‘It Will Be Catastrophic.’ Asia’s Tourism-Dependent Economies Are Being Hit Hard by the Coronavirus

Klong Khong beach on the southern Thai island of Koh Lanta is a long sweep of coarse silver sand fringed by Indian almond trees and palms. A knot of beach shacks offer tourist staples—massages, fruit shakes, grilled seafood—in signs written in English and, in similar prominence, Mandarin Chinese.

Yet few Chinese faces grace Koh Lanta these days as fallout spreads from the coronavirus outbreak that has so far infected more than 60,000 people and claimed at least 1,360 lives. Although the Thai government has not joined many of its neighbors by imposing a complete ban on Chinese visitors, the suspension of tour groups from the People’s Republic, combined with a drop in visitors more generally in response to the crisis, is hitting Koh Lanta hard.

“Last month, there were many, many Chinese staying here,” says Khun Mohammed, whose family runs the Lanta Lapaya Resort in Klong Khong. “Now it’s just one room.”

While the spread of the coronavirus has rattled manufacturers and upset supply chains the world over, the tourism-dependent economies of Southeast Asia are particularly vulnerable. China’s rapidly swelling middle class sparked a boom in tourist visits abroad, which soared from 20 million in 2003 to 150 million in 2018.

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Besides Thailand’s, it is the tourism industries of Malaysia, Cambodia, Vietnam, Singapore, Hong Kong, South Korea and Japan that are most exposed to the Chinese travel market. “If this lasts for three to six months, it will be catastrophic for the tourism industry,” says Stuart McDonald, founder of the TravelFish independent travel guide to Southeast Asia.

Today, Chinese visitors account for 30% of Thailand’s total tourist footfall, spending $18 billion in 2019. Direct tourism spending accounts for an estimated 12% of Thai GDP with Chinese visitors playing “an increasingly important role in underpinning the Thai tourism economy,” according to London-based business information provider IHS Markit.

The fallout is being felt across the self-styled “Land of Smiles.” In Thailand’s stupa-strewn northern capital of Chiang Mai, the 20-room SugarCane boutique guesthouse has suffered cancellations of almost 150 room nights, with almost no new bookings in last two weeks. “The speed with which demand dried up is quite shocking,” says general manager Stuart Cavaliero.

The drop in Chinese tourist numbers from January to April alone could cost the Thai economy $3.05 billion, according to The Tourism Authority of Thailand, not counting the revenue loss of other nationalities choosing to stay away. Arrivals booked by the Association of Thai Travel Agents dropped 99% from China and 71% overall for the first ten days of February compared with the same period last year, reports Reuters.

Other nations face a similarly grim reality. The damage to Vietnam’s tourism sector due to the coronavirus will range between $5.9 billion and $7.7 billion, according to Vietnam National Administration of Tourism estimates. Indonesia’s tourist island of Bali has seen 20,000 hotel bookings canceled, even though Indonesia does not have a confirmed case of coronavirus to date.

Thailand has 33 cases and the public is growing uneasy at the government’s reluctance to close the border to Chinese, who are subject to stringent travel bans by Japan, Australia, India, Indonesia, New Zealand, the Philippines, Singapore and Vietnam.

In many places, fears about the virus’s spread have infused and emboldened long-held anti-Chinese prejudices. In Australia, a Malaysian student of Chinese heritage was evicted from her home due to her landlord’s fears about the virus. In Singapore, a petition calling for a ban on Chinese tourists, which collected over 100,000 signatures, claimed the virus was a result of “self-inflicted unhealthy food consumption.”

For Ruby Thiagarajan—editor-in-chief of Mynah Magazine and author of a feature exploring how the coronavirus has emboldened xenophobia in Singapore— the outbreak has “conveniently also given Singaporeans who harbor anti-Chinese sentiments justification for how they feel.”

In Thailand, the decision to allow Chinese tourists to visit has also been “divisive locally,” says Cavaliero. Yet he hopes the decision not to implement a ban “may end up providing a reciprocated goodwill dividend in the future.”

Still, despite the absence of a wholesale ban, widespread fear and misinformation persists across Thailand’s hospitality industry. Images of a sign reading “No Chinese” put up by a restaurant in Chiang Mai went viral on social media, prompting the local officials to order its removal. In the royal beach resort of Hua Hin, one Chinese mother and child were almost forced to sleep on the street after no hotel would take them, according to local media.

When Charles Turner, proprietor of the Food4Thought restaurant in Chiang Mai, organized a training session among staff in response to the coronavirus, he had to quell requests to ban Chinese customers.

“Many of my staff​ were disturbingly under-informed about how viruses spread, the mixed verdicts about the efficacy of masks, and so on,” he tells TIME. “If I were to guess, the story of business owners denying entry to Chinese customers​ is more prevalent that most realize.”

For TravelFish founder McDonald, it’s important tourists from elsewhere do not exacerbate the looming economic shock by staying away when there’s objectively no great need. Instead, they can take advantage of thinner crowds and cheaper prices to boot.

“China is a separate situation,” he says, “but for Southeast Asia, I don’t really see any pressing reason to change travel plans.”