Coronavirus: India tour operators face severe blow from China outbreak

Chinese tourists listening to their guide at the Taj Mahal in Agra on Jan 28, 2020. PHOTO: AFP

NEW DELHI (REUTERS) - Indian tour operators estimate they could lose up to US$500 million (S$695 million) because of cancellations from tourists from China and other countries due to the coronavirus outbreak, a cost that could rise fourfold if it persists through the year.

State carrier Air India has cancelled flights to China and Hong Kong until further notice, while private carrier IndiGo has suspended its flights until Feb 20.

"There is a panic in the tourism sector as thousands of bookings have been cancelled," said Mr E.M. Najeeb, vice-president of the Indian Association of Tour Operators.

He said foreign as well as domestic tourists were cancelling travel to the southern state of Kerala, where three cases of the disease have been confirmed, prompting state authorities to declare a state of emergency.

More than 280,000 Chinese tourists visited India in 2018 and were among the top 10 spenders by nationality despite being less than 3 per cent of 10.6 million foreign tourists in 2018, according to government estimates.

Tour operators said more than 50,000 Chinese tourists were expected to visit during January-February and most of these bookings were now cancelled. India, like other countries, has blocked the entry of people from China and Hong Kong.

"We fear immediate loss of up to US$500 million as the coronavirus outbreak has hit the arrival of tourists from China, Hong Kong and neighbouring countries," said Mr Pronab Sarkar, the president of the tour operators' association.

He said losses for domestic tour operators would be much higher, as many outgoing local tourists to China and other countries were also cancelling bookings after the outbreak.

India annually earns nearly US$30 billion from foreign tourist arrivals, and is worried that it could harm already weakened growth.

Mr Sanjeev Sanyal, principal economic adviser to the finance ministry, told Reuters that the authorities were following the situation closely and would quickly respond as it evolved.

However, India could also benefit as the outbreak could lead to lower oil prices and softer global interest rates, he said.

Reserve Bank governor Shaktikanta Das flagged coronavirus as a new risk for stuttering economic growth, estimated to slip to an 11-year low of 5 per cent in the financial year ending in March.

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