Counting the cost of Sars

PUBLISHED : Saturday, 12 April, 2003, 12:00am
UPDATED : Saturday, 12 April, 2003, 12:00am

One virus, 1,059 infections, 32 deaths, $2.5 million a day in hospital costs, 164 fewer flights into HK a day, 26,000 fewer air passengers a day entering HK, 97,500 fewer train passengers a day crossing Lowu border, 10,000 firms facing closure

The spread of Sars accelerated yesterday as Hong Kong saw its victim toll jump through the 1,000 barrier, with 61 new infections representing the biggest daily rise in 10 days.

And the economic cost of the outbreak is also spiralling.

In the tourism sector alone, a 10 per cent decrease in the number of visitors to Hong Kong in the last two weeks of March cost the industry an estimated $300 million. On the basis of last year's figures and per capita spending of $4,532, tourism losses will soon escalate to billions if arrivals drop by the 30 to 50 per cent predicted by some industry sources.

The industry's woes deepened as the World Health Organisation [WHO] made it clear last night that its travel advisory against visiting Hong Kong and Guangdong - a precaution against severe acute respiratory syndrome (Sars) - will not be lifted for at least another 30 days.

Tourism, which has been one of the fastest-growing sectors of the economy, was forecast to grow more than 8 per cent this year.

The sector accounted for 5.7 per cent of Hong Kong's gross domestic product [GDP] in 2001 and employed 10.7 per cent of the total workforce.

Arrival numbers dropped 10.4 per cent in the last 16 days of March 2003, compared to the same period last year. These figures are expected to drop further, as the WHO travel advisory was only issued on April 2.

Spokesman for the Hong Kong Tourism Board Simon Clennell said that while things were expected to get worse, it was 'not a case of no visitors arriving at all'.

'We don't have any hard figures. Some hotels say occupancy is down to 3 per cent, others say they are still doing okay. We don't have figures for April yet but obviously they will be substantially down [on last year's figures],' he said.

The number of flights cancelled each day is now around 164, representing more than 30 per cent of all flights previously arriving at Chek Lap Kok airport, according to a spokesman for the Airport Authority. This means, on the basis of an average 160 people on board each flight, 26,000 fewer plane passengers entering Hong Kong each day.

The loss in landing fees is estimated at a minimum of $3.5 million per day.

The story is much the same on public transport, with the Kowloon-Canton Railway Corporation [KCRC] reporting a drop of 29 per cent in domestic and cross-border patronage in the first week of April compared to last year.

'The average daily number of domestic passengers last year was 559,000. This is now 23 per cent lower,' a spokeswoman said. In the domestic sector alone, 128,570 fewer passengers a day would amount to a loss of about $1.3 million, based on a $10 fare.

About 10,000 small businesses could face closure because of the postponement of business fairs and delayed orders because of the Sars outbreak, one industry expert warned.

Hong Kong Small and Medium Enterprise Association vice-president Jimmy Wan said Hong Kong's 100,000 small companies, which largely rely on trade fairs to get business orders, were facing tough times.

Mr Wan said: 'Overseas buyers are unwilling to visit Hong Kong because of health concerns, but small companies have no money to travel to get business. I estimate 10 per cent of them will be forced out of the market if the virus cannot be settled within these two months.'

While retailers generally are despondent about the slump in trade, supermarkets stand apart and continue to make a profit. 'We are experiencing a short-term increase in business because more people are staying at home and cooking at home,' said Wellcome's marketing development manager Diane Chiu.

She would not divulge details of the percentage increase in trade, but said the strongest demand was for fresh products, such as meat, vegetables and fruit, as well as household cleaners.

Aside from the flow-on effect to industry, the bill for treating patients suffering from Sars is in itself staggering.

About 850 cases are currently being treated in hospitals around Hong Kong, which, at an average daily cost of $3,000 per bed, amounts to $2.5 million each day.

This does not take into account intensive-care costs and other medical expenses.