COVID-19 Update: SSP to take big hit from health crisis; ProWein, Basel, PATA and Vinexpo events hit
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For updates from 9 March onwards click here.

Japan

Japan today introduced additional measures to prevent the spread of COVID-19, including new restrictions on inbound travel from China and South Korea.

The Ministry of Foreign Affairs issued a notice saying that entry visas issued up to 8 March by Japanese embassies or consulates in both countries would be suspended from 9 March. In addition, visa exemptions for the Hong Kong and Macau Special Administrative Regions are also suspended from the same date.

The move will effectively stop the flow of visitors from China and South Korea to Japan, though the Ministry has not invalidated visas of those who have already travelled. The Ministry said the measures would last at least until the end of March and will invalidate around 3 million recently issued visas, according to Japanese media.

China and South Korea account for around half of all tourists to Japan (just under 6 million combined in 2018) and the move will have a severe impact on a travel retail sector already reeling from the crisis. Chinese visitors are the driver of recent growth in Japanese travel retail, accounting for 60-70% of turnover in airport duty free and around 90% in downtown duty free.

Germany

Lufthansa Group is to cut its flight capacity by up to -50% in coming weeks and may take its fleet of Airbus A380s out of service due to the spread of COVID-19. The company cited the “exceptional circumstances” caused by the outbreak, including many flight cancellations, saying it has decided to “reduce the flight capacity on offer even more than previously planned”. The changes will apply to all airlines in the group.

The company said: “Depending on the further development of demand, capacity is to be reduced by up to -50% in the coming weeks. In addition, the extent to which the entire Airbus A380 fleet (14 aircraft) can be temporarily taken out of service in Frankfurt and Munich is currently being examined.”

Lufthansa said that it is not yet possible to estimate the impact on earnings due to the crisis. It has implemented cost saving measures around personnel, material costs and project budgets.

Alongside a hiring freeze, like many other airlines, it has offered staff unpaid leave and the chance to bring forward annual leave. The company will announce its annual results on 19 March.

South Korea

Interesting and encouraging numbers out of South Korea. The country recorded 248 confirmed new cases over the past 24 hours, compared with 367, 483 and 518, respectively, over the previous three days. Source: Korea Centers for Disease Control and Prevention. Click to enlarge.

Has South Korea reached a turning point in the COVID-19 crisis? Latest figures from the Korea Centers for Disease Control and Prevention (KCDC) offer encouragement. The KCDC said that the number of new cases (248, see chart above) was also below the average daily increase of 500 last week, and the lowest number since 26 February.

The English-language version of The Korea Times website underlines the cautious optimism emerging in South Korea

According to a Reuters report today, South Korean officials have warned against prematurely calling the peak of the outbreak while expressing cautious optimism.

“I’m still extremely cautious, but there’s hope we can reach a turning point in the near future,” Prime Minister Chung Sye-kyun said on Monday from the hard-hit southeastern city of Daegu, Reuters reported.

This bar chart will be one of the most closely watched in travel retail over coming days, particulary by Korean duty free operators, beauty houses and daigou traders. Source: Korea Centers for Disease Control and Prevention. Click to enlarge.

The South Korean situation is critical to the fortunes of the travel retail sector. The daigou market (Chinese professional shoppers buying duty free goods for resale in China) has been the locomotive of Asian travel retail in recent years, particularly for the boom beauty sector. Because the daigou sector is demand-driven (i.e. from Mainland China) rather than tourism-orientated like most duty free shopping, it is likely to recover quickly – and strongly – if travel to South Korea (the country that offers daigou traders the best price savings over China domestic) is considered relatively safe.

Most daigous buy in Seoul. Note from the chart below that only 130 of the country’s 7,382 cases have been recorded in the Korean capital. In contrast, some 75% of cases have been notified in Daegu, the southeastern city that is home to the cult-like Shincheonji Church.

“More than 79 percent of COVID-19 cases were found to be related to mass infection, and among them, 62.5 percent were linked to the Shincheonji Church,” KCDC Director Jung Eun-kyong said at a daily press briefing, The Korea Times reported.

Chinese demand for beauty and other products bought in Korean duty free has not declined during the crisis. Conversely, it has soared due to the comparative lack of supply. If the Korean COVID-19 numbers continue to tumble, a rare bright light amid this crisis may be switched on.

Source: Korea Centers for Disease Control and Prevention. Click to enlarge.

International

The COVID-19 toll mounts. The China-focused heatspot of a few weeks has now been replicated all around the world. Source: John Hopkins University (click on the image to enlarge and on this link to see the regularly updated full country-by-country count.)

China

Under control? Confirmed new case numbers reach a new low in China. Hubei Province, home to the epicentre of Wuhan, is also seeing the crisis ease. Will the Chinese timeline be repeated internationally? Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

Saudi Arabia

In an attempt to minimise the COVID-19 outbreak, the Saudi government has this weekend introduced sweeping travel restrictions regarding departures to and arrivals from seven Middle East countries, Italy and South Korea.

The General Authority of Civil Aviation of Saudi Arabia (GACA) announced that with immediate effect Saudi citizens and others living in the Kingdom are prohibited from travelling to the UAE, Kuwait, Bahrain, Lebanon, Egypt, Syria, Iraq, Italy and South Korea. Additionally, passengers from any of those countries – or who have visited any of them in the past 14 days – are prohibited from entering the Kingdom. For full story, click here.

International

Summary of key developments over the past 24 hours

The COVID-19 crisis continues to escalate globally while steadily being brought under control in China, where just 44 confirmed new cases were reported yesterday, down from 573 a week earlier. Only three of the new cases were outside Hubei Province.

Confirmed new case numbers plummet in China. Even the situation in Hubei Province, home to the epicentre of Wuhan, is seeing a notable improvement. Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

As of 06.53 GMT 106,165 cases had been reported globally, leading to 3,594 deaths. The tally continues to soar in South Korea, Italy and Iran with rapid rises in France, Germany and several other countries including the US.

Italian Prime Minister Giuseppe Conte signed a decree early today which places most of northern Italy under lockdown due to the escalating crisis – the toughest quarantine measure taken outside of Mainland China. The entire Lombardy region is included as well as 14 other northern and central provinces.

Anybody living in Lombardy and the other provinces requires permission to enter or leave. Milan and Venice (the latter home of T Fondaco dei Tedeschi by DFS) are both affected. Schools, ski resorts, musuems, gyms and pools will be closed and all events in “public and private spaces” suspended, Conte said.

DFS has complied with a government request to close stores in the ‘red zone’, which includes Venice, on Saturday and Sunday, a spokesperson confirmed to The Moodie Davitt Report.

The COVID-19 outbreak continues to escalate around the world. In Italy the toll has risen by +52% in two days. Source: John Hopkins University (click on the image to enlarge and on this link to see the regularly updated full country-by-country count.)

US

Seatrade Cruise Global said on Friday that with just six weeks to go before its Seatrade Cruise Global event – a key date in the cruise calendar – it is moving forward with plans to host activities as scheduled on 20-23 April in Miami.

In a statement, the organisers said: “We are in communication with state and local officials and the Miami Beach Convention Center, and, at this point, there are no plans to cancel any shows at the facility due to coronavirus. The Miami Beach Convention Center and Seatrade Cruise Global are taking precautionary measures inside the venue while the state and local agencies are taking steps to limit the spread of respiratory viruses.

“We have spoken with many of our partner associations, exhibitors, and cruise lines and the overwhelming feeling is of support and that the event should, if it’s able to, go ahead at this crucial time for the industry. We want to assure you that the health and safety of our attendees is our top priority, and we will continue to monitor and follow the guidance of the leading health authorities.”

US

The Centers of Disease Control (CDC) has confirmed 21 people on the Grand Princess cruise ship have tested positive for COVID-19.

All guests and crew on the ship, which is currently off the coast of California, will remain isolated in their rooms. Princess Cruises will follow the guidance of the CDC to determine next steps and if additional precautionary measures need to be taken.

International

The COVID-19 confirmed cases toll races past 100,000 worldwide. In Italy the toll has risen by 778 in a single day. Source: John Hopkins University (click to enlarge)

South Korea

South Korea recorded 518 new infections compared to just 143 in Mainland China; Source: Korea Centers for Disease Control and Prevention. Click to enlarge

China

While the COVID-19 epicentre of Hubei Province (mostly Wuhan) continues to see three-figure daily new infections, elsewhere in Mainland China the toll remains light. Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

International

The United Nation’s World Tourism Organization (UNWTO) has called for financial and political support for the tourism sector.

The organisation has estimated international tourist arrivals will be down by between -1% and -3%, translating into an estimated loss of US$30 billion to US$50 billion this year. This first assessment expects that Asia Pacific will be the worst0affected region, with an anticipated fall in arrivals of -9% to -12%.

The UNWTO said that political and financial commitments are necessary to ensure that tourism can lead the wider economic and social recovery from the COVID-19 outbreak.

International

The number of new confirmed daily cases outside of Mainland China, Hong Kong and Macau dropped slightly yesterday, according to the World Health Organization (WHO).

According to the WHO’s daily situation report, 2,098 new cases were confirmed outside of China on 5 March, a slight drop on the 2,103 recorded on 4 March.

This comes after the number of new daily cases outside of China had accelerated in recent days.

The number of new daily cases reported in Mainland China, Hong Kong and Macau (in orange) and the rest of the world (in blue) since the beginning of February, according to the Daily Situation Reports from the WHO (click to enlarge)

US

The California Air National Guard has airdropped test kits for COVID-19 onto a cruise ship off the coast of California.

There are no confirmed cases of COVID-19 among the 3,533 people onboard the Grand Princess cruise ship, but some guests have shown influenza-like symptoms, Princess Cruises said in a statement.

#GrandPrincess Update: We can confirm that while there are no confirmed cases of COVID-19 currently on board, the @CDCgov has identified groups of guests and crew who will be tested before arrival into San Francisco.

— Princess Cruises (@PrincessCruises) March 5, 2020

Samples of 45 people – a mix of crew and guests – have now been delivered to the California Department of Public Health and the results are expected today.

In the meantime, all passengers on the cruise ship have been asked to stay in their rooms where they are receiving meal deliveries. Princess Cruises added that guests have been provided with additional television options and complimentary internet.

The upcoming Grand Princess Hawaii cruise set to depart on 7 March has been cancelled.

International

The latest scale of the outbreak globally at 8.33am (GMT) on 6 March, according to John Hopkins University (click to enlarge)

Singapore

The global duty free industry has applauded the Tax Free World Association’s (TFWA) decision to cancel the TFWA Asia Pacific Exhibition & Conference.

DFS Singapore Venture Regional Merchandise Manager Patricia Sim said: “It’s sad for the travel retail industry players, but for the safety of everyone, this is understandable. Travel retail will come out of this stronger.”

For more reaction, click here

Germany

The World Travel Catering & Onboard Services Expo (WTCE), which was set to take place in Hamburg from 30 March to 2 April, is the latest major travel event to be postponed amid the COVID-19 outbreak. The event attracts many airline and their service providers, and was due to run alongside the Aircraft Interiors Expo and Passenger Experience Conference at the same venue, Hamburg Messe. Organiser Reed Exhibitions said today that all three events will move to alternative dates.

Reed Exhibitions Portfolio Director Katie Murphy said: “The health and safety of our exhibitors, visitors and staff is our priority. In close coordination with all partners involved, we will promptly announce an alternative date for the events.

“We have been closely monitoring the situation and notices issued by the World Health Organisation (WHO), as well as the German Federal Government and Hamburg local authorities. While it is disappointing to postpone the events, given the ongoing developments related to COVID-19, we believe it is the best course of action for all involved.

“This is not a decision we have taken lightly. We trust that postponing the events will provide the international passenger experience industry the opportunity to achieve their business objectives later in the year and we are working to have confirmed dates as soon as possible.”

France/Singapore

The Tax Free World Association (TFWA) has taken the seemingly inevitable and appropriate decision to cancel the upcoming TFWA Asia Pacific Exhibition & Conference due to the escalating COVID-19 outbreak.

The decision to call off the event, due to take place at the Marina Bay Sands Expo & Convention Centre 10-14 May, was made by TFWA Board & Management Committee members today.

Read the full story here

Europe

A report by travel analytics company ForwardKeys, commissioned by European Cities Marketing (ECM), has underlined the scale of booking cancellations to Italy and Europe from overseas markets amid the outbreak of COVID-19.

How travel bookings to Europe tracked from 20 January to 29 February; click to enlarge (Source: ForwardKeys)

After China imposed restrictions on outbound travel, in the week of 20 January, until 22 February, when the outbreak of COVID19 cases in northern Italy began, bookings to Europe from intercontinental source markets had decreased by -23.7%. However, in the final week of February, after the first deaths were reported in Italy, the number of new bookings to that country was outpaced by the cancellation of existing bookings, with overall bookings down by -138.7%. The impact on travel was not confined to Italy; the number of new flight bookings to Europe fell by -79% in the same week.

ForwardKeys’ analysis of Europe’s various source markets shows a double-digit decline in bookings in the final week of February from every major region of the world.

Bookings from the Asia Pacific region fell by -114.2% (cancellations exceeding new bookings), followed by the Americas which fell by -68.1% and Africa & the Middle East, which fell by -49.9%.

Visitor arrivals in Europe have shown a two-phased decline as a consequence of the COVID19 crisis, said the analyst.

“Initially, intercontinental visits to Europe tracked collectively +1.3% above 2019 levels in the period from the start of the year to 28 January. The first phase of decline in Europe began on 29 January, nine days after the beginning of the crisis in China, when European destinations started to suffer, and arrivals decreased by -17.6% from 29 January to 23 February.

“Phase two began with the sharp slump in visits which happened in tandem with the explosion of COVID-19 cases in northern Italy. In Phase two, arrivals in Europe collapsed by -25.9% between 24 and 29 February alone, leaving the year to date results -10.5% below the same period last year.

Variations in year-on-year bookings from around the world measured by region and sub-region; click to enlarge (Source: ForwardKeys)

International

The International Air Transport Association (IATA) has updated its analysis of the financial impact of the COVID-19 crisis – painting a stark picture of the outbreak’s impact on the global air transport industry – and called for urgent relief measures.

The association said it estimates 2020 revenue losses for the global aviation sector will be US$63 billion in a scenario where COVID-19 is contained to the current markets and US$113 billion if it spreads more broadly.

Read the full story here

France/Singapore

TFWA will today make a decision on the fate of the TFWA Asia Pacific show in Singapore, due to be held on 10-14 May. The Board and Management Committee had been due to meet in Barcelona but the spiralling COVID-19 outbreak in Spain and elsewhere prompted the association to convene the gathering from its Paris headquarters with Board and Management Committee members able to attend in person or via conference call.

As with all event organisers (including The Moodie Davitt Report, which was forced to postpone its Airport Food & Beverage Conference & Awards in Istanbul from June until September), TFWA finds itself in an invidious position in weighing up the options of deferring a decision, postponing or cancelling. As revealed by The Moodie Davitt Report, The 2020 Duty Free & Travel Retail Summit of the Americas, due to be held on 30 March-2 April in Orlando, was cancelled earlier this week due to COVID-19.

Four Asian nations or zones (Mainland China, South Korea, Japan and Singapore) are among the ten most-affected countries with several others in the top 20 (Hong Kong, China; Malaysia, Thailand and Taiwan), according to this morning’s figures from John Hopkins University.

With less than nine weeks to go before the show and little likelihood of the crisis easing in the near-term, allied to current supplier and buyer reluctance to travel (sometimes prohibited by their companies) and a widespread wish to defer investment to a hoped-for second-half recovery, it seems likely that caution will prevail.

China

Outside the COVID-19 epicentre of Hubei Province (mostly Wuhan), the situation in Mainland China appears increasingly under control. Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

International

As of 09.43 GMT, 95,748 confirmed COVID-19 cases had been recorded worldwide. The overwhelming majority have been in Mainland China (84%, down from 86.2% yesterday), followed by South Korea (6.4%, up from 5.7%), Italy (3.2%, up from 2.7%) and Iran (3.1%, rising from 2.5%). Japanese cases surged nearly +13% yesterday. Source: John Hopkins University (click to enlarge). Follow this link for full ranking of all affected countries and zones.

Japan

Chinese President Xi Jinping has postponed a much-anticipated state visit to Japan amid an escalating COVID-19 count in China’s near neighbour.

Italy

Italy has shut all schools and universities from today for ten days as it strives to contain an escalating COVID-19 outbreak.

According to latest figures from John Hopkins University, 3089 people have been infected with the disease in Italy – the third-highest tally in the world behind Mainland China (80,410) and South Korea (5,766).

Asia Pacific

GlobalData has dramatically revised its sales estimate for the Asia Pacific duty free market in 2020.

The analytics company had originally predicted sales for the year in the region of US$43.4 billion, but is now predicting annual sales will be -19.1% lower at US$35.2 billion. It is expected US$5.5 billion will be lost from the South Korean forecast and US$1.5 billion from China.




GlobalData Retail Analyst Suresh Sunkara added: “The forecasts may change further during the course of time if the virus spread is prolonged to the second half of 2020, or if it spreads to other key duty-free markets in the region including India, Malaysia and Australia, which are currently not significantly affected by the spread.”

International

The International Wines & Spirits Record (IWSR) is to release an IWSR Coronavirus Risk Assessment Model in the second quarter of the year. The tool will quantify and forecast the impact of major global events and give industry leaders data-driven insights and situational forecasts.

IWSR CEO Mark Meek said: “In this rapidly-evolving situation, the IWSR Coronavirus Risk Assessment Model will give industry leaders the clarity needed to confidently respond to a serious event with global implications.

“Early reports indicate that the revenue and profit impact to the [global drinks] industry will be in the billions of dollars. Initial signs are that global travel retail and on-premise sales in China have suffered a severe downturn, and that other affected regions, such as Northern Italy and South Korea, are starting to see a similar impact.”

The model will initially cover global travel retail, China, South Korea and Italy, with other key markets to be added if required.

Germany

The flag carrier and largest airline in Germany, Lufthansa, is temporarily taking 150 aircraft, estimated to be one-sixth of its total fleet, out of operation. A spokesperson for the airline said this was a reaction to “the declining demand in air travel caused by the coronavirus”.

Thailand

Asia AIR Convention, a major aviation exhibition due to be held in Bangkok on 21-23 April, has been postponed until 9-11 June 2020, due to the COVID-19 outbreak. The three-day event, which was expected to attract over 1,000 attendees, will be relocated from InterContinental Bangkok to Shangri-La Hotel.

The organisers said: “Over a span of the past few months, the AIR Convention team has been closely monitoring how things unfold with the coronavirus, which is causing disruption in Asia and beyond. As the health and well-being of our attendees have always been our main priority, we followed the guidelines and safety measures suggested by government authorities and the World Health Organization.”

Japan

Japan’s two biggest airline groups today announced a further wave of cuts to flight schedules, centred around their domestic operations, due to the COVID-19 outbreak.

Japan Airlines (part of JAL Group) said that for the period from 6 to 12 March, 352 flights have been cut, most of them from/to Tokyo Haneda. ANA Group has also suspended hundreds of flights from Haneda as well as Fukuoka, Osaka Itami and Chubu (Nagoya).

JAL Group said: “In an aim to contain the further outbreak of the coronavirus, various sporting and cultural events have been suspended in Japan and travel demand on the domestic network has decreased. As such, the company announced the decision to temporarily reduce services between March 6 and March 12, 2020. We sincerely apologise for any inconvenience but would like to ask for understanding during this unprecedented time. The company will continue to monitor and implement effective measures to provide our customers peace of mind when travelling on flights operated by the JAL Group.”

Last month JAL sharply cut back on its international flights to mainland China; the number of scheduled flights was reduced from 98 to 43 per week between 17 February and 28 March 28.

ANA has also suspended most of its Chinese flights until 28 March from Narita, Haneda and Kansai airports.

International

As of 09.33 GMT, 93,160 confirmed COVID-19 cases had been recorded worldwide. The overwhelming majority have been in Mainland China (86.2%), followed by South Korea (5.7%), Italy (2.7%) and Iran (2.5%). Source: John Hopkins University (click to enlarge). Follow this link for full ranking of all affected countries and zones.

Source: John Hopkins University; Moodie Davitt Business Intelligence Unit (Click to enlarge)

South Korea

Source: Korea Centers for Disease Control and Prevention. Click to enlarge

The number of new confirmed cases in South Korea, home to the world’s biggest duty free market, drops day-on-day from 600 to 516 (compared to 119 in Mainland China) but no consistent downwards trend has yet been reached.

China

More cause for optimism as confirmed cases in Mainland China continue to fall. Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

US

The 2020 Duty Free & Travel Retail Summit of the Americas, due to be held on 30 March-2 April in Orlando, has been cancelled due to the escalating COVID-19 outbreak.

International Association of Airport Duty Free Stores (IAADFS) President & CEO Michael Payne told The Moodie Davitt Report: “It’s simply the right thing to do. So many things have changed since you and I last spoke [on 13 February, when the show was still set to take place as scheduled. We’ve been angsting over it a bit but things [with the health crisis] have moved really fast over the past few days].”

Read the full story here

Key trade shows to have been cancelled or postponed due to COVID-19

03 March: The 2020 Duty Free & Travel Retail Summit of the Americas, due to be held on 30 March-2 April in Orlando, is cancelled.

02 March: Vinexpo Hong Kong, one of the largest gatherings for the wines & spirits industry in Asia Pacific, has been postponed. The event had been due to take place at the Hong Kong Convention & Exhibition Centre (HKCEC) 26-28 May. It will now take place at the same location 8-10 July.

02 March: The PATA Annual Summit 2020, due to be held in Ras Al Khaimah, UAE on 31 March 31-3 April has been cancelled due to the health crisis. The 2021 event will be held in the same location instead.

29 February: ProWein 2020, due to be held in Düsseldorf on 15-17 March, is postponed to an unconfirmed date. 

28 February: The Airport Food & Beverage (FAB) Conference and Awards, due to take place on 23-24 June in Istanbul, is postponed to 2-3 September in the same city.

28 February: ITB Berlin, one of the world’s largest annual travel trade shows is cancelled.

28 February: Baselworld, the leading international watch and jewellery event, is postponed from 30 April-5 May 2020 until 28 January-2 February 2021.

28 February: The 15th ACI Asia-Pacific Regional Assembly, Conference & Exhibition scheduled for 21-23 April 2020 in Nara, Japan, is postponed. A new date will be decided in due course.

12 February: The Mobile World Congress, the world’s largest mobile phone trade fair, due to be held in Barcelona on 24-27 February, is cancelled.

Source: Moodie Davitt Business Intelligence Unit

Austria

Announcing its results for 2019, Vienna Airport has said there is “high uncertainty” on how much COVID-19 will impact its 2020 performance.

The airport operator has forecasted revenue of at least €870 million (US$961 million) and net profit of at least €180 million (US$198.5 million) for the year and Flughafen Wien (Vienna Airport) Management Board Member Günther Ofner said this “still seems achievable”.

“A better assessment will be possible in four to six weeks,” he added. “A cost-cutting package to safeguard earnings will be introduced nevertheless. From a historic point of view, such external shocks have only resulted in a temporary reduction of growth.”

Read the full story here

International

The latest data from flight analyser OAG shows that global scheduled airline seat capacity from January to April has fallen by 40.8 million compared to the same period last year.

Against this backdrop, some varying regional trends are emerging as the COVID-19 crisis reaches its seventh week.

Chinese carriers have added 2.9 million scheduled seats (18,200 flights) back into the mainland’s domestic market, positive news from an industry viewpoint. On the other hand, capacity to and from South Korea and Hong Kong continues to decline. In Europe, capacity has fallen in northern Italy but airlines are continuing to adjust their schedules, so this trend may yet accelerate.

Global seat capacity from January to April versus 2019 figures; click to enlarge (Source: OAG)

Of the 2.9 million scheduled seats returning to the Chinese market (week commencing 2 March), all but 3,000 are on domestic services, led by China Southern Airlines and China Eastern. OAG said that the dramatic capacity recovery has led to low fares being made available as the Chinese government seeks to ensure people can return home after the extended Lunar New Year break.

Against this, South Korea has seen a -21% reduction in capacity and Hong Kong (SAR) a -22% slide; since 20 January, capacity has fallen by -71% in the Hong Kong market alone.

Capacity shifts in key northeast Asian markets (click to enlarge)

OAG noted that Japan has been partially insulated by its strong domestic market. ANA’s capacity is down by -2.7% since 20 January and JAL by -5.3% with minimal change in the last week. However, it said, for Cathay Pacific, Korean Air, Asiana and Eva Airways further capacity cuts of more than -20% in the last week reflect the severity of the situation being faced on a regional basis.

In southeast Asia, the potential impact of COVID-19 on Indonesia – which reported its first case this week – has yet to be played out. Lion Air, Citilink Indonesia and Batik Air all added capacity in the last seven weeks. Elsewhere, Singapore Airlines cut capacity by another -5% this week, and by -12.5% since 20 January.

Commenting on Europe, OAG said: “The recently announced outbreak in Northern Italy does not appear to have impacted total capacity at a country level although airlines are still adjusting schedules and re-accommodating passengers from some cancelled services before removing flights from their systems. Some airlines have sought to add capacity to existing routes across their networks taking advantage of expected increases in demand over the approaching Easter holiday period.

“Looking specifically at capacity from Milan this week shows a reduction of some 25,500 seats across the four major airports with represents a -5% reduction in capacity.”

International

As of 9.43 GMT, 91,311 confirmed COVID-19 cases had been recorded worldwide. The overwhelming majority have been in Mainland China (87.8%), followed by South Korea (5.7%), Italy (2.2%) and Iran (1.6%). 74 countries have confirmed cases but only ten (plus Hong Kong, China, counted separately from the Mainland) have experienced 100 or more. Source: John Hopkins University (click to enlarge)

South Korea

The number of new confirmed cases in South Korea continues to outpace Mainland China. 600 new cases were reported over the last 24 hours (down from 595 the day before), compared with 125 in Mainland China.

International

The Organisation for Economic Co-Operation & Development (OECD) has revised its outlook for global economic growth for 2020.

In its Interim Economic Outlook, the organisation projects that in a best-case scenario global growth will slow to +2.4% for the year, 0.5 percentage points lower than the +2.9% it forecasted for this year in November 2019, as a result of the coronavirus.

New growth projections for 2020 across the world compared to both 2019 and the projections for 2020 made in November 2019 (Click to enlarge)

In the event of broader contagion across the Asia Pacific region and advanced economies, global growth could slow to +1.5%, just over half the OECD’s initial estimate.

OECD Chief Economist Laurence Boone said: “The virus risks giving a further blow to a global economy that was already weakened by trade and political tensions. Governments need to act immediately to contain the epidemic, support the health care system, protect people, shore up demand and provide a financial lifeline to households and businesses that are most affected.”

The outlook also called for governments to introduce tax and budgetary measures to cushion the impact of the outbreak on those industries worst affected, including the travel and tourism sector.

China (Hong Kong)

The total number of visitor arrivals in Hong Kong fell -52.7% year-on-year in January to 3,207,802. Visitors from Mainland China were down -54.2% compared to January 2019 at 2,536,768 and non-Mainland visitors dropped -46% year-on-year at 671,034.

A detailed breakdown of arrivals in Hong Kong for January (Click to enlarge)

China

More encouraging news from China as the tally of new confirmed cases continues to tumble. Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

UK

British Airways has told The Moodie Davitt Report it is reducing its transatlantic and European service from 16-28 March in the wake of reduced demand.

The UK flag carrier confirmed it was cancelling 12 roundtrips from Heathrow to John F. Kennedy International Airport between 17-28 March. The airline has also cancelled 194 short-haul roundtrips from London’s airports to Europe in the second half of March; 171 of these are from Heathrow Airport.

The airline said customers on cancelled services will be offered the option to receive a full refund, rebook to a later date or rebook on other carriers if possible.

Many of the flights cancelled by British Airways are from Terminal 5 of Heathrow Airport

News agency Reuters has produced a regularly-updated guide to airlines that have suspended or cancelled flights as a result of the coronavirus outbreak.

International

One of the world’s leading airport food & beverage operators, SSP Group, has warned COVID-19 will have reduced overall group revenue for February by between £10 million (US$12.58 million) and £12 million ($15.1 million).

The company added that operating profit for the month was likely to be reduced by between £4 million (US$5.03 million) and £5 million (US$6.29 million).

Read the full story here

International

The International Air Transport Association (IATA) has urged aviation regulators worldwide to suspend the rules governing use of airport slots for the 2020 season, due to the impact of COVID-19.

Around 43% of all passengers depart from over 200 slot coordinated airports worldwide, said IATA. The rules mean that airlines must operate at least 80% of their allocated slots under normal circumstances. Failure to comply with this means the airline loses its right to the slot the next equivalent season. In exceptional circumstances, regulators can relax this requirement.

IATA said: “The COVID-19 crisis has had a severe impact on air traffic.  Airlines are experiencing serious declines in demand including:

  • A carrier experiencing a -26% reduction across their entire operation in comparison to last year
  • A hub carrier reporting bookings to Italy down -108% as bookings collapse to zero and refunds grow
  • Many carriers reporting -50% no-shows across several markets
  • Future bookings are softening and carriers are reacting with measures such as crew being given unpaid leave, freezing of pay increases, and plans for aircraft to be grounded.

“Given these extraordinary circumstances as a result of the public health emergency, the collective view of the airline industry is that the application the 80% rule during the upcoming season inappropriate. Flexibility is needed for airlines to adjust their schedules according to extraordinary demand developments.”

Regulators have already been waiving the slot rules on a rolling basis during the COVID-19 crisis primarily for operations to China and Hong Kong SAR. Not that the outbreak has spread worldwide, IATA said that without certainty about these waivers for the summer season (or winter season in the Southern hemisphere), airlines will be unable to plan ahead sufficiently to ensure efficient rostering of crew or deployment of aircraft.

“IATA research has shown that traffic has collapsed on key Asian routes and that this is rippling throughout the air transport network globally, even between countries without major outbreaks of COVID-19. There are precedents for previous suspension of the slot use rules and we believe the circumstances again calls for a suspension to be granted. We are calling for regulators worldwide to help the industry plan for today’s emergency, and the future recovery of the network, by suspending the slot use rules on a temporary basis,“ said Alexandre de Juniac, IATA’s Director General and CEO.

“The world is facing a huge challenge to prevent the spread of COVID-19 while enabling the global economy to continue functioning. Airlines are on the front line of that challenge and it’s essential that the regulatory community work with us to ensure airlines are able to operate in the most sustainable manner, both economically and environmentally, to alleviate the worst impacts of the crisis,” he said.

China (Hong Kong)

Vinexpo Hong Kong, one of the largest gatherings for the wines & spirits industry in Asia Pacific, is the latest trade show to be postponed.

The event had been due to take place at the Hong Kong Convention & Exhibition Centre (HKCEC) 26-28 May. It will now take place at the same location 8-10 July.

The event organisers said it was clear the event should be rescheduled but still take place as early as possible in 2020 to both mitigate health risks and allow for meetings to take place at the earliest opportunity.

“We are pleased to serve such a close-knit community that was able to tell us exactly what they need as an industry,” Vinexpo CEO Rodolphe Lameyse said. “We are doing everything in our power to make the rescheduled Vinexpo Hong Kong 2020 a must-attend event in Asia Pacific.”

Thailand

King Power Srivaree Complex in Bangkok, one of the retailer’s two downtown stores in the Thai capital, remains closed due to the COVID-19 outbreak and a related slump in Chinese tour group traffic.

The King Power Srivaree Complex usually enjoys strong trade with Chinese group tourists. That market has collapsed as the health crisis has escalated.

The store was temporarily closed on 6 February after a product consultant for a supplier to the store tested positive for COVID-19. The 35-year-old man died on Saturday, though local media have reported doubts over the cause of his death. Doctors had detected no coronavirus in his body since 16 February, Disease Control Department chief Suwannachai Wattanayingcharoenchai said on Sunday, according to the Bangkok Post. The man had initially been diagnosed with dengue fever in late January, before later also testing positive for COVID-19.

Upon that second diagnosis, all store employees went through stringent medical checks and the store underwent a comprehensive cleaning. It was then closed due to a related collapse in group tourism – its key customer base.

King Power said in a statement on its Facebook page (see below) that it is following strict health and safety guidelines in its stores and adhering to Ministry of Health guidelines. “The company is deeply concerned and underlines its commitment to provide maximum protection for the safety of customers, partners and employees to best get through this COVID-19 crisis together,” it commented.

South Korea

The number of new confirmed cases in South Korea continues the recent pattern of outpacing Mainland China. 476 new cases were reported over the last 24 hours (down from 595 the day before), compared with 202 in Mainland China.

Source: Korea Centers for Disease Control and Prevention  (Click to enlarge)

UK

IAG, owner of British Airways, Iberia, Vueling and Aer Lingus, is the latest major airline group to warn about its business outlook as a result of COVID-19. It said that cancellations related to the outbreak would reduce flight capacity by 1-2% for the year.

The company said: “We are currently experiencing demand weakness on Asian and European routes and a weakening of business travel across our network resulting from the cancellation of industry events and corporate travel restrictions.”

BA and Iberia flights to Mainland China have been suspended since 29 January while services on other Asian routes has been reduced, including to and from Hong Kong since 13 February.

From 13 March, BA will reduce its daily service to Seoul to 3-4 times weekly, though some of this capacity will be redeployed on route with stronger demand, such as India, South Africa and the US, it said.

IAG added: “Capacity on Italian routes for March has been significantly reduced through a combination of cancellations and change of aircraft gauge and further capacity reductions will be activated over the coming days. We also expect to make some capacity reductions across our wider short-haul network.

“The net impact of current flight cancellations and redeployed capacity is to lower IAG’s FY2020 planned capacity by approximately 1-2% in terms of available seat kilometres for the year. Our operating companies will continue to take mitigating actions to better match supply to demand in line with the evolving situation. Cost and revenue initiatives are being implemented across the business. We are strongly positioned for the expected recovery in demand. Given the ongoing uncertainty on the potential impact and duration of COVID-19, it is not possible to give accurate profit guidance for FY2020 at this stage.”

Asia Pacific/Middle East

The latest big travel event to fall victim to the outbreak is the PATA Annual Summit, organised by influential tourism & travel body Pacific Asia Travel Association. It was due to have been held on 31 March to 3 April in in Ras Al Khaimah, UAE, but will now no longer take place. Ras Al Khaimah will instead host the 2021 event.

PATA CEO Dr. Mario Hardy said: “The safety and well-being of our members, industry colleagues and local communities is fundamental in our mission in acting as a catalyst for the responsible development of travel and tourism to, from and within the Asia Pacific region. With this in mind, we have come to this tremendously difficult decision.

“We are extremely disappointed in making this announcement; however, we have been closely monitoring this continually developing situation and believe that it was best that we made this decision in a clear and timely manner.”

International

The latest scale of the outbreak globally at 8.53am (GMT) on 2 March, according to John Hopkins University (click to enlarge)

China

In the Chinese mainland, health officials confirm 202 new COVID-19 infections and 42 more deaths as of 1 March. The number of those infected has reached 80,026 with 2,912 deaths. In Wuhan, centre of the outbreak, the number of new cases fell below 200 for the first time in 34 days, reports Global Times.

From today, we have included an extra line in our daily table assessing the outbreak’s trend in China. This shows the number of new confirmed cases outside Hubei Province, the epicenter of the outbreak. Today’s nationwide figure is down sharply on anything seen since the early days of the outbreak while again few new cases were recorded outside Hubei Province. Source: The National Health Commission of the People’s Republic of China (Click to enlarge)

International

The latest figures on the global COVID-19 outbreak from John Hopkins University as of this morning. Note that China still represents 91.8% of total confirmed cases.

And how things looked a week ago (click to enlarge)

South Korea

The COVID-19 outbreak continues to escalate in South Korea, home to the world’s biggest duty free market. Korea Centers for Disease Control and Prevention confirmed 595 additional cases this morning, bringing the tally to 3,526 with 3,479 cases in isolation.

We posted this graph on 27 February. A comparison between the two tables illustrates how quickly the outbreak has escalated in South Korea. (Click to enlarge)

The Korea Times reported today that Hotel Shilla, Hotel Lotte and other duty free retailers have so far been unsuccessful in persuading Incheon International Airport Corp (IIAC) to offer temporary concession fee relief amid the worsening COVID-19 crisis and plummeting passenger traffic and sales.

“The operator of Incheon International Airport, Korea’s main gateway, has refused the request, and instead suggested a reduction in business hours, prompting complaints from the companies at a time when several airports around the world including Singapore Changi Airport have already decided to lower rents imposed on duty free stores as part of support measures,” the report said.

The Korea Times said that the Korea Duty Free Shops Association (KDFA) plans to press again for relief, but notes that  the IIAC did not cut rents when the country was hit by the SARS outbreak in 2003 or MERS in 2015.

A duty free retailer told the media title that said reducing business hours was an “unrealistic” option as any such initiative would simply drive sales down further while rent continues to be paid as a fixed cost.

As reported, Deputy Prime Minister Hong Nam-ki last week unveiled a comprehensive support package for the economy worth more than KRW20 trillion (US$16.5 billion) – including the introduction of relief measures for small and medium sized airport duty free retailers. Larger retailers were not included in the programme.

No relief yet for hard-pressed duty free retailers at Incheon International Airport, The Korea Times reports

China

573 confirmed new COVID-19 infections and 35 new deaths were reported yesterday in Mainland China. 2,870 people have now died.

Hubei Province reported 570 new cases of COVID-19 with 34 new deaths. 2,761 deaths have been reported in the province, home to Wuhan, epicentre of the outbreak.

The latest figures from the National Health Commission of the People’s Republic of China represent the highest number of daily new confirmed cases in Mainland China yesterday since 22 February. However, that spike was entirely confined to Hubei Province (and mostly Wuhan, which recorded 565 of the new cases).

The daily figure of new confirmed cases outside Hubei Province actually reached a new low, underlining how the Chinese authorities are steadily getting the outbreak under control in most of the country. Click to enlarge the graph below.

Germany

ProWein 2020, due to be held in Düsseldorf on 15-17 March, has been postponed as a result of the worsening COVID-19 outbreak. Some 6,800 exhibitors from around the wines and spirits world had been expected to take part, representing all key winegrowing regions and almost 400 spirits producers.

Organisers Messe Düsseldorf said that all partners involved will promptly discuss an alternative date in order to guarantee that planning can reliably proceed.

“In doing so [postponing], we are following the recommendation of the crisis management team of the German government to take into account the principles of the Robert Koch Institute when making a risk assessment of major events. On the basis of this recommendation and the recent significant increase in the number of infected persons, including in Europe, Messe Düsseldorf has reassessed the situation,” the organisation said. “Added to this is the uncertainty of numerous exhibitors and visitors at ProWein and the complicated travel situation, especially for international customers.”

Messe Düsseldorf CEO Werner M. Dornscheidt said: “Our customers, partners and employees trust us. Not only when it comes to the professional and successful handling of major international events in Düsseldorf. They can also have this trust in us when we make decisions about critical situations in the interests of their safety.”

“This decision was not an easy one for all concerned,” said Thomas Geisel, Lord Mayor of the City of Düsseldorf and Chairman of the Supervisory Board of Messe Düsseldorf. “But the postponement at the present time is necessary for Messe Düsseldorf and its customers in view of the increasingly dynamic developments.”

Switzerland

Baselworld, the leading international watch and jewellery event, has been postponed from its original 30 April-5 May dates until 28 January-2 February 2021 because of the COVID-19 crisis.

In a statement, Baselworld said: “For health safety reasons and in accordance with the precautionary principle following the bans of large-scale public and private events issued today by the Swiss federal and cantonal authorities, Baselworld announces that it has taken the decision to postpone the show… due to concerns related to Covid-19.

Time to postpone: COVID-19 stops the 2020 edition of the world’s leading watches and jewellery event

“Baselworld… has taken this difficult decision in close consultation with its partners and the health authorities in charge, in whom Baselworld has full confidence for their expertise and recommendations for the benefit of exhibitors, visitors and collaborators. Following today’s official ban on large public gatherings which meant direct repercussions for the show, Baselworld had no other option than to make a decision as all preparations, in particular, construction in the halls and of the stands was scheduled to commence next week (start March).

Baselworld Managing Director Michel Loris-Melikoff said: “We deeply regret having had to postpone the event as planned due to the coronavirus, in full consideration of the needs of the watch and jewellery industry to be able to benefit from the platform to develop their business.

“This decision has been all the more difficult in view of all the positives that have been achieved through listening and dialogue over the last few months, which resulted in new concepts and new solutions, that have attracted exhibitors to return and new ones to sign on. We registered encouraging growth in all sectors; watchmaking, jewellery, the gemstone and pearl trade, as well as in the technical branch.

“By postponing the show to January 2021, we have found a solution that enables the industry and all our customers to avoid losing a full year and at the same time reset their calendars for the beginning of the year, a period that is conductive to the presentation of their new products, new trends and order taking. This postponing will also allow Baselworld to continue developing and bringing new formats and solutions as well as improvements to the new concept we propose.”

Europe

European tourism trade body ETOA issued a trading update on Friday, suggesting that the China visitor market could fall by half in 2020 compared to 2019. It said that there are three key origin markets of special concern: China, Japan and North America.

“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 27 January, 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 and southeast Asia bookings for 2020 had been running about +15% ahead of last year before the crisis. Since the declaration of the outbreak in Italy, said ETOA, 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.”

Demand from the US for European travel was about +10% up on last year until the crisis hit. For European tourism the US remains the most important long-haul origin market, at 19 million visitors in 2019, and around €30 billion in spend. The outbreak has occurred during a low season for travel, but the main booking period for people coming to Europe from North America.

ETOA said: “The outbreak in Italy (which represents a major component in many European trips) 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.”

China

Global Times reports 427 new coronavirus infections and 47 more deaths in the Chinese mainland as of 28 February. The number infected has reached 79,251 in China, with 2,835 deaths.

Click to enlarge

International

Five new states (Belarus, Lithuania, Netherlands, New Zealand and Nigeria) have reported cases of COVID-19 in the past 24 hours, the World Health Organization (WHO) said today. As case numbers hit 83,652 across the globe, the organisation has increased the assessment of the risk of spread and risk of impact of COVID-19 to its highest level.

South Korea

Deputy Prime Minister Hong Nam-ki today unveiled a comprehensive support package for the economy worth more than KRW20 trillion (US$16.5 billion) – including the introduction of relief measures for small and medium sized duty free retailers at airports.

There were no measures announced to aid large duty free retailers. Airport companies in other countries – notably Singapore, Hong Kong and Thailand – have introduced their own relief packages for business partners.

The Korean travel retail industry has witnessed a sharp downturn in passenger traffic and duty free sales caused by the COVID-19 outbreak. According to statistics published by the Ministry of Finance and Economy, Chinese arrivals to Korea declined -80.4% year-on-year in the third week of February and by -72.8% in the period from 1-24 February. Duty free sales are down by -40.4% year-on-year through January and February and are expected to deteriorate further amid a surge in confirmed cases of COVID-19 in Korea.

For the full story, click here.

China/Thailand

A total of 10,000 face masks donated by King Power International for those on the frontline combatting COVID-19 have arrived at Chongqing Jiangbei International Airport.

It is the latest act of solidarity by the Thai retailer. It recently released a video featuring both Thai superstars and first-team players for Leicester City voicing their support for China, with many saying the refrain: “Come on China, come on Wuhan.”

Read the full story here

Israel

Israeli scientists are on the cusp of developing the first vaccine against COVID-19, according to the country’s Science & Technology Minister Ofir Akunis.

“Congratulations to MIGAL [The Galilee Research Institute] on this exciting breakthrough,” Akunis said. “I am confident there will be further rapid progress, enabling us to provide a needed response to the grave global COVID-19 threat.”

If all goes to plan, the vaccine could be ready within weeks and available in 90 days.

International

In its financial results for 2019 released yesterday, Lagardère Travel Retail acknowledged the COVID-19 outbreak will impact its performance for 2020.

The retailer has estimated its exposure to Chinese passenger spend is around 12%. This means it expects the impact on its EBIT for the first quarter of the year to be around €20 million (US$21.6 million). Corrective actions, such as the optimisation of opening hours and rent, have already been taken, Lagardère added.

“Undeniably, the COVID-19 health crisis is creating headwinds for all players in our industry, but our three business lines strategy and global footprint ensure the resilience of our model in the face of such events,” Lagardère Travel Retail Chairman & CEO Dag Rasmussen said.

Read the full story here

South Korea

Chinese inbound travel to South Korea fell by -72.8% year-on-year to 109,400 in the period from 1-24 February, according to the latest data provided by the Korean Ministry of Justice. In the same period in 2019, 403,000 Chinese visited the country.

Chinese arrivals to Korea were 2,070 on 24 February, far lower than the average daily arrival last year of between 10-15,000.

For more details, access our story here.

China

327 confirmed new coronavirus infections and 44 new deaths were reported yesterday in Mainland China. 2,788 people have now died.

Hubei Province reported 318 new cases of COVID-19 with 41 new deaths. 2,682 deaths have been reported in the province, home to Wuhan, epicentre of the outbreak.

First the good news: The number of confirmed cases in China continues to decline. The bad news (below) is that COVID-19 is on the rise faster in the rest of the world. Click to enlarge.

International

A comparison of the following charts from the past three days courtesy of John Hopkins University tells the tale of how COVID-19 has become a global threat, right on the cusp of being a pandemic.

Source: John Hopkins University (Click to enlarge)

Japan

The 15th ACI Asia-Pacific Regional Assembly, Conference & Exhibition scheduled for 21-23 April 2020 in Nara, Japan, has been postponed.

ACI Asia-Pacific will announce new dates for the event shortly; they will likely be after Summer of this year, the association noted.

“ACI Asia-Pacific, together with the host Kansai Airports, have been closely monitoring the COVID-19 outbreak as it has unfolded,” the association said. “Growing public concern and the severity of circumstances surrounding the outbreak have not eased off.

“Our foremost priority is the health and well-being of all participants and workers of the event. As such, ACI Asia-Pacific, together with Kansai Airports, have made the difficult decision to postpone the event. Postponing the event will also enable our airport members and partners to focus on the priorities at hand as a result of this outbreak.

“Thoughts and wishes for speedy recovery are with those affected by the outbreak in our region and beyond.”

Singapore

Singapore Airlines has suspended inflight sales on flights to Hong Kong and Mainland China as one of several precautionary measures taken to protect staff and customers.

“The safety of our customers and crew is a priority for Singapore Airlines,” a spokesperson for the airline said.

“In response to the COVID-19 outbreak, we have taken several additional measures in our in-flight services for Mainland China and Hong Kong flights.

“This includes proving disposable wet towelettes to replace the hot towel service, providing hand sanitisers for both crew and customers, removing pillows from economy class seats, removing magazines and seatback literature, as well as suspending KrisShop sales.”

International

South Korea has announced 449 new confirmed cases of COVID-19 today (27 February), overtaking the number of new confirmed cases in China (433) for the first time since the outbreak.

But World Health Organization (WHO) Director-General Tedros Adhanom said that the situation won’t be declared a pandemic “without careful and clear-minded analysis of the facts”.

Former Director of the US Centers for Disease Control and Prevention (US CDC) Dr. Tom Frieden stated his belief that COVID-19 will become a pandemic, advising that the virus is shifting “from the initiation phase of the pandemic to the acceleration stage”.

The World Health Organization said it would carefully analyse the facts before declaring a global pandemic

According to the US CDC, COVID-19 currently meets two of its three criteria for a pandemic: it spreads between people and it kills. It is also moving closer towards meeting the third criteria: a worldwide spread of the virus. The CDC stated that the “current global circumstances suggests it is likely that this virus will cause a pandemic”.

There are now confirmed cases of COVID-19 in 38 countries, according to the latest WHO statistics.

WHO last declared a global pandemic in June 2009 following the spread of H1N1 flu. This was the first global pandemic since the 1968 Hong Kong flu. There were 30,000 confirmed cases in 74 countries when WHO announced the 2009 flu outbreak as a global pandemic, with WHO Director-General Dr Margaret Chan stating at the time that “a characteristic feature of pandemics is their rapid spread to all parts of the world”.

Turkey

Unifree Duty Free and Gebr Heinemann have indefinitely postponed the Unifree Duty Free Gala Event as a result of the COVID-19 outbreak. The event was scheduled to be held at the Ciragan Palace in Istanbul, Turkey on 6-7 April.

Germany

Airport operator Fraport has introduced an extensive range of cost-reduction measures in response to the COVID-19 outbreak, including offered voluntary unpaid vacation or temporary reduced working hours for operational and administrative staff.

“We are responding decisively to this difficult situation with our timely countermeasures,” said Fraport Executive Board Chairman Dr. Stefan Schulte.

Click here for full details.

South Korea

Lotte Duty Free is introducing telecommuting (working from home) for staff at its Myeong-dong, Seoul headquarters from tomorrow (28 February) until 6 March in a bid to prevent its team catching or spreading COVID-19. As reported, South Korea has seen a surge in confirmed cases over the past week. As of 9am this morning Korean time, 1,595 cases had been confirmed, a rise of 334 day-on-day.

The telecommuting initiative is a first, albeit an unwelcome one, for the duty free industry. All employees at headquarters, except for a minimum number required for emergency responses, will telecommute. The initial period may be extended if the disease continues to spread.

“Lotte Duty Free is doing its best to prevent the spread of COVID-19 and safeguard the health of our customers and employees,” said Lotte Duty Free CEO Kap Lee. “We will extend our response depending on guidelines from the authorities and how the virus spread continues.” For full report click here.

International

The global toll mounts as confirmed cases rise in the new hotspots of South Korea, Italy, Japan and Iran. Source: John Hopkins University (Click to enlarge)

South Korea

The outbreak continues to escalate in South Korea, home to the world’s biggest duty free market, according to Korea Centers for Disease Control and Prevention (Click to enlarge)

China

The latest figures from Chinese state-owned Global Times: 433 new coronavirus infections and 29 more deaths have been reported on the Chinese mainland. The total infection number has reached 78,497, with 2,744 deaths.

In Hubei Province, the centre of the outbreak, there were 409 new cases with 26 new deaths and 2,288 cases of recovery.

Recent infection and death statistics from The National Health Commission of the People’s Republic of China confirm the downwards trend in both COVID-19 indicators. But the situation is worsening overseas.

International

The Moodie Davitt Report Senior Retail and Commercial Analyst Min Yong Jung has examined how key travel retail stocks and global benchmark indices are faring amid fears of a wider global spread of COVID-19.

The performance of our tracked travel retail and global aviation stocks over recent days; Source: Yahoo Finance

Read his report here

International

The World Tourism Organization (UNWTO) and World Health Organization (WHO) have warned of the “negative repercussions on the tourism sector” as a result of any disproportionate travel restrictions in response to COVID-19.

“UNWTO and WHO are working in close consultation and with other partners to assist states in ensuring that health measures be implemented in ways that minimise unnecessary interference with international traffic and trade,” the organisations said in a joint statement.

They added: “Tourism’s response needs to be measured and consistent, proportionate to the public health threat and based on local risk assessment, involving every part of the tourism value chain – public bodies, private companies and tourists, in line with WHO’s overall guidance and recommendations.

“UNWTO and WHO stand ready to work closely with all those communities and countries affected by the current health emergency to build for a better and more resilient future. Travel restrictions going beyond these may cause unnecessary interference with international traffic, including negative repercussions on the tourism sector.”

International

Diageo has estimated the COVID-19 outbreak will have a negative impact on organic net sales of between £225 million (US$286 million) and £325 million (US$414 million) in the company’s current fiscal year.

The liquor company added that organic operating profit is expected to take a hit of between £140 million (US$178 million) and £200 million (US$255 million).

Read the full story here

Jordan

Royal Jordanian Airlines has suspended flights from Amman to Rome until further notice, in light of the increasing number of COVID-19 infections in Italy.

The airline is also consolidating several flights from Amman to some Asian countries, as the average number of weekly cancellations of flights to the region reaches 50%.

Royal Jordanian President and CEO Stefan Pichler said the decisions were taken in the interest of traveller safety, and further measures would be implemented if necessary.

Asia Pacific/International

Duty free, airport and travel behaviour is changing dramatically as a result of COVID-19, a new study from Pi Insight has found.

Based on more than 1,000 interviews with regular travellers and duty free shoppers, Pi Insight discovered that many Asia Pacific passengers were avoiding crowded store areas, picking up products when browsing, and purchasing items if they have to queue. There has also been a slowdown in time spent in-store, and an overall decrease in desire to shop.

Source: Pi Insight. Click to enlarge.

Many travellers are also avoiding restaurants and cafes, and changing their general airport behaviour.

But that’s just those who have been able to proceed with their journey. Three quarters of Asia Pacific travellers with pre-planned trips have had their travel disrupted as a result of the outbreak, while willingness to travel is also declining.

Click here for a deeper look into the findings of the Pi Insight study.

Italy

A team of experts from the World Health Organization (WHO) and European Centre for Disease Prevention and Control (ECDC) has arrived in Italy to support local authorities.

“COVID-19 is a new virus that we need to take very seriously. This mission to Italy is one of the ways in which WHO/Europe is supporting countries across the region. We are working hard with our member states to ensure that they are ready for COVID-19, preparing for the arrival of cases and possible localised spread. It is vital that we treat patients with dignity and compassion, put measures in place to prevent onward transmission, and protect health workers,” WHO Regional Director for Europe Hans Kluge said.

Heath authorities in Italy have implemented measures to prevent onward transmission including the closing of schools and bars and the cancelling of mass gatherings in the affected areas.

The number of confirmed cases in Italy has now risen to 374 and the country has reported its twelfth death from the coronavirus.

US

The S&P 500, a key representation of the US stock market, saw around US$1.74 trillion in value eroded during a COVID-19 related two-day market sell-off, according to S&P Dow Jones Indices. [Source: CNBC]

International

Fears of a global pandemic mounted yesterday as confirmed COVID-19 cases were revealed in five European countries Spain, Austria, Croatia, Switzerland and France. They are believed to be linked to a surge of infections in Italy, where confirmed cases soared to 322 on Tuesday, up from 229 a day earlier. The Italian death toll rose to ten, from seven.

The latest scale of the outbreak globally at 8.03am (GMT) on 26 February, according to John Hopkins University (click to enlarge)

Sky News in the UK runs the headline that sums up an escalating crisis

Iran

Iran’s Deputy Health Minister, Iraj Harirchi has been confirmed with COVID-19, just one day after appearing unwell at a televised press conference (see below). At least 16 people have died in the Islamic Republic – the highest death toll outside China.

Turkey closed its land border with Iran over the weekend and Turkish Airlines has ceased all flights to and from Iran. Other neighbouring countries, including Iraq, Afghanistan, Armenia and Pakistan have imposed travel and trade restrictions on border crossings and trade. The Iraqi government announced on Monday that all flights from Iran will be suspended after reporting its first case of the virus. A family of four returning from Iran were also confirmed with COVID-19 on Tuesday.

Kuwait, Bahrain, Oman, Egypt, Lebanon and the UAE have also confirmed cases.

Dubai newspaper Gulf News highlights a growing COVID-19 crisis in neighbouring Iran that has serious repercussions for the Middle East region

China

508 confirmed new cases of COVID-19 were reported yesterday in Mainland China with a further 530 suspected infections. 71 deaths were recorded. Hubei Province saw 499 new cases (464 of them in Wuhan) with 68 deaths.

US

Top health officials from the Centers for Disease Control and Prevention (CDC) are warning of a COVID-19 outbreak in the US. Nancy Messonnier, Director of the National Center for Immunization and Respiratory Diseases, said: “It’s not so much of a question of if this will happen anymore but rather more of a question of exactly when this will happen.”

The CDC is also warning on its website that more cases are likely to be identified in the coming days, including more cases in the United States.



Singapore

Total passenger movements at Singapore Changi Airport decreased by more than -25% year-on-year in the first two weeks of February with traffic between Singapore and China for the period down by more than -85%.

As of 14 February, there were about 40 weekly services from Changi to fewer than ten cities in Mainland China, a decrease of -90% from around 400 weekly services linking the airport to 36 Chinese destinations previously.

Read more in the regularly-updated Moodie Davitt Pax Index

Qatar

An illustration of the operational challenges posed to airlines amid the COVID-19 outbreak, and especially the impact of entry restrictions imposed by certain countries, comes today in a statement from Qatar Airways. The Doha-based carrier said it is making temporary hold and schedule adjustments to its operations to South Korea and Iran until further notice. It will review operations regularly with the intention to reinstate flights as soon as the restrictions are lifted, it added.

“With travel restrictions on recent visitors to these countries, the airline is in a logistically challenging position to schedule crew on certain routes, limiting its ability to maintain scheduled operations elsewhere. As a result, the airline will temporarily readjust its services to South Korea and Iran from 26 February,” said Qatar Airways.

Flights to and from South Korea to Doha are temporarily adjusted to operate with a smaller aircraft while only passengers with onward connections through Hamad International Airport are accepted for travel from Incheon Airport. For Iran, Qatar Airways’ scheduled passenger frequencies will be on temporary hold, effective from 26 February for two weeks up to 14 March. This will affect flights to and from Mashhad, Shiraz and Isfahan.

South Korea

The sharp rise in the number of COVID-19 cases in South Korea is deterring shoppers, including Chinese resellers (crucial to the duty free cosmetics market in particular) from visiting the country. As reported, South Korea faces travel restrictions from a growing number of countries as cases of the novel coronavirus surge.

In a special report, Chinese state-owned media Global Times spoke to one reseller and several agents that handle reseller business.

It cited Crystal, a Chinese shopper based in Hebei Province who has been a professional purchasing agent for years.

Crystal said: “I usually go to South Korea once a month to buy cosmetics but this annoying coronavirus kept us home. My current stocks would be sold out in days.” She said the purchases in Korea, resold in China, would earn her about 20,000 yuan (US$2,844) every month.

“We cannot go out of China right now and I’m also scared to get infected in South Korea,” another shopping agent told Global Times.

Group tour travel to South Korea was banned in January and FIT travel has also fallen sharply as the situation in South Korea raises concern, tourism agencies have told Global Times.

Italy

DFS Group is to operate its T Fondaco dei Tedeschi store in Venice on reduced hours from 2 March, against the backdrop of the COVID-19 outbreak in northern Italy. From that date, the store will open from 10am to 7pm daily.

DFS Group said: “We maintain close contact with the Veneto Region to ensure we are aligned with any emergency plans that may be necessary.”

In addition, the retailer will maintain its temporary closure of two stores in Hong Kong until 16 March.

For the full story, click here.

International

The latest scale of the outbreak globally according to John Hopkins University shows the number of cases in South Korea has increased since the Korea Centers for Disease Control and Prevention’s overnight update (click to enlarge)

South Korea

As China gradually starts to overcome the COVID-19 outbreak, attention is increasingly focused on other countries. South Korea, home to the world’s biggest duty free market, confirmed 60 additional cases overnight, bringing the total to 893, the Korea Centers for Disease Control and Prevention (KCDC) said in a press release.

Source: Korea Centers for Disease Control and Prevention (Click to enlarge)

The Korea Centers for Disease Control and Prevention is providing daily updates on the escalating COVID-19 crisis

China

508 new confirmed COVID-19 cases were reported in Mainland China yesterday with 71 new deaths. Most infections and fatalities remain confined to Hubei Province, epicentre of the disease, which reported 499 new cases and 68 new deaths.

Source: The National Health Commission of the People’s Republic of China. Click to enlarge.

International

The Director General of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, has revealed the findings of the WHO’s mission in China.

“They found that the epidemic peaked and plateaued [in China] between 23 January and 2 February, and has been declining steadily since then,” he said.

Ghebreyesus added that there had no significant change in the viruses’ DNA in China and that the fatality rate was 2-4% in Wuhan and 0.7% elsewhere.

“Dr Bruce Aylward, [the head of the delegation], will give more detail tomorrow on behalf of the joint team,” he continued. “But the key message that should give all countries hope, courage and confidence is that this virus can be contained.”

Happening now in Beijing:

Dr Bruce Aylward explains the impact of outbreak containment measures at a press briefing on the @WHO-China Joint Mission on #COVID19 pic.twitter.com/DpCpEdZOlT

— World Health Organization Western Pacific (@WHOWPRO) February 24, 2020

Discussing what he called the “deeply concerning” increase in cases in Italy, Iran and South Korea, Ghebreyesus said the outbreak was still a public health emergency of international concern and not yet a pandemic.

“Every country must make its own risk assessment for its own context. WHO is also continuing to do its own risk assessment and is monitoring the evolution of the epidemic around the clock,” he added.

“For the moment, we are not witnessing the uncontained global spread of this #coronavirus, and we are not witnessing large-scale severe disease or death.

Does this virus have pandemic potential? Absolutely.


Are we there yet? From our assessment not yet”-@DrTedros #COVID19

— World Health Organization (WHO) (@WHO) February 24, 2020

China

The Chinese Ministry of Culture and Tourism today issued a travel safety alert advising Chinese tourists to avoid travelling to the US, citing “safety reasons”. China has been critical of the US response to the COVID-19 crisis, saying that its tourists have been treated unfairly due to excessive prevention measures introduced there. [Xinhua, Global Times]

China (Hong Kong)

Airport Authority Hong Kong has become the latest airport operator to introduce relief measures for its airport partners in light of the serious downturn in passenger traffic caused by the novel coronavirus outbreak.

Read more here

China

409 new coronavirus infections and 150 new deaths were reported yesterday (23 February) on the Chinese Mainland. The total number of confirmed cases reached 77,150, with 2,592 deaths. Hubei Province, the epicentre of the outbreak, reported 398 new cases with 149 new deaths.

This graphic shows how case numbers have come down in China and in the COVID-19 epicentre of Hubei Province. But the disease’s rapid spread abroad now shapes as a huge challenge.

Qatar

Qatar Airways said today that all travellers arriving in Doha from Iran and South Korea should isolate themselves at home or in a quarantine facility for 14 days.

“Passengers arriving from those countries who are showing symptoms will be transferred to the Communicable Disease Centre at the Hamad Medical Corporation,” the airline said in a statement. “We thank our passengers for their cooperation in this matter.”

Italy

Italy has assumed the unwanted status of Europe’s most-affected country by COVID-19 with the number of confirmed cases soaring to 157. Italy’s spike, mainly in the north, marks the biggest outbreak outside of Asia. Strict emergency measures were implemented over the weekend, including a ban on public events in ten municipalities.

The famous Venice Carnival was closed on Sunday, two days earlier than planned.  Two of the region’s 25 cases occurred in Venice, a hugely popular tourist destination and home to the acclaimed T Fondaco dei Tedeschi by DFS. That business stands to be heavily affected by an expected prolonged downturn in Chinese visitors caused by COVID-19.

Our latest update from John Hopkins University shows a growing number of cases in Italy and Iran (click to enlarge)

South Korea

President Moon Jae-in today put the country on the highest possible Level 4 alert in its fight against COVID-19. The move empowers Moon’s government to lock down cities and take other drastic measures to contain the disease.

“The coming few days will be a critical time for us,” President Moon said. “This will be a momentous time when the central government, local governments, health officials and medical personnel and the entire people must wage an all-out, concerted response to the problem.”

South Korea’s Ministry of Foreign Affairs revealed today that 12 countries have banned or strengthened their entry procedures from Korea due to concerns over the country’s surge in COVID-19 cases.

Israel, for example, has banned visitors from Korea. It sent back approximately 130 Korean passengers on Korean Air KE957, which arrived in Tel Aviv last night. Bahrain has introduced similar measures.

“The spike of cases in South Korea and a rising death toll in Iran have added to fears that the window to avert a global pandemic is narrowing,” the New York Times wrote. “The World Health Organization warned African leaders of the urgent need to prepare for the virus; it identified 13 African countries as priorities because of their direct links to China.”

China

The National Health Commission of the People’s Republic of China announced that on 22 February, 648 new confirmed cases of COVID-19 were reported in Mainland China with 97 deaths. The death toll on the Mainland has now reached 2,422 out of 76,936 cases.

Hubei Province, home to COVID-19’s epicentre of Wuhan, reported 630 new confirmed cases and 96 deaths.

Source: The National Health Commission of the People’s Republic of China

South Korea

Confirmed cases of COVID-19 continue to soar in South Korea – home to the world biggest duty free market. The total has reached 556 with five deaths, according to the country’s leading media agency Yonhap News. The potentially fatal illness has been identified in many regions, including South Korea’s 17 major provinces and cities, the report said.

On Friday, the government declared Daegu – epicentre of the Korean outbreak – and its adjacent county Cheongdo as “special care zones”.

Prime Minister Chung Sye-kyun yesterday called the situation “grave”.

[Click on the YouTube icon above to watch The Moodie Davitt Report’s video snapshot of this week’s major developments from the COVID-19 coronavirus crisis]

Italy

Italy’s Health Ministry this morning confirmed the country’s first death from COVID-19, as a man in Padua passed away after contracting the virus. A second death was later reported in Lombardy by news agencies.

Health authorities have reported 15 cases of the virus in the northern region of Lombardy and two in Veneto where Padua is located.

China

Global Times reports 397 new coronavirus infections and a further 109 deaths in Mainland China. This takes the death toll to 2,345, with case numbers at 76,288.

In encouraging news from China, 18 provinces reported no new cases, offering hope that containment measures inside the country are working. As of Friday, the number of daily reported infections in regions outside Hubei dropped to 31, the lowest in a month, according to China’s National Health Commission.

China

 The China Duty Free Group-run Sanya International Duty Free City (CDF Mall) has celebrated its reopening with record daily ecommerce sales of more than CNY44.28 million (US$6.3 million).

As reported, China Duty Free Group (CDFG) reopened its main duty free stores on Hainan Island, including the flagship CDF Mall in Sanya, on 20 February. The stores had been closed since 27 January due to the COVID-19 crisis. For full story, click here.

Back with a bang: Responsible retailing combined with a renewed focus on online shopping led to an encouraging reopening for the CDF Mall

China’s domestic tourism revenue (including Hainan Province, home to China’s offshore duty free industry) is expected to plummet by -69% in the first quarter due to the COVID-19 epidemic, according to China Tourism Academy. Given a recovery later in the year, full-year revenue is set to fall about -21% the organisation said. [Source: Global Times]

As revealed by The Moodie Davitt Report yesterday, China Duty Free Group has reopened its main stores on Hainan Island.

Back in business: CDF Mall in Haitang Bay reopened yesterday, an important boost for Hainan Province’s beleagured offshore duty free sector

South Korea

South Korea, home to the world’s biggest duty free market, is now also home to the most confirmed cases of COVID-19 after China and the Diamond Princess cruise ship following a surge in the infection rate over recent days. The country’s leading news agency, Yonhap, reported that 48 more cases have been reported today, bringing the total to 204.

The number of cases in South Korea has surged even since our latest daily update from John Hopkins University (click to enlarge)

China

The National Health Commission of the People’s Republic of China announced that on 20 February, 889 new confirmed cases of COVID-19 were reported in Mainland China with 118 deaths. The death toll on the Mainland has now reached 2,236 out of 75,465 cases.

Hubei Province, home to COVID-19’s epicentre of Wuhan, reported 631 new confirmed cases (319 in Wuhan) and 115 deaths (including 99 in Wuhan).

Source: National Health Commission of the People’s Republic of China

THE MOODIE DAVITT REPORT HAS BEEN PRODUCING DAILY UPDATES ON THE NOVEL CORONAVIRUS OUTBREAK SINCE 22 JANUARY. FOR EARLIER COVERAGE OF THE COVID-19 CRISIS CLICK HERE.

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