Amidst the growing pandemic of the Wuhan virus, airlines around the world have begun suspending flights to China.
Economic impacts of the coronavirus outbreak will be most obvious for air travel and tourism. However, other sectors could see negative impacts too.
Based on research published by Maybank Kim Eng analysts, reports say Singapore’s economy will be one of the hardest hit among ASEAN countries, along with Thailand.
Just in terms of tourists, China has become the largest source of visitors to Singapore in recent years.
According to data from the Singapore Tourism Board, more than 3.3 million tourists from mainland China travelled to Singapore between January and November 2019.
Their spending on attractions, dining, shopping and luxury goods also contribute significantly to tourism receipts.
With travel restrictions in place to curb the spread of the virus, we will expect drastically fewer tourists from China during this period.
In turn, businesses that will see a big dip in customers include hotels, airlines, airports, restaurants, retail outlets and land transport providers.
Compared to the 2003 Sars (severe acute respiratory syndrome) epidemic, experts believe the Wuhan virus crisis could have bigger impacts, since China’s economy has grown tremendously and Asian markets are now more reliant on their consumers.
Maybank’s report stated that retail and F&B sales dropped for two consecutive quarters during the Sars outbreak, and this could be similar in our current situation.
However, consumers have made major shifts toward ecommerce since 2003, so lower retail footfall may not hurt businesses as much if they have an online presence.
Still, mall operators will inevitably be affected. Singapore-based commercial property developers like CapitaLand and Dasin Retail Trust have started to close or shorten opening hours of their malls in China.
Government Measures To Help
The Ministry of Trade and Industry said on Monday (27 January) that it will develop and roll out some measures to help firms affected by the Wuhan virus.
Currently, the Ministry of Manpower is providing financial help to Singaporean workers who have to be quarantined after returning from China.
Self-employed people will receive S$100 for each day of their quarantine. For salaried workers, the money goes to their employers instead, as the quarantine period does not come from annual leave.
On 31 January 2020, National Development Minister Lawrence Wong also said the Government is studying how to best support the hospitality, tourism, retail and F&B sectors.
With Budget 2020 to be delivered on 18 February, some measures might possibly be revealed then.
Featured Image Credit: SGTalk