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Wuhan virus fears put squeeze on travel sector

Hotels and travel firms report lower occupancy and cancellations, but are in watch-and-wait mode as they launch health precautions; F&B and retail staying afloat for now

As fears stemming from the Wuhan virus outbreak put a damper on traffic to and from Greater China, hotels and travel companies in Singapore are reporting cancellations and lower occupancy; local restaurants are also reporting a fall in demand.


AS FEARS stemming from the Wuhan virus outbreak put a damper on traffic to and from Greater China, hotels and travel companies in Singapore are reporting cancellations and lower occupancy; local restaurants are also reporting a fall in demand.

However, although they have started to take some health precautions, most companies in the services sector are taking a wait-and-see approach and looking out for further directives from the government.

All travel bookings to and from China have been cancelled at travel agency Dynasty Travel, where China-bound tours make up a fifth of its overall sales, said Alicia Seah, its director of marketing and communications. The company expects travel demand to drop sharply for the next one to two months.

Still, it hopes the industry will recover more quickly than it did from the severe acute respiratory syndrome (Sars) outbreak, since the Singapore and Chinese governments would be more prepared. "The current regulations imposed by the relevant authorities in China are a good way to curb the virus, so we hope it will be short-term pain but long-term gain," Ms Seah said.

At ASA Holidays, China tours scheduled to depart during the Chinese New Year holiday were cancelled and the flights fully refunded by Singapore Airlines. Tours that departed before the holiday were cut short.

Dynasty Travel and another travel agency SA Tours said they plan to implement cost-cutting measures: Dynasty Travel expects to reduce advertising and possibly working days for its staff; SA Tours spokesman Eva Wu said the agency will scale down events and reduce advertising for destinations in China, and brainstorm alternative tour destinations. It has not yet implemented temperature taking for its staff, but will consider doing so soon.

To help travel agencies cope, the National Association of Travel Agents Singapore (Natas) is working with pharmacies to get discounts on fever scanners for tour groups, said the Natas Inbound Committee chairman Samson Tan.

As to one travel agency's suggestion that the Natas Travel Fair in February be postponed or cancelled if the situation does not improve by then, Mr Tan said Natas will observe what happens over the course of the coming week and make a decision at its next meeting.

Hotel booking and management platform RedDoorz has recorded a slight increase in the number of room cancellations, not just from those travelling from China but also those from other countries, like India, said its chief executive Amit Saberwal. RedDoorz is working with its partners to let customers from the affected countries change or cancel bookings without incurring cancellation fees.

Overall, hotels have stepped up their sanitation measures: Accor hotels Fairmont Singapore and Swissotel The Stamford have issued instructions on additional procedures such as cleaning and disinfection, and identifying and managing suspected cases. Accor did not comment on whether bookings have been impacted, but the hotels are offering guests with prepaid or guaranteed bookings for stays between now and Feb 8 the options to either push the booking to a later date or cancel it for a full refund.

Local restaurants have taken a smaller hit, with business falling about 10 per cent at Dian Xiao Er outlets. Managing director Samuel Yik said the restaurant chain has emphasised frequent hand-washing and wearing of masks, and implemented daily temperature taking.

Eldwin Chua, chief executive of Chinese restaurant chain Paradise Group, said business in Singapore has fallen about 20 per cent, compared to the 90 per cent fall in his China outlets.

Paradise Group has implemented cost-cutting measures in China, such as placing about half its staff on unpaid leave, but Mr Chua believes the situation in Singapore does not call for similar measures here yet.

Meanwhile, retailers that The Business Times spoke to, such as Mustafa, Decathlon Singapore and Bengawan Solo, said they have felt minimal impact so far and are mainly following precautions advised by the government. Damien Tan, chief operating officer of lifestyle and menswear brand Benjamin Barker, said he expects sales to slow when Singaporeans start avoiding crowded places like malls.

Lifestyle brand Iuiga logged more online orders when its stores closed for the holiday weekend. Its chief growth officer Jaslyn Chan said if mall footfall continues falling, there could be opportunities to develop new products and services for those who shop from home.

Other companies on the alert for new developments include those in the cleaning industry, like environmental services firm Chye Thiam Maintenance.

One of two companies licensed by the National Environment Agency to carry out disinfection work, it has been on standby for the past two weeks and has followed the government's advice on measures like having workers go on leave of absence after returning from China.

To prepare for an escalation, its employees have been reviewing internal procedures and various alert levels and preparing their personal protective equipment in case they are activated. The company said it is prepared for the outbreak and response to last a few months.