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Faculties and Departments => Tourism Concept => Tourism & Hospitality Management (THM) => Business & Entrepreneurship => Economic, Social impact => Topic started by: Sharmin Sultana on March 10, 2020, 04:33:37 PM

Title: BD tourism, aviation take hit by Coronavirus fallout
Post by: Sharmin Sultana on March 10, 2020, 04:33:37 PM
Several travel agencies and tour operators said many foreign tourists' planned trips to Bangladesh had been cancelled. The government has also advised to cancel all non-essential travels.

Besides cancelling almost all scheduled tours to China, many Bangladeshis cancelled tours to India, Bhutan, Thailand, Singapore, Malaysia and Vietnam.

One of the biggest setbacks is indefinite postponement of Dhaka Travel Mart 2020. The biggest travel and tourism extravaganza in Bangladesh, was the 17th such event, organised by The Bangladesh Monitor. Uncertainty of the situation forced postponement of the fair, scheduled to be held between March 12-14.

Mohibul Haque, Senior Secretary of the Ministry of Civil Aviation and Tourism told reporters at his office on February 13 that the impact of coronavirus had spread across the world. "We can't deny the fact that it will have some impact on Bangladesh."

Masud Hossain, Managing Director of The Bengal Tours Ltd said three popular celebrities were scheduled to come to Dhaka from Japan in March which has been postponed for an indefinite period of time.

Another fam trip of 10 leading tour operators and media representatives from Japan has been cancelled. Because China Southern, the airline partner of the trip, has cut its capacity to Dhaka from seven to three flights a week over coronavirus concerns. The Bengal Tours was the local hospitality partner.

Furthermore, the trips of Japanese tourists scheduled to take place in March-April also have high chances to be postponed as well, said Hossain.

The Bengal Tours also organises a weeklong wildlife sighting tour every year with Japanese tourists at Sundarban. Scheduled on March 26, it, too, has been cancelled.

Not only tourists from Japan but also from Europe are refraining from travel to Bangladesh or anywhere whatsoever. Hossain mentioned that six to seven trips of Bengal Tours with European tourists have been cancelled so far.

Speaking of the recovering measures, Hossain urged formation of an emergency crisis team to deal with this coronavirus situation. Bangladesh and Japan should send out press releases mentioning that Bangladesh is safe from coronavirus.

Impact on hotels and tourism loss

Taufiq Rahman, CEO of Journey Plus informed that till now four groups have cancelled bookings due to coronavirus epidemic. One group of tourists of Journey Plus was scheduled to come from Slovenia to Bangladesh on February 14 which was later cancelled even though neither of the countries have witnessed any coronavirus case so far. Because tourists are not feeling comfortable to fly anywhere right now.

A Taiwanese group of 21 was supposed to come to the country in March 12. But the recent ban imposed by the Bangladesh government on Taiwanese made them cancel the trip.

Taufiq said hotels are also suffering from the impact of coronavirus. Pan Pacific Sonargaon Hotel is witnessing a fall of 30 per cent in room occupancy. It is almost the same with any hotel in Bangladesh at present. More than 50 per cent fall has been witnessed in the entire hotel industry of the country.

"In the next one or two months, the tourism industry of our country will face a loss of at least BDT 100 crore, totalling airlines, hotels, tour operations, MICE, transportation, restaurants etc," said Taufiq.

Taufiq further claimed that the government should provide incentives to such organisations or waive their taxes so that they can cover the loss by a little bit which they are facing this year.

Impact on MICE

Meherun N Islam, Managing Director, CEMS Global said that 80 per cent of the country's tourism earnings come from business travellers who come for MICE purposes. Of which, tradeshows cover a huge portion, then, comes conferences followed by meetings of importers of other countries.

Even though a lion share of these business travellers are Chinese, there are many from India and Japan while some are even from uncommon countries like Namibia, Turkey, Ukraine and others, mentioned Meherun.

And this industry has been hit hard by the outbreak of the novel coronavirus originating from Wuhan in China. Overall the MICE market has witnessed a fall by 80 per cent due to coronavirus fears.

On February 27-29, CEMS Global's Dhaka International Fabric Fair Winter Edition, which was supposed to have 95 per cent of foreign participants, was cancelled over coronavirus, mentioned Meherun.

The Food and Agro Tech Fair as well as Medical and Laboratory Equipment Fair, organised by CEMS Global, both scheduled to take place in April have been postponed to July.

The cancellations of these three exhibitions have resulted in a loss of at least USD 1.1-1.2 million, said Meherun. However, they can recover 30 per cent of the loss if they are able to organise these later in the year once the scenario gets better.

Even global events organised by CEMS Global are facing cancellations. For instance, the Textile, Garments and Farbric Fair scheduled to take place on March 3-4 in Sri Lanka, has been cancelled.

"There are two more - one in October in Brazil and another in November in Morocco. However, there are not cancelled yet since there is still some time left. So if the world survives till then, they may take place," said the Managing Director.

"By March or April, if the unfortunate impacts of the coronavirus are not sorted or brought under controlled, we will never be able to overcome the loss," Meherun added.

Taslim Amin Shovon, CEO of tour operator Bizcon Holidays and former Director of Tour Operators Association of Bangladesh, said that he was forced to cancel several group trips to Sikkim, Bhutan and Darjeeling in February and March as holidaymakers cancelled their bookings.

Abdus Salam Aref, former Secretary General of the Association of Travel Agents of Bangladesh, said the number of outbound passengers had reduced by around 70-80 per cent and inbound passengers by 35-40 per cent.

Adverse impact on aviation

China's China Southern and China Eastern airlines operate direct flights between Dhaka and cities in China.

China Southern used to operate seven flights between Dhaka and Guangzhou while China Eastern used to operate seven flights between Dhaka and Kunming every week.

But, both of the carriers have reduced flight frequency to three flights a week.

Other international carriers operating in Bangladesh are feeling the pinch too.

Singapore Airlines has also temporarily suspended one flight to Dhaka bringing its total number of flights operating in Bangladesh to eight from nine.

In addition, Thai Airways has also cut two frequencies to Dhaka from Thailand effective till most of March. Flight TG339 was cancelled from February 25 while flight TG340 was cancelled from February 26.

Hong Kong-based Dragon Air, which used to operate four flights a week between Dhaka and China via Hong Kong, also reduced its number of flights.

Also, due to the imposition of ban on Umrah pilgrims by the Kingdom of Saudi Arabia, 40 per cent load dropped among all westbound airlines.

International Civil Aviation Organisation (ICAO) earlier in February reported that 70 airlines have cancelled all international flights in and out of China and 50 others have reduced their flight operations.

This fall in passenger growth comes at the busiest period of the year, when air travel for both business and tourism is usually high.

Impact on local airlines

The plan for Bangladeshi airlines to expand to international routes with new aircraft has hit a brick wall due to the coronavirus outbreak, which has slashed outbound passenger growth by 40 per cent in recent weeks.

Even worse, this sharp fall in passenger growth comes at the busiest period of the year when air travel for both business and tourism is usually high.

Cargo imports also fell by more than 60 per cent as raw material import remain suspended in China-one of the largest business hubs for Bangladesh-according to airlines industry insiders.

Since airfreight demand has been weakening worldwide, the outbreak of coronavirus will further add woes if the crisis prolongs, industry insiders fear.

Asia-Pacific carriers posted a 3.5 per cent decrease in demand for airfreight last year compared to a 2.8 per cent increase in 2018, according to the International Air Transport Association (IATA).

Biman Bangladesh Airlines has already begun to feel the pinch of a global slowdown as the fall in export-import growth has hit its cargo business, with revenue from goods transportation falling by 32 per cent in the first four months of the current fiscal year.

"The national carrier will have to bear more costs at the end of this year if the impact of coronavirus prolongs," said Md Mokabbir Hossain, Managing Director, Biman Bangladesh Airlines.

Biman was planning to open new routes to Guangzhou by March but the process was delayed due to the outbreak, he added.

Mokabbir said the Biman office in Guangzhou is ready but the inspection scheduled by the Chinese authority on February 12 was suspended.

"Moreover, outbound passengers to Singapore, Bangkok and Kuala Lumpur have dropped by more than 40 per cent as tourists are avoiding travel over health concerns," he further said.

However, Biman did not take any decision to cut flights as inbound flights are still full, he added.

The coronavirus outbreak has also forced airlines operating in Bangladesh to backtrack from their flight expansion plans centering on the construction of the third terminal of the Dhaka airport.

For instance, US-Bangla Airlines-the only local airline company operating flights to China-moved to cut flight frequency to Guangzhou from seven to only three per week.

"US-Bangla decided to reduce flights in China as number of both inbound and outbound passengers declined substantially, causing losses," said Sikder Mezbahuddin Ahmed, CEO, US-Bangla.

"The load factor has also decreased in these flights. The seats on outbound flights to Guangzhou are filled only by 30-35 per cent, whereas previously the occupancy rate was at least 65 per cent," he further mentioned.

At the same time, the seats on incoming flights to Dhaka are filled by 60 per cent, down from 90-95 per cent before the coronavirus outbreak.

Mezbahuddin said that although the country's airline operators were doing well amid fast growth of the aviation industry, the sudden break brought by coronavirus is hurting the industry, which will eventually negatively impact the overall economy.

Regent Airways, which operates flights in Kuala Lumpur and Singapore, also experienced a 15 per cent fall in outbound passenger growth in the last one week.

"Passengers are cancelling their ticket bookings due to safety concerns," said Hanif Zakaria, Chief Commercial Officer, Regent.

Though, outbound passenger growth has dropped, number of inbound passengers remains high as people consider Bangladesh safer since no cases of coronavirus have been reported yet, he added.

"Currently, we have three weekly flights on these international routes and we may cut flights if the crisis prolongs," he said.

The crisis hit the aviation industry at a time when international air passenger traffic has been slowing down in the global market.

In 2019, international passenger traffic in the global market climbed 4.1 per cent compared to a 7.1 per cent growth in 2018, according to IATA.

However, Bangladesh's fast growing economy, international business connections and tourism sector spared the local aviation industry from the global slowdown.

The IATA forecasts the air transport in Bangladesh to annually grow at 8.4 per cent until 2038 if the current trend continues. In 2018, air passenger flow in the country was 7.2 million, which will increase to 19.3 million by 2038.

Expecting future growth, airlines in the country are expanding their fleets.

source: Bangladesh Monitor