Tourism Sector Totters in Shanghai

Tourism Sector Totters in Shanghai

The impact of SARS is debilitating the tourism industry in Shanghai with travel agencies receiving far fewer tourists and a lot of cancellations, and hotels seeing more and more vacant rooms. Until April 27, local travel agencies had refunded money to 3,464 inbound groups involving 75,182 tourists and 279 outbound groups with 8,901 tourists after they canceled their tours, the Shanghai Tourism Administrative Commission said Friday at a news briefing. According to the commission, travel agencies offering both domestic and overseas tour packages reported their income plummeted by 78 percent in April compared to the same period last year, while agencies dealing in domestic travel said their income dropped 20 percent year-on-year. "Since April, the number of tourists we received has plunged 88 percent compared to the same period last year, and the income is down by more than 20 million yuan (US$2.4 million)," said Li Huaifa, vice president of the Shanghai China Travel Service. He added the company's total revenue in May would be merely 1 million yuan (US$120,000), 30 million yuan (US$3.6 million) short of the figure for the same period last year. "I can hardly imagine the loss in the following period if the epidemic is not controlled," Li added. Li Junhua, president of Shanghai Dazhong International Travel Service, echoed his views. "Bad news has come in a gust. In late March, some tourists began asking for refund due to the SARS outbreak in some southern cities. Then on April 12, the National Tourism Administration ordered us to stop selling package tours to Singapore, Malaysia and Thailand," he said. "Eight days later, the State Council announced the decision to shorten the May Day holiday to discourage travel," added Li. "By the end of April, we had refunded all our travel groups." Business has been slack at most agencies since stricter regulations were enforced to limit domestic travel. The city has more than 500 travel agencies, but that number may fall as many small firms are on the verge of collapse. Hotels are also feeling the pinch. According to the commission, the occupancy rate at 398 local hotels was less than 20 percent on average, while at five-star hotels it was only 13 percent. The city government has announced to offer subsidies to hotels and travel agencies while exempting all hotels of the social construction fees. Travel agencies and hotels are also taking their own measures to reduce their losses. Many hotels have taken measures to reduce costs, including stopping all overseas training programs, halting ads and promotional activities and encouraging staff to take leave without pay.