Back Resiliency in the light of the 2019-nCoV coronavirus

The coronavirus epidemic has reached a dangerous new stage with the World Health Organisation (WHO) describing the sudden increase in cases of infection outside China, in South Korea, Iran and Italy, as “deeply concerning”.

It appears a case of when not if the WHO designates the 2019-nCoV coronavirus a global pandemic. The European Commission has resolved to keep EU borders open but warned (February 25) that the situation “could get worse before it gets better” and the US Centers for Disease Control and Prevention gave warning of potential “severe” disruption in the US.

At this stage, China remains at the centre of the epidemic. As of February 26, Chinese authorities reported 78,064 infections and 2,715 deaths out of a global total of more than 80,000 infections.

However, the progress of the outbreak in China gives cause for optimism. The reported toll of 52 deaths in China on February 25 was the lowest in three weeks. Five days earlier (February 20) Chinese authorities reported a steep drop in infections at the centre of the outbreak in Hubei, reporting 349 new infections compared with 1,693 the day before and the lowest since January 25.

The WHO reaction was rightly cautious, not least because the fall in reported infections in China followed a second change in the way these are classified. WHO director general Tedros Adhanom Ghebreyesus noted: “This trend must be interpreted very cautiously. Every scenario is still on the table.”

The WHO also warned coronavirus infections could “rebound” as China relaxes restrictions on travel and work. The figures are nonetheless heartening.

Yet the toll by February 26 of more than 1,100 infections and 11 deaths in South Korea and 300 cases and 11 deaths in Italy, plus the spread beyond these countries, suggest the epidemic has yet to run its full course outside China.

Understanding the epidemic

The context is important. Viral epidemics are not uncommon. The US Centers for Disease Control has already recorded 19 million cases of flu in the US in 2019-20, 180,000 hospitalisations and 10,000 deaths, making the current flu season the worst for several years. The 2009-10 strain of flu killed 579,000 people worldwide.

Coronavirus outbreaks are also not uncommon. Previous outbreaks include the viruses responsible for Severe Acute Respiratory Syndrome (SARS) in 2002-03 and Middle East Respiratory Syndrome (MERS) in 2012.

2019-nCoV has already proved more serious than SARS, which killed almost 800 people. A “conservative estimate” by Chinese virology expert Guan Yi is that the epidemic “could end up at least 10 times the scale of SARS”.

The rising death toll appears alarming. But the picture we have of the virus has appeared fairly consistent over the course of its spread. About four out of five people infected show mild symptoms, the elderly and those with pre-existing health conditions are at most risk, and the death rate is about 2% – well below that for SARS (10%) and MERS (34%).

The outbreak in Wuhan

This picture appears confirmed by a study by China’s Centre for Disease Control of 44,000 people infected in Wuhan over two months between December 8 and February 11.

More than half of those infected were aged 50 or above and 36% aged 30-49, with 2% under 20 and about 8% aged 20-29. The study categorised cases as mild (80%), severe (14%) and critical (5%), although ‘mild’ cases included some with mild pneumonia. ‘Severe’ cases included those suffering shortness of breath or rapid breathing. Critical cases involved respiratory failure, septic shock or organ failure.

Men (51.4%) appeared slightly more likely to develop the infection than women. However, 63% of deaths were among men, meaning a death rate of 2.8% for men compared with 1.7% among women. This could reflect a higher rate of smoking.

The overall death rate in the study was 2.3%. But the death rate appears to vary. In China’s Hubei province it has hit 2.9% compared with 0.4% in the rest of China. It remains unclear why, but WHO director of emergencies Dr Mike Ryan suggested: “Lessons learned in Wuhan are being applied elsewhere [and] could explain the lower death rate outside Hubei.”

The death rate also appears to have fallen as the outbreak progresses, coming down from above 14% at the end of December. This broadly mirrors what happened with the swine flu (H1N1) epidemic in 2009 which initially showed a death rate of about 20% but fell to below 0.03%. It reflects a focus on the most-severe cases at the outset of an epidemic.

The basic advice for personal protection against the coronavirus is also worth noting as it remains disarmingly simple. The WHO recommends: “Frequently clean your hands with an alcohol-based hand rub or wash them with soap and water. [Then] dry them thoroughly using paper towels or a warm air dryer.”

Likely duration of the epidemic

A World Travel & Tourism Council (WTTC) study, Crisis Preparedness, Management and Recovery, published in November 2019, analysed 90 ‘crises’ including 12 disease outbreaks and suggested the average time it takes for tourism to recover following a crisis fell between 2001 and 2018 from 26 months to 10 months.

The report noted: “Of the four crisis categories, political instability proved the most challenging.” On the impact of disease, it concluded: “Epidemics and [disease] outbreaks have become the new normal. The rise in population density in large urban areas and enhanced international mobility and travel have led to higher exposure to novel diseases and increased potential for transmission.”

However, this is not the biggest problem when it comes to recovery from a disease outbreak. Former WHO director general Margaret Chan noted: “Rumours and panic spread faster.” The World Bank estimates 90% of economic losses during a disease outbreak result from uncoordinated public efforts to avoid infection.

In mid-February 2020, WTTC chairman and Hilton president and chief executive Chris Nassetta told investors he expected the impact of the epidemic to last six to 12 months. He suggested: “Three to six months of escalation and impact from the outbreak, and another three to six on recovery.”

Given the latest developments, we should expect the impact to extend at least towards the higher end of this estimate.

It is worth noting it took four months from the WHO’s announcement of a global alert about SARS for the outbreak to be contained and an additional five months before the WHO ceased reporting new cases.

Impact on travel

An indication of the impact on travel in China was a plunge in trips for the Lunar New Year holiday from 421 million in 2019 to 152 million this January before the imposition of more widespread restrictions. Since then, hotels have suspended operations, flights been grounded and attractions closed.

Wu Bihu of the Tourism Research and Planning Centre at Peking University has forecast China’s travel industry could lose up to 3 trillion yuan ($430 billion) this year. A shutdown of beyond three to four months threatens businesses with bankruptcy.

The early association of the outbreak with China triggered widespread restrictions on Chinese and other Asian travellers, rightly leading the WTTC to warn (February 11): “Chinese and Asian tourists must not be stigmatised.”

Beyond China, analyst ForwardKeys noted in early February a 10.5% fall in outbound bookings for March and April across the Asia-Pacific region (excluding China/Hong Kong), while hospitality analyst STR reported (February 25) hotel occupancy in Macau at 3%, Hong Kong 25% and Taiwan 26%.

Airline association Iata forecast Asia-Pacific air passenger traffic will contract by more than 8% this year on 2019 and warned of a 13% loss in demand over the course of 2020 even if the emergency remains confined to China. Iata also forecast a near 5% hit to global demand, but warned: “If it [the virus] spreads more widely to Asia-Pacific markets, impacts would be larger.”

The association noted: “These estimates are based on a scenario where COVID-19 has a similar-shaped impact on demand as during SARS. That was characterised by a six-month period with a sharp decline followed by an equally quick recovery. [But] we don’t yet know exactly how the outbreak will develop.”

At least one leading analyst has suggested the coronavirus epidemic has already led to the biggest-ever reduction in airline activity.

The impact on the cruise sector has been widely noted given the unfortunate quarantining of passengers aboard the ship Diamond Princess by Japan and the refusal to allow a second ship, the Westerdam, to dock by authorities in several countries including Japan, Thailand and the Philippines.

Hopes that the release of passengers from the two ships might alleviate the unfortunate conflation of the ships and their stranded passengers with the epidemic were dashed by the continuing spread of the virus among those suffering quarantine. This is regrettable given the precautions taken by major cruise lines. Royal Caribbean chief executive Richard Fain noted in mid-February: “We have taken aggressive steps to minimise risk through boarding restrictions and itinerary changes.”

Industry response

None of this is to diminish the seriousness of the coronavirus epidemic. We should acknowledge the selfless work, and risks taken, by medical workers and many others. China reported more than 1,700 health workers infected in February, although fewer now appear to be catching the virus – hopefully a reflection of tightening infection controls.

The course of the epidemic will largely depend on the coordinated actions of governments, the WHO, Centres for Disease Control and similar bodies.

The WTTC report Crisis Preparedness, Management and Recovery noted: “Effective management of a crisis requires rapid activation of emergency plans as well as quick, accurate and transparent communication.” We must hope inaccurate communication is kept to a minimum. The WTTC has also rightly urged “even closer cooperation between public and private sectors”.

The sector will recover. But first the outbreak must be contained and pass its peak. In the meantime, the industry should seek to disseminate accurate information, display flexibility and act cooperatively. The concerns of travellers are real, as are the difficulties facing businesses and communities dealing with the fallout.