Indonesia' tourism sector has suffered losses of at least US$1.5 billion since January amid growing fears of the pandemic, said the association - Photo: Special

JAKARTA (TheInsiderStories) – Indonesia’ tourism sector has suffered losses of at least US$1.5 billion since January amid growing fears of the pandemic, said the association. Total estimated losses $1.1 billion occurred as a result of cancelations made by Chinese tourists and the remaining $400 million from other countries.

The statement loud by chairman of the Indonesia Hotel and Restaurant Association, Hariyadi B. Sukamdani as quoted by local media early this week. According to him, the fiscal stimulus has released by the government with total amount Rp10.3 trillion ($710.34 million) so far not give impact to these sector. 

In the lates report, Moody’s Investors Service rated coronavirus spread will significantly slow economic growth, which will in turn amplify its financial impact on several key corporate sectors, especially tourism. While, IHS Markit expects, the aggregate dividend payouts from airlines in Asia Pacific (APAC) to drop 20.7 percent to $1.4 billion in 2020 from a year ago, amid stark earnings prospects over the short term.

“Sectors reliant on trade and the free movement of people are most exposed, such as passenger airlines, shipping, and lodging & leisure, which includes cruise lines and restaurants,” said Benjamin Nelson, a Moody’s VP in a written statement released today (03/17).

Global automakers are also under great pressure because of their reliance on international supply chains, while gaming and non-food retail in certain regions are also exposed to supply chain disruptions, and the inevitable decline in foot traffic.

“Companies’ ability to withstand the effects of the virus will depend on its duration, and we caution that as events unfold very rapidly on a daily basis, our assessment of exposure will change over time,” adds by Richard Morawetz, a Moody’s VP in the same report.

Moody’s assessment is based on its baseline scenario, which assumes a normalization of economic activity in the second half of the year, and the ability of some companies to withstand the effects of the virus will depend on its duration. Moody’s downside scenario factors in a jump in cases and public fear that the virus will not be contained in the first half of 2020, leading to extensive and prolonged travel restrictions and quarantines, along with a prolonged slump in commodity prices.

While, IHS Markit rated, airlines typically adhere to performance-linked dividend policies and they have been greatly hit by the COVID-19 outbreak. The plunge in dividend payouts is mostly attributed to two big players influencing the overall dividend trajectory.

Cathay Pacific Airways suspended its dividends and Singapore Airlines is expected to slash its final dividend per share by 45.5 percent in 2020 compared to a year ago. China Airlines and Korean Air, which were already experiencing sluggish financial performance prior to the outbreak, are also expected to suspend their dividends over the short term.

Qantas remains the only airline with a projected increase in dividends, under IHS Markit coverage. The Australian flag carrier signaled that the earnings before interest and tax for the second half of 2020 could decline at least AUS$100 million due to the impact of COVID-19 outbreak.

Qantas is likely to stick to its policy of paying base dividends as it has the flexibility to distribute stable dividends amid earnings volatility. Its final dividends payout is forecast to increase by 3.8 percent on a per share basis from a year ago.

Written by Staff Editor, Email: theinsiderstories@gmail.com