusted travel and tourism research company – just released a timely report detailing the effects the coronavirus will have on US tourism. In the report, Tourism Economics states that China is the largest travel export market for the US with Chinese visitors spending about $6,000 per visit. Roughly 65% of Chinese visitors stay in a hotel (on average 15 nights). The report projects that visits to the U.S. from China will drop an estimated 25% in 2020 as a result of the coronavirus. Adam Sacks, President of Tourism Economics, has stated that this will result in a loss of 4 million hotel roomnights and $5.8 billion in visitor spending in 2020, and potentially 7.8 million roomnights and $10.3 billion in spending through 2024 (from 1/30/2020 webinar entitled: U.S. economy and hotel industry 2020 outlook: Navigating the slowdown).
SARS Outbreak as a Benchmark
The SARS outbreak of 2003, which lasted from March to July of that year, resulted in a 30% decline in visitors from China. Stanley Perlman, a virologist at the University of Iowa who is part of the Coronavirus Study Group, a subset of the International Committee on the Taxonomy of Viruses, stated that “It’s close to SARS…so related to the previous virus, it needs to be included in its name.”
Although there was a 29% increase in visits to the US from China in 2004, it took three years for the Chinese travel market to completely recover to pre-SARS-outbreak levels of 400,000 overnight visitors. The experts at Tourism Economics believe the coronavirus will follow a similar path as SARS with the bulk of the loss occurring in 2020.
California and New York Will be Hardest Hit
California and New York have historically seen the greatest numbers of Chinese tourists and will, according to Tourism Economics, be the hardest hit by travel fallout from the coronavirus. Almost 20% of overseas visits to California are from China. In 2019, California had 1.7 million overnight visits from China with New York a close second at 1.2 million. Nevada, Washington, and Hawaii follow close behind.
When we look at numbers on a city level, we see that the top cities for Chinese tourism are Los Angeles, Riverside and San Francisco in California, NYC in New York and Seattle, WA is not far behind. Hoteliers in these cities are likely to feel more of an impact than those in cities less frequented by Chinese tourists.
There is no doubt that the coronavirus will impact tourism and that hoteliers need to be aware of the implications in their cities. For now, all we can do is watch this virus play out on the world stage and hope we bounce back faster than we did in 2003.