ETOA expects demand from China to halve this year

ETOA is pressing ahead with plans for all scheduled events, even a China European Marketplace (CEM) in Shanghai on May 12.

Its reassurance came as the organisers of ITB Berlin cancelled the event, due to take place this week.

"Tourism is a vital component in the economy, and a bell-weather for confidence in the service sector," said CEO Tom Jenkins. "Where it can continue, it must."

Jenkins said ETOA operators will continue to run tours, unless explicitly ordered otherwise.

"People from a non-affected area visiting another non-affected area pose no threat," said Jenkins.

But he added: "The new Coronavirus outbreak is posing extraordinary difficulties for the European Inbound travel industry."

ETOA has provided an update for the three origin markets of concern:

China
The Chinese market for 2020 had been looking good: demand for Europe was 11% up on 2019. But we have seen a complete cessation of activity. Effectively there have been no tourist departures since January 27 when we lost almost 50% of the Chinese New Year business as a result of the outbreak. We do not expect any significant numbers to emerge before the end of April. If you include the lost New Year business, this closedown of outbound tourism means that nearly 30% of the people who would normally come to Europe in a year have not done so.

The period February-April is an important booking period for the higher season months of May June and July. Even if all controls are relaxed by May, we have to anticipate a dramatic weakening in delivery for the following three months: clients will not have had time to plan, book and apply for visas. So it is fair to anticipate a further softening of the market in this period: maybe half of the people we would normally anticipate coming will do so.

On the basis that the market recovers from what is a zero level now, and assuming that many of those who had to cancel rebook later in the year, we can expect the total demand from China in 2020 to have shrunk by 45-55% against 2019. Were this to be the case, this is roughly 1.7 million fewer visitors, with a spending drop in the region of €2.5 billion.

Japan
Japan (and South East Asia) had been looking extremely strong, with bookings running over 15% up on last year. These had held firm until February, where a combination of disruption to the air-lift and a nervousness concerning travel started to erode confidence in the market. Since the declaration of the outbreak in Italy, bookings have stalled and cancellations have started to come in. If the situation stabilises quickly, then operators will be happy with a shortfall of 20% on last year. Japan in 2019 sent approximately 3.5 million visitors to Europe, spending roughly €4 billion.

United States
Like other markets, the US was looking to be in a strong position: demand for Europe was approximately 10% up on last year. It is by far the most important long haul origin market, sending roughly 19 million visitors in 2019, who spent approximately €30 billion.

The Coronavirus outbreak has occurred during a low season for travel, but what is normally the main booking period for people coming to Europe from North America. The outbreak in Italy (which represents a major component in a European trip) has led to a wave of abandoned reservations that is affecting all of Europe. It is too early to put any data on this, but cancellations are coming in when we should be seeing bookings.

The US has become of robust and resilient market, if we see a resolution to the crisis then much of the damage can be contained. There is no requirement for visas, Europe is a familiar destination and there is substantial air-lift. If there is a sustained movement away from travel to Europe we may be looking at shortfalls in arrivals similar to that which we anticipate from Japan.
Tom Jenkins provided further comment: