Economic Impact Of Coronavirus Will Likely Top $40 Billion, As Theme Parks, Restaurants And Theaters Go Dark
As of Friday, the Chinese government has issued a travel ban that affects 35 million people. Not only can they not travel, but their leisure activities are severely curtailed, which means a severe economic impact on China and its business partners is inevitable.
The government has closed all theme parks, including Hong Kong Disneyland, Ocean Park, Shanghai Disneyland and Disneytown, and the country’s movie theaters are also shuttered. Concerts aren’t being held, and even McDonald’s and Starbucks are closed in certain cities. In the special administrative region of Macau, casinos are still open. However, dealers have to wear masks, and the government may soon shutter the venues, which are mostly owned by US-based companies.
China has confirmed 1,975 cases of patients infected with the coronavirus as of Jan. 25. The official death toll has risen to 56, but the informal social media estimates claim that number is way less than reality.
A 2004 analysis claimed the previous major disease outbreak, the SARS crisis, cost the world economy a total of about $40 billion.
“However, just calculating the number of canceled tourist trips, declines in retail trade, and similar factors is not sufficient to get a full picture of the impact of SARS because there are linkages within economies, across sectors, and across economies in both international trade and international capital flows,” said the report.
It also warned, “As the world becomes more integrated, the global cost of a communicable disease like SARS can be expected to rise. Our global model is able to capture many of the important linkages across sectors as well as countries through capital flows and the trade of goods and services, thereby providing a broader assessment of disease-associated costs.
The virus outbreak came at the worst possible time for the Chinese economy, as its weeklong Lunar New Year holiday is usually a time of mass migration by the population. Public celebrations have been scaled back or cancelled as a result of the disease outbreak.
Disney will offer refunds to those who booked tickets and resort stays through its official platform.
Airlines are still in service, although there are no flights directly from Wuhan, the epicenter of the virus outbreak. But cruise lines are also banning Wuhan residents or passers-by in that city to board.