Tourism cancellations foreshadow economic aftershock

By Sapeer Mayron 04 December 2019, 5:00PM

While the human cost is still being counted, the mesles epidemic has already cost Samoa's recently fast-growing tourism sector tens of thousands of tala, with more impacts yet to be seen. 

In Savaii, Stevenson’s at Manase General Manager Courtney Stevenson said he does not know how his property will make it to the next season, with $36,000 lost in cancelled bookings alone.

“That’s before food and drinks,” he added. 

"It has been a tough time for business and he is not sure how bills, loans and salaries are going to be paid."

Luckily for him, many of his staff left for the summer to undertake seasonal work in New Zealand. That has freed up shifts for his other workers, eking out a living on three shifts a week while business is slow.

“The real obstacle now is trying to cope financially,” Mr. Stevenson said, suggesting he may even need to sell property or land to make it through, or “beg the banks for mercy.”

While not banking on it coming through, he said he would welcome Government assistance with “open arms.”

Above all else, Mr. Stevenson is devastated by the death toll measles has taken on his home. He said his heart breaks for the people who have died and the families mourning them.

“You get quite down about your situation but it’s only money, that stuff. The other stuff is lives. I would be lost if something happened to my little ones, so I can only imagine how these families are coping.”

On the South Coast of Upolu in Aleipata, Litia Sini Beach Resort has seen a flurry of cancellations and a major drop in day visitors, which manager Lydia Toomalatai attributes to measles. 

“I’ve seen a drop since about two weeks ago,” she said. This season’s major tourists – friends and visiting relatives –are the ones least likely to risk the trip home, she believes. 

“We are still getting inquiries but I have not seen any future bookings in the last few weeks and I can see that’s a drop. I would think that has something to do with the epidemic.”

In 2009, Ms. Toomalatai lost her entire operation to the tsunami. Back then, she worried tourism would never recover from the devastation.

“But I was proven wrong, people still love to come to our little island regardless of the disaster and I still believe that the same thing will happen. It will be slow coming in, but hopefully it will change soon.”

She is planning to take matters into her own hands with specials and discounted rates heading into February. The release of dividends by the Samoa National Provident Fund won’t be much help, she thinks.

“The 1.1 per cent, that’s not very much, is it? When I read that, I thought this is a joke.

“It will benefit of course the people who have a hundred grand in their superannuation but us little people, we are not going to benefit.

“Hopefully [Government] will give us another loan scheme like they did with the tsunami where the Development Bank gave us five per cent loans.”

In three months, measles has infected 3,881 people and killed 55, mostly children under four years old. Around 30 per cent of cases have required hospitalisations, many of whom have been in intensive care. 

Professor Ilan Noy is the inaugural Chair in the Economics of Disasters at the Victoria University of Wellington, and is currently researching the economic impact of epidemics for the Asian Development Bank.

He said it is clear is that tourism can suffer the most from epidemics.

“Tourism flows are largely dictated by image, and by perceptions of risk rather than the actual risk,” Professor Noy said. 

“With epidemics, a lot of times there is a tendency to not view the risk quite accurately.”

During the Ebola epidemic in West Africa in 2014, tourism suffered in Kenya, nearly 8000 kilometres away with no Ebola cases and not even a direct flight connecting the two areas. Most countries in Africa saw tourism declines too.

“But the perception was ‘there is Ebola in Africa and so I will not vacation in Africa.’ I think the measles epidemic of Samoa presents a risk there.”

He said he was not surprised to learn hotels had taken such a beating.

“About the quantity I can’t say, because I don’t know the size of the business or what it means as a percentage of their bookings, but the fact that there has been a collapse, dramatically and rapidly, is not a surprise at all.”

On top of tourism, the epidemic will have an impact on other sectors of the economy, Professor Noy said, based on how the disease affects everyone’s behaviour.

With the closure of schools as one example, everyone from nearby shopkeepers to bus drivers and janitorial staff will be financially impacted. 

“Those are the other kinds of vulnerabilities, especially with something like measles which is highly infectious.”

More impacts will be felt across the board this week as the nation’s private sector (with some exceptions) prepares to join the Government in closing on Thursday and Friday.

Inter-island travel is prohibited and no cars will be allowed on the roads.

Hotel and hospitality services communication services and the morgues are exempt. 

Ms. Toomalatai said she has not been into Apia since October when the epidemic was officially announced. All Christmas shopping is on hold until she feels safe to go into town, she said.

Dr. Robert Kirkby, a Macroeconomist at Victoria University of Wellington said the tourism sector, which had previously accounted for the first major signs of economic growth in Samoa, may soon represent a dire drop in gross domestic product (G.D.P.).

“Earlier G.D.P. numbers showed increase in annual G.D.P. of $120 million, with an increase in tourism accounting for just over half of this, all else equal. Tourism was mostly about increased numbers of tourists, with smaller role for increase in spending per tourist,” he explained.

“If the measles outbreak causes tourism numbers to stop growing this would roughly halve G.D.P. growth. If tourism falls, this would have an even greater effect on G.D.P. growth. 

“Any second round effects, such as decreased tourism causing hospitality workers to cut back on spending, would make these effects even bigger.”

The Samoa Tourism Authority last week began investigating the total impacts this epidemic is having on the sector, while insisting the borders are not closing to tourists. 

Pativaine Petaia-Tevita, Finance and Corporate Services manager said her department has been gathering information on cancellations for November to January 2020 from airlines and accommodation providers across the country.

No airlines have responded to their request yet but so far 15 accommodation providers on Upolu have, Ms. Petaia-Tevita said.

She was unable to share more about the accommodation provider’s reports on their situations due to confidentiality. 

“We are in the process of compiling a report on the impacts of the measles epidemic on the tourism sector mainly the tourism accommodation properties sector,” she said.

“We are also looking at rental cars and tours registered with S.T.A. Restaurants would be tricky as people usually do not make bookings at restaurants a month ahead.”

Professor Noy said he was surprised to find how little research has been done on the economic impacts of epidemics, especially given the potentially scale an epidemic can have such as the influenza of 1918.

In Samoa alone, the epidemic killed 8,500 people, around 22 per cent of the population. Globally, 500 million people were infected and an estimated 20 per cent of those died, equating to anywhere between three and six per cent of the entire population of the world.

 “The highest mortality event in the last 100 years was the flu epidemic in 1918. It killed more people than World War I and World War II combined.

“These events can be catastrophic but there is very little research on them. So to really quantify what is the economic impact of this epidemic on Samoa, we don’t have enough information and so we don’t know.

“That is part of the reason why the Asian Development Bank is interested in that, or I made them be interested in that, because there is no research on it.”

He added there is little in the way of research on countries bounce back from these financial impacts of epidemics, but that Government will, like with any disaster, have a major role to play.

Mr. Stevenson said the next few weeks will bring a lot of sleepless nights while he and his company figure out how to get through the season.

“We’ll do our best, the sun comes up tomorrow. It is what it is.”


By Sapeer Mayron 04 December 2019, 5:00PM

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