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Short-term Perturbations and Tourism


Effects: The Case of SARS in China
Benxiang Zeng and Rodney William Carter
School of Natural and Rural Systems Management, University of Queensland,
Gatton, Queensland 4343, Australia
Terry De Lacy
Sustainable Tourism CRC, PMB 50, Gold Coast MC, Queensland 9726, Australia

The 2003 SARS epidemic created a significant negative impact on tourism develop-
ment in China. This paper reviews the effects on tourism of different short-term crises,
analyses the effects of SARS and explores the possibility of tourism businesses being
buffered from such short-term crisis and the possible new motivations derived from
the crisis. Tourism’s lack of resistance but high resilience to short term crises provides
tourism and regional planning challenges. These characteristics suggest diversifica-
tion and partnerships can minimise community vulnerability to crises and rapid
economic recovery is possible based on tourism’s resilient nature.

Keywords: China, economic effects, SARS, tourism resilience

Introduction
Short duration, episodic events, such as epidemic diseases, natural disasters,
civil strife and economic crises can negatively affect tourism development in the
short or long term. However, the tourism literature has been largely silent on the
specific effects of such events although it does identify the need for greater analy-
sis of economic issues (Prideaux, 1999). The effects of such events on tourism are
usually immediate and extreme, although after the interruption, tourism rapidly
returns to its long-term pattern of growth. The time required for full recovery of
tourism affected by a crisis depends on the nature of the disturbance as well as
the specifically affected tourism system (Bar On, 2001). Despite the Gulf Crisis
and War (1990–91), terrorism and other problems, tourist arrivals to WTO’s
Middle East region grew between 1990–99 (Bar On, 2001). However, stricken by
the most serious earthquake in September 1999, Taiwan’s inbound arrivals had
not fully recovered from the devastation after 11 months (Huang & Min, 2002).
After the tragic events of September 11, most analysts believed tourism would
start to recover in the USA in the second half of 2002 and spread to Europe by
2003 (WTO, 2002). However, international arrivals had not returned to the
normal level by the end of 2003, with an average 15%–20% monthly reduction
(ITA, 2003). Following the foot-and-mouth disease outbreak in 2001, overseas
tourist arrivals to Britain fell by 9%. Although annual tourist arrivals did not
return to the normal level until 2003, the monthly record showed that from June
2002 inbound tourism had fully recovered (UK, 2003). A cyclone in Vanuatu
caused 7.3%–13.8% decline in tourist arrivals in 2001–2002, and a full recovery
was still not expected by the end of 2003 (SPTO, 2003). The 2000 Fiji coup, the
1998–2000 Solomon Islands civil conflict, and the 2000 Papua New Guinea civil

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Current Issues in Tourism Vol. 8, No. 4, 2005
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SARS Crisis and Tourism Effects in China

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SARS Crisis and Tourism Effects in China 307

turbulence resulted in tourist arrival declines of 28.3%, 67.0% and 13.4% respec-
tively, with 2–3 years required for full recovery (SPTO, 2003).
Evidence exists that while crises create immediate losses for tourism, they
may have positive effects. The Asian financial crisis reduced the volume and
value of tourism, resulted in job losses and reduced the value of many
tourism-related businesses. However, it demonstrated the resilience of the
tourism sector. It exposed problems in planning, management, marketing and
financial practices; it helped rid the industry of fly-by-night operators; brought
about a major restructuring of the tourism sector in all countries seriously
affected; and set the framework for the development of a much leaner, more
aggressive and competitive tourism industry in the region (WTO, 1999). Simi-
larly, inbound tourism to the United Kingdom was severely disrupted in 2001 by
the effects of the foot-and-mouth outbreak. Yet the crisis ‘brought the industry
even closer to creating a cohesive whole that had formerly been perceived as
fragmented’, ‘led to an overall improvement in communication between all the
parties involved’, and created ‘new opportunities with non-tourism partners’
(Frisby, 2002: 99).
While tourism appears to exhibit little resistance but considerable resilience,
its recovery post-crisis does need some special strategies to cope with long-term
impacts. Hollier (1991) proposes that the only way for tourism to fight back is
through aggressive promotion of its products. This may be so, but short-term
crises often result in a need for structural adjustments. The impact of the 11
September 2001 events on world tourism brought five demand-driven changes
to the industry: lower prices, shorter duration of visits, changes in booking
habits, changes in motivation for travel, and new approaches to product and
service promotion (Tate, 2002). In the wake of the British foot-and-mouth
epidemic in 2001, Sharpley and Craven (2001) highlighted its implications for
rural tourism policy, not only in Britain but also in all countries where increasing
dependence is placed upon the developmental contribution of tourism in rural
areas. Ellison (2001) argued that by reallocating agricultural subsidies to the
recreation and tourism industries, it would be possible to enhance the role of
countryside recreation and associated tourism in a new post-productionist coun-
tryside. Some researchers emphasise the importance of crisis management plan-
ning (Henderson, 1999) and the benefit of an effective communications plan
(Herrero, 1998).
The SARS (Severe Acute Respiratory Syndrome) crisis of 2003 is an example of
a short-term, sporadic crisis that created a series of significant effects on tourism
in China. This paper reviews the growth of tourism in China and explores the
impact of SARS on this growth, especially nature-based tourism and its related
rural communities. The aim of the paper is to simply document changes and
identify the general principles that can be learnt for managing short-term crises
and the recovery process. Data presented come from government agencies and
surveys conducted in the Qinling Mountain Area in Shaanxi Province, China.

SARS as a Short-term Crisis in China


Since the first patient affected by a fatal virus was reported in China in
November 2002, SARS spread rapidly over the country, into Southeast Asia and

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308 Current Issues in Tourism

Figure 1 Diagnosed SARS patients in China, 20 April to 4 June 2003

many other parts of the world. On 2 April 2003, the World Health Organisation
(WHO) declared Guangzhou and Hong Kong in China as high-risk tourist desti-
nations. In the following days, the WHO declared Beijing, Heibei, Inner Mongo-
lia, Shanxi and Tianjin as epidemic zones, and warned international tourists not
to visit. At the same time, an increasing number of countries started to restrict
Chinese entry to their countries. From mid-April to mid-May, patients infected
with SARS increased rapidly in Beijing and the northern part of China. Media
images around the world showed vast numbers of people in the street, at hospi-
tals and at airports in face masks. Such spectacular images fuelled concern world
wide.
The SARS epidemic caught the country unprepared for treating infected
patients and containing the spread of the virus. Panic gripped the whole of
Chinese society. Government responded by suspending school classes, closing
businesses and tourist attractions, and cancelling or postponing events. These
actions greatly affected social and economic development, although in hind-
sight, appeared to be highly effective in limiting the spread of the virus.
Confirmed SARS cases increased from 1807 on 20 April to 5013 by 12 May, but
became steady by late May (MoHC, 2003). By June, the number of newly infected
patients began to decline and was down to zero by 4 June 2003. During the
five-month crisis, the total number of SARS patients was 5329 (Figure 1). After 18
August, when the last SARS patient recovered, the crisis was considered over.
Despite national and international impressions, on the scale of world trage-
dies, rapid government response resulted in SARS being a short-term and minor
epidemic. However, its economic impact on Chinese society was extreme. After
the breakout of SARS, some international economic organisations lowered the
expected economic growth in China (Zou, 2003) (Table 1).

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SARS Crisis and Tourism Effects in China 309

Table 1 Expected economic growth in China, pre- and post-SARS


Organisation Before SARS After SARS Difference
World Bank 7.5% 7.3% 0.2%
Morgan Stanley Group 7.0% 6.5% 0.5%
Goldman Sachs Group 7.5% 7.0% 0.5%
J.P. Morgan Chase & Co. 8.0% 6.4% 1.6%
Merrill Lynch & Co, Inc. 8.0% 7.5% 0.5%
Citi Group 7.6% 6.5% 1.1%
France Paris Bank 7.4% 7.4% 0.0%
Standard Chartered Bank 7.9% 7.5% 0.4%

The effect of SARS on the Chinese economy was short, but extreme. SARS
struck Chinese economic growth in the second quarter of 2003. While GDP
increased by 6.7%, growth was 3.2% lower than the previous quarter (9.9%), and
created the lowest GDP growth for the second quarter since 1992.
The effect of SARS on service industries such as tourism, transportation, retail-
ing and entertainment was significant. Growth of the tertiary sector in the second
quarter of 2003 was 0.8% compared with 6.9% in the same period of the previous
year. Passenger transportation declined by 23.9%, with aviation passengers
declining nearly 50%. Based on 13 major service industries in 29 provinces in
China, in the first half of 2003 takings decreased 14.8% compared with the same
period in 2002. Domestic sales (retailing) growth in the second quarter slowed to
6.7%: a drop of 9.2% from the previous quarter. SARS also resulted in a reduction
in sales of agricultural products with an associated decline in income of US$4.22
per person for rural residents between the first and second quarters (SSAC,
2003a). This was partly due to the inability of farm workers to get jobs in cities
during the crisis. In the third quarter of 2003, GDP growth returned to 9.1%,
suggesting that the impacts of SARS on economic growth had disappeared. Over
the first nine months of 2003, cumulative GDP growth was still high at 8.5%
(SSAC, 2003b) but lower than expected.

China as a Tourist Destination and Market


In China, tourism was not a significant area of economic activity until the
late 1970s. In the last two decades, tourism has grown rapidly in terms of
international inbound, outbound and domestic tourism. Since 1978, interna-
tional visitor arrivals have increased from 1.81 million to 97.91 million in 2002
(Figure 2). During the same time, international receipts rose from US$0.26
billion to US$20.39 billion: average annual growth of 18.1% and 19.9%, respec-
tively. In terms of domestic tourism, numbers climbed from 240 million in
1985, to 878 million in 2002: an average annual growth of 7.9%. In the last 10
years, the domestic tourist expenditure increased sharply, from US$14.89
billion in 1993 to US$46.81 billion in 2002: an average annual growth of 13.6%
(Figure 3). In 2002, gross income from tourism in China was US$67.20 billion,
or 5.4% of GDP.

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310 Current Issues in Tourism

Tourists (millions)

Figure 2 Growth in domestic and international tourism in China, 1978 to 2002


Sources: China National Tourism Administration www.cnta.gov.cn and The State Statistics Adminis-
tration of China www.stats.gov.cn

Figure 3 Domestic tourist expenditure and international receipts in China, 1978 to


2002
Sources: China National Tourism Administration www.cnta.gov.cn and The State Statistics
Administraion of China www.stats.gov.cn

General Impacts of SARS on Chinese Tourism


In 2003, the estimated reduction in tourism income because of SARS was
US$4.83–7.24 billion for Beijing (BIESD, 2003; Hai et al., 2003), and US$16.90
billion for the country (Hai et al., 2003). Although tourism growth in China grew

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SARS Crisis and Tourism Effects in China 311

in the first quarter of 2003, from mid-April both international and domestic
tourism growth stalled, and all tourism-related industries, such as hotels, restau-
rants, entertainment, transportation, retailing and other services, suffered.

International tourism
In the first two months of 2003, the number of international inbound tourists
was 9.2% above the same period in 2002, and tourism income increased by 14.0%.
After the SARS outbreak, in March 2003, the number of international inbound
tourists (including foreigners, overseas Chinese from Hong Kong, Macao and
Taiwan) decreased 6.5%, compared with the same period in 2002: the first
monthly decrease in the past 10 years (Figure 4). In April, international arrivals
remained down on previous years, and travel agencies throughout the country
ceased organising international tourism. For example, from 18 March to 18 April,
Guilin City, one of the better-known tourist destinations in China, experienced
the cancellation of 3850 international inbound tourist groups (Yang & Meng,
2003). Beijing received 116,000 international visitors in April: a decrease of 59.9%
on the same month in 2002 (CNW, 2003).
In May, arrivals reached their lowest point with 0.34 million foreigners and
5.44 million overseas Chinese: a 70.0% and 31.0% decrease compared with the
same month in 2002. On 29 May 2003, when SARS was controlled, the arrival of
an Australian tourist group officially marked resumption of international inbound
tourism in China. By August 2003, tourist arrivals were close to 2002 levels and by
the end of 2003 they became aligned. International tourism receipts paralleled this
trend but were slightly slower in returning to 2002 levels (Figure 5).
Outbound tourism almost ceased in May, including visits to Hong Kong,
Macao and Taiwan. By 4 June 2003, 126 countries had taken measures to restrict
Chinese citizen entry to their countries (MoFAC, 2003). Although some

Figure 4 Monthly international tourist arrivals in China, 2002 and 2003


Source: The official website of China National Tourism Administration www.cnta.gov.cn

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312 Current Issues in Tourism

Figure 5 Monthly receipts in China, 2002 and 2003


Source: China National Tourism Administration www.cnta.gov.cn

outbound tourist groups were organised in April, the number of groups and
tourists significantly decreased. In April, 496 outbound tourist groups (10,735
tourists) departed from Beijing, a decrease of 54% (55.6% decrease in tourist
numbers) compared with the same month in 2002 (CNW, 2003). Also in April,
1.146 million individual Chinese travellers departed the country, a decrease of
12% compared with the same month in 2002 (CTW, 2003).

Inter-area tourism
During the initial stage of the SARS epidemic, its impact on tourism emerged
mainly in southern China. After 20 April, when the Chinese Government
updated the SARS epidemic data and cancelled May leave to limit the spread of
the epidemic, the fear of SARS spread from southern China to throughout the
country, and public confidence in tourism was severely compromised.
In 2003, the Office of Beijing Youth Press, in cooperation with the Research
Department of Public Opinion of Shaohai Marketing Research Company, inves-
tigated SARS effects on tourism activity in Beijing, Shanghai and Guangzhou (Li

Table 2 Cancelled travel and destinations because of SARS (n = 619)


Percentage of interviewees
Travel between Jan.–Jun. cancelled 46.2%
Planned to go to:
· other provinces 69.6%
· home province 53.8%
· Hong Kong or Macao 40.2%
· other countries 12.2%
Source: Complied from Li and Ji (2003)

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SARS Crisis and Tourism Effects in China 313

Table 3 Net profit and change in share price for selected tourism-related busi-
nesses in 2003
Corporation Net profit Change in net Closing share price
(US$ million) profit during the SARS
(US$ million) epidemic (US$)
A B C C–A C–B 31 March 30 Change
2nd 1st 2nd June
quarter quarter quarter
of 2002 of 2003 of 2003
Wangfujin 0.75 2.88 –2.70 –3.44 –5.58 0.75 0.69 –7.57%
Eastern Aviation –2.35 –20.69 –150.84 –148.49 –130.15 0.61 0.52 –15.42%
Huangshan Tourism 3.94 –2.75 –3.89 –7.83 –1.14 1.16 1.01 –13.38%
Youth Travel Agency 4.94 1.20 –0.65 –5.59 –1.85 1.14 1.12 –2.00%
Zhangjiajie 1.02 0.24 0.07 –0.95 –0.17 0.95 0.81 –15.34%
Oriental Hotel 0.88 2.46 –5.57 –6.44 –8.03 0.74 0.63 –14.87%
Xi An Tourism 0.29 0.02 –0.44 –0.73 –0.75 1.03 0.82 –20.35%
Emeishan 1.57 –0.93 0.45 –1.13 1.37 1.26 1.02 –18.76%
Guilin Tourism 2.06 0.53 –0.42 –2.48 –0.96 1.99 1.99 0.12%
Jingxi Tourism –1.86 –1.44 –0.93 0.93 0.52 1.28 1.09 –15.07%
Xi An Food Services 0.63 0.38 –0.28 –0.91 –0.66 1.39 1.21 –13.43%
Average 1.08 –1.65 –15.02 –16.10 –13.40 1.12 0.99 –11.51%
Source: Profit data from officially accredited website www.cninfo.com.cn and share price data from
www.stockstar.com

& Ji, 2003). The interviews indicated that 46.2% of interviewees cancelled their
tourism plans because of SARS. Of these, 69.6% said they had planned to go to
other provinces (Table 2). In Guangzhou, where SARS occurred early in the
epidemic, this figure was as high as 73.3%.
Tourism-related businesses experienced a collapse in profits during the
second quarter of 2003 (Table 3). Data from 11 tourism-related corporations
show that in the second quarter of 2003 there were only two corporations achiev-
ing even a small profit. The average deficit was US$15.02 million: US$13.40
million more than the first quarter deficit of 2003 or US$16.1 million less than the
average profit in the second quarter of 2002.
Share markets immediately responded to the effect of SARS on economic
growth. The share price of tourism and companies in related industries, such
as transportation, retailing and services, fell sharply (Table 4). In the 58
trading days from 1 April to 30 June 2003, Shanghai Commercial Industry
Share Index, which represents commercial and services industries, fell by
10.1% from 1332.69 to 1197.97. In the same period, Shanghai Securities Index
was 1.6% down from 1510.58 to 1486.02, Shenzhen Services Industry Share
Index dropped by 12.6% compared with 3.9% for the Shenzhen Securities
Index. For the 11 tourism-related companies listed in Table 3, their share
prices dropped an average of 11.5%: much higher than the Securities Indexes
(Tables 3 and 4).
On 2 June 2003, the Ministry of Labour and Social Guaranteeing reported that
SARS would cause the loss of 1.27 million jobs and have greater impacts on
employment than on economic growth (Li, 2003). In terms of industries, impact

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Table 4 Effect of SARS on Chinese securities indices and share price for selected
tourism businesses
Indices for Chinese securities markets Closing index (price) Change
31 March 2003 30 June 2003
Shanghai Securities Index 1510.58 1486.02 –1.63%
Shanghai Commercial Industry Share Index 1332.69 1197.97 –10.11%
Shenzhen Securities Index 423.82 407.36 –3.89%
Shenzhen Services Industry Share Index 442.69 386.84 –12.62%
Average change in share price of the 11 1.12 0.99 –11.51%
corporations in Table 3 (US$)
Source: www.stockstar.com

on employment would mainly occur in tourism, transportation, food services,


hotels and entertainment.

SARS Impacts on Nature-based Tourism Areas and Local


Communities
Most natural attractions such as nature reserves, forest parks and scenic areas
are located in rural areas or city suburbs. In China, these were far from the centres
of the SARS epidemic but had poor epidemic control systems. To constrain
SARS, governments temporarily closed most recreation areas and stopped all
tourism activities, including study tours. Thus, businesses that relied on
nature-based attractions closed. The SARS epidemic coincided with the tourism
peak season, hence tourism businesses suffered significant losses and many of
them, including some well-known companies such as Emeishan, Huangshan
Tourism, and Zhangjiajie, reported huge financial deficits or greatly reduced
profits (see Table 3).
Between July and August 2003, accommodation and food service businesses
around forest parks in Qinling Mountain Area in Shaanxi Province were
surveyed on SARS impacts. Medium and small-scale businesses reported an
average US$40.51 thousand decline in income as a result of SARS: a 23.6%
decrease in annual income (Table 5). The size of the losses varied with business
scale. Nine businesses with an annual income of less than US$100 thousand
experienced a 40.53% decline in annual expected income as a result of SARS,
while three businesses with annual incomes between US$100–300 thousand
experienced losses of around 42.5% of expected annual income. Three businesses
with annual incomes in excess of US$300 thousand experienced a loss of just
15.3%. The results suggest that small and medium-sized businesses had lower
capacity to resist the impact of the SARS crisis, and large businesses were better
able to adjust to the crisis and were possibly better equipped to weather the
storm.
The reduced tourism-related income created significant effects on local
production and life in rural areas. In 2002, net income for rural residents in China
was US$298.85 per person, of which US$55.65 or 17.7% was for manual labour
effort, and growth in labour effort income contributed 41.8% to the growth of
total net income for rural residents (Xu, 2003). When the SARS epidemic broke

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Table 5 SARS impacts on medium and small tourism businesses in nature-based


tourism areas
Business scale Businesses Average business income (US$’000) Reduction
by annual interviewed In 2002 Expected Predicted Predicted (%)
income (US$’000) without with SARS reduction
SARS in 2003 in 2003 from expected
Small ( < 100) 9 21.59 30.92 18.39 12.53 40.53
Medium (100–300) 3 157.31 175.02 100.58 74.44 42.53
Large ( > 300) 3 587.41 591.40 500.90 90.50 15.30
All businesses 15 161.89 171.84 131.33 40.51 23.57

Table 6 Economic impacts from SARS on tourism-related communities


Households Households All
involved directly involved indirectly households
in tourism in tourism interviewed
Interviewed household number 33 17 71
Income reduction (US$) 11,164.75 1291.49 12,456.24
Average reduction (US$ per 338.33 75.97 175.44
household)
Average income in 2002 (US$ 909.68 557.56 751.00
per household)
Reduction in income (%) 37.19 13.63 22.36

out, around 100 million farm workers had temporary employment in the cities,
but by early June, 8 million had returned to rural areas. This change caused a loss
of US$4.83 billion in income for rural residents (Bai, 2003). At the same time, a
large number of rural labourers were seeking employment in the secondary or
tertiary sectors, but employment opportunities did not exist because of closure of
tourism-related businesses.
Interviews with 71 households in Qinling Mountain in Shaanxi Province indi-
cated that in the second quarter of 2003, SARS caused the average annual house-
hold income to decline to US$175.44, a 22.36% reduction in what was expected
(Table 6). Households directly involved in tourism reported greatest reductions,
averaging a decrease in income of US$338.33, 37.19% of annual income in 2002.
Households indirectly involved in tourism experienced a smaller decrease, in the
order of US$75.97 or 13.63% of their income in 2002. Since these households have
a low annual income (for example, US$557.56 in 2002), the losses from SARS seri-
ously affected individual, family and community well-being. Significantly, and
unlike other commercial products, reduction in tourism sales is absolute and not
recoverable; hence losses are absolute.

Nature-based Tourism Recovery after SARS


Traditionally, the one-week holiday in May is one of the most profitable
periods for tourism businesses. With two other one-week holidays in October
and during Chinese New Year, they are called ‘Gold Tourism Weeks’. The ‘Gold

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Table 7 Tourism in ‘Gold Tourism Week of May’
Year Annual domestic Tourism in ‘Gold ’Gold Tourism Week of May’/
tourist expenditure Tourism Week of May’ Annual domestic tourism
Tourist Total Tourist Total Percentage of Percentage of
number expenditure number expenditure tourist number expenditure
(million) (US$ million) (million) (US$ million)
2000 740 38.14 46 2.19 6.21 5.73
2001 784 42.54 74 3.48 9.44 8.18
2002 878 46.81 87 4.00 9.91 8.54

Tourism Week of May’ usually attracts the largest number of domestic tourists
and related domestic tourist expenditure. From 2000 to 2002, tourist numbers in
the ‘Gold Tourism Week of May’ climbed from 6.2% of annual tourist numbers to
9.9%. Total expenditure rose correspondingly from 5.7% to 8.5% (Table 7).
However, in 2003, the SARS epidemic resulted in almost no tourism during the
‘Gold Tourism Week of May’.
During the ‘Gold Tourism Week of May’ in 2003, Beijing received 190,000 visi-
tors and tourism-related income of US$30.18 million, down by 95.5% and 99.1%
respectively when compared with the same period in 2002 (Zheng, 2003). Entry
fees for parks and gardens in Xi’an City declined by 97.7% (NOSPSA, 2003).
Tourist numbers to Sanya City declined by 95.9% and entry fees for attractions
decreased by 94.6% (HCoXW, 2003). Taibai National Forest Park in Shaanxi
Province received about 1000 tourists during the week, compared to 20,000 in
same period in 2002; down by 95%.
From 9 July 2003, when the China National Tourism Administration issued an
‘Announcement on the recovery of inter-area and international tourism activi-
ties’, tourism began to recover. In addition, community confidence was high that
tourism recovery would be rapid and that tourism would quickly return to
pre-SARS levels (Table 8) (Li & Ji, 2003). In reality, tourism did recover during the
first ‘Gold Tourism Week’ after SARS. While all tourism indicator records were
broken in the ‘Gold Tourism Week of October’ 2003, tourism recovery merely
returned to normal without a compensating ‘catch up’ in tourism activity. The
annual growth in the ‘Gold Tourism Week of October’ was 11.5% for tourist
numbers and 13.1% for total expenditure, about half of the average growth of
recent years (Table 9). Information collected from selected tourist destinations
indicates that during the ‘Gold Tourism Week of October’ tourists visiting capital
cities increased more slowly than visiting natural areas (8.2% vs. 16.0%) (Table
10).

Table 8 Community expectation of tourism recovery after SARS crisis (n = 619)


Will tourism recover after SARS? Percentage
Definitely 27.1
Probably 42.5
Will not 30.4

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Table 9 Tourism in ‘Gold Tourism Week of October’ since 2001


Year Tourist Annual Total Annual Expenditure Annual
number growth expenditure growth per tourist growth
(million) (%) (US$ billion) (%) (US$/person) (%)
2001 63.97 3.01 46.98
2002 80.71 26.17 3.69 22.89 45.75 –2.57
2003 89.99 11.50 4.18 13.07 46.35 1.32
Source: China National Tourism Administration www.cnta.gov.cn

Table 10 Tourists to selected tourism areas during the ‘Gold Tourism Week of
October’
Number of Number of Change in
tourists in 2002 tourists in 2003 tourist numbers
(‘000) (‘000) (%)
Wuyishan Mt. 130.2 143.7 10.4
Putuo Mt. 93.8 99.9 6.5
Qianshan Mt. 57.7 71.0 23.0
Zhangjiajie City 393.0 440.0 12.0
Huanguoshan Mt., Dalian 73.3 139.9 90.8
Jiuzhaigou 81.4 81.6 0.2
Jiuhuashan Mt. 68.9 65.7 –4.6
Total for above seven natural areas 898.3 1,041.8 16.0
Beijing 3,400 3,760 10.5
Shanghai 3,650 3,800 4.1
Tianjin 3,560 3,920 10.2
Total for above three capital cities 10,610 11,480 8.2
Whole country 80,710 89,990 11.5
Source: China National Tourism Administration www.cnta.gov.cn

Table 11 Willingness to resume tourism activity post-SARS (n = 619)

Cancelled Planned to travel in Did not plan to Had not


tourism the second half of the travel in the second decided
plans for year half of the year
Jan–June
Percentage of answers 46.2% 22.8% 43.8% 33.4%
Planned to go to other 69.6% 67.4%
provinces
Planned to travel within 53.8% 36.2%
their home province
Planned to go to Hong 40.2% 16.3%
Kong or Macao
Planned to go to other 12.2% 10.6%
countries

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318 Current Issues in Tourism

The investigations reveal changes in consumer willingness to experience


tourism. Interviews with 619 residents in Beijing, Shanghai and Guangzhou (Li
& Ji, 2003) indicate consumer resistance to resuming tourism activity post-SARS.
Although 46.2% of interviewees cancelled their tourism plans between January
and June 2003 because of SARS, only 22.8% planned to resume their tourism
activity in the second half of 2003; 43.8% said they had cancelled totally; and
33.4% remained undecided (Table 11). Interviewees who said they would travel
in the second half of the year remained enthusiastic and positive towards their
trip to other domestic provinces but not so for local provinces and overseas.
Tourists (n = 182), interviewed on-site after the epidemic, indicated that SARS
affected actual travel activity by causing postponement of their trip (37.9%),
having no effect (33.0%), and contributing to the decision to travel to a
nature-based recreation area because SARS had reminded them of the impor-
tance of health and nature (11.0%) (18.1% gave no answer).

Conclusions and Discussion


Short-term crises can be categorised by the nature of the crisis, its effect on
infrastructure and the resultant recovery period (Table 12). The nature of the
crisis can be divided into five categories: human epidemic, animal epidemic,
destructive weather conditions and other natural disasters, civil strife and
violence, and war or terrorism. The different nature of the crises creates different
effects on tourism, and the rate of recovery. For crises involving infrastructure
destruction, the key management issue is to have in place a reconstruction strat-
egy. Rapid media uninterest means that normal marketing effort will largely
restore pre-crisis levels of tourism. However, where the crisis includes a percep-
tion of risk, especially health, more comprehensive strategies appear necessary.
This includes management of the media, especially images displayed during the
crisis. Then post-crisis, aggressive marketing is needed that does not remind
target markets of the crisis, but presents an image of ‘business as usual’. SARS, as
a human epidemic, affected tourism rapidly by reducing consumer confidence in
health infrastructure, but tourism recovered rapidly when the crisis was over.
While SARS resulted in some deaths and caused significant economic losses, it
became a crisis because of lack of preparedness and intense media attention.
Basically, SARS was a short-term perturbation for tourism and the entire
economy. In hindsight, the Government’s response of closing schools, shops and
cancelling public events was perhaps an over reaction, but also in hindsight, it
highlights the importance of immediate response to health issues as soon as they
are identified. Therefore, an effective crisis management mechanism is neces-
sary, at differing levels, to address the crisis itself, but also to effectively address
media interest to maintain community and market confidence, allay fears and
minimise rumours and false information distribution.
The SARS crisis had an immediate and highly significant effect on Chinese
economic growth but recovery was rapid. It had major negative effects on the
retail sectors and caused huge financial losses in the tourism sector through the
effects on both international and domestic tourism. SARS created severe impacts
on rural areas, especially where local households relied on employment in
tourism-related businesses or on physical labour efforts in urban areas. This

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SARS Crisis and Tourism Effects in China 319

Table 12 Short-term tourism crises and their effects


Nature of crisis Effect Recovery time
Human epidemic Rapid decline in arrivals. Rapid after media stories cease and
Significant media interest. health organisations announce the
Reduction in consumer crisis is over.
confidence in health Continuation of precautionary action
infrastructure. by tourists.
Dependent on perception of risk.
Example 1: 2003 SARS Rapid 25–70% decline in 3–7 months (source: this paper)
epidemic, China international tourist arrivals, and
50–90% decline in domestic tourists
Animal epidemic Reduction in arrivals, increases if Rapid once epidemic is controlled.
link to human health confirmed. Some sustained consumer behaviour
Indirect media interest. changes – a precautionary action.
Dependent on perception of risk.
Example 2: 2001 9% decline in overseas arrivals 1–2 years, although terrorism threat
foot-and-mouth may be slowing complete recovery
outbreak, UK (source: Frisby, 2002; UK, 2003)
Destructive weather Severely damaged tourism Dependent on infrastructure
conditions and other infrastructure. destruction, especially public services
natural disasters Rapid decline in arrivals. (e.g. power and potable water).
Transitory media interest. Slow but responsive to
reconstruction rate.
Enhanced by marketing.
Example 3: 2001 7.3%–13.8% decline in tourist 2 years plus (source: SPTO, 2003)
cyclone, Vanuatu arrivals
Example 4: 1999 15% decline in tourist arrivals 11 months (source: Huang & Min
earthquake, Taiwan 2002)
Civil strife/violence Decline dependent on level, Dependent on extent of
location and extent of strife. infrastructure destruction and length
The longer the strife continues, of time the strife continues.
the greater the effect. Delayed, dependent on perceived
Sporadic media interest. level of risk.
Responsive to media images/reports
of civil harmony.
Example 5: 2000 coup, 28.3% decline in tourist arrivals 2–3 years (source: SPTO, 2003)
Fiji
Example 6: 1998–2000 67.0% decline in tourist arrivals 3 years plus (source: SPTO, 2003)
civil conflict, Solomon
Islands
Example 7: 2000 civil 13.4% decline in tourist arrivals 3 years plus (source: SPTO, 2003)
turbulence, Papua
New Guinea
War or terrorism Severely damaged tourism Dependent on:
infrastructure.
· extent of infrastructure destruc-
Rapid decline in arrivals. tion, length of time the war or
Reduction in consumer terrorism continues;
confidence in security. · rate of infrastructure re-estab-
Continuing media interest. lishment.
Slow but responsive to governmental
endeavours to rebuild consumer
confidence in security.
Example 8: 11th 32.56% decline in non-resident 2 years plus (source: ITA, 2003)
September 2001 arrivals
terrorism, USA

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320 Current Issues in Tourism

finding suggests that while cities and major tourist destinations may suffer huge
financial losses in absolute terms, small rural communities are more significantly
impacted in relative terms. Since the losses cannot be recouped, recovery strate-
gies should probably include direct grants or subsidies to support small busi-
nesses in such circumstances. Therefore, from a planning perspective, the
vulnerability of rural regions dependent on tourism must be a major consider-
ation for tourism planners to diversify markets, and for strategic planners to
diversify industry. That is, for regional economic planning, tourism’s low resis-
tance to crises means a balanced portfolio of industries is desirable to minimise
regional economic impact. However, tourism’s resilience means that it can be a
potent force in stimulating post-crisis recovery.
In this short-term health crisis, the most affected segments were international
and inter-area tourism. The crisis obstructed tourist flows from overseas and
between areas, and halted tourism growth. Therefore, how to buffer the effects of
unpredictable, major short-term crises becomes a major strategic consideration
for local, regional and national tourism planners, especially in destinations
dependent on international and inter-area tourism. To extend tourist sources,
widen the business range and reduce the difference in tourist numbers between
peak and off-peak seasons are important considerations for tourism-related
businesses.
Small and medium-sized businesses were more vulnerable to SARS impacts.
How to enlarge the scale of tourism businesses to strengthen their capacities to
reduce risk is a necessary consideration for crisis management in tourism devel-
opment. From a policy perspective, enlargement may mean fostering partner-
ships between businesses to reduce exposure to all forms of economic downturn.
Tourism-based economies suffered severe impacts. In some areas, the
economic contribution of the tertiary sector accounts for a large percentage of the
economic system with tourism dominating this sector. In this kind of unbalanced
economic system, any oscillation in tourism development necessarily influences
the whole system. Therefore, when developing new tourism areas, it is impor-
tant to design a balanced economic structure, including not only tourism as a
pillar component but also other sectors to strengthen the system’s capacity to be
resistant to unpredictable short-term perturbations. For social groups with lower
risk resistance capacity, such as local households in tourism areas, there is a need
to encourage participation in tourism services and also involvement in other
economic opportunities to spread risk. The importance of conceptualising and
planning tourism as a system is amplified by the SARS experience. While
tourism can be the focus for economic growth, development of support services
delivered by other industries will not only reduce financial leakage from an area,
but will also buffer communities from short-term perturbations and contribute
to the sustainability of the community and tourism.
Although rapid recovery of post-crisis tourism is expected, a rational recovery
strategy is necessary. Tourism resources are ultimately non-renewable and it is
impossible to compensate for tourism flow interruptions. Trying to compensate
necessitates overuse of tourism resources to their possible detriment. Therefore,
sustainable tourism after a crisis and loss of income requires a recovery strategy
that is a progression to previous sustainable levels rather than one that catches
up on lost revenue through increased tourist traffic. Strategically, in the recovery

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SARS Crisis and Tourism Effects in China 321

process after a crisis, it is important to manage tourism recovery in an ordered


sequence. Normally, with gradual epidemic control (in the case of SARS), busi-
ness travel will gradually resume, and internal, external and international
tourism will recover sequentially. Hotels and restaurants will start up in
response to local, external and international market demand. During these
sequences, there is need for specific recovery policies and strategies, freely avail-
able visitor trend information and well-ordered implementation. Otherwise,
recovery will be delayed by rumour, confusion and disorder, leaving tourists
and tourism businesses ill informed to make necessary arrangements and strate-
gic decisions.
However, the SARS crisis opened a window of opportunity to modify tourism
development. New motivations to travel to nature-based areas became evident
with SARS. Natural landscapes, including nature reserves, forest parks and
other related areas, are likely to be the target destinations for this change in travel
motivation. Although the trend might not be sustained, it remains a potential
marketing emphasis that could invigorate and expand product types in rural
areas.

Correspondence
Any correspondence should be directed to Benxiang Zeng, University of
Queensland, School of Natural and Rural Systems Management, Gatton,
Queensland 4343, Australia (b.zeng@mailbox.uq.edu.au).

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