Counting the most important cost of a health crisis

by Martin Moodie |
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Martin Moodie

Martin Moodie is the Founder & Chairman of The Moodie Report.

First things first. While the job of every single executive in the travel retail and aviation sectors is to assess the commercial impact of the novel coronavirus outbreak (and in our case to report on it), we are first and foremost dealing with a human crisis – and an increasingly tragic one.

As I write this Blog, 106 people have died as a result of 2019 Novel Coronavirus (2019-nCoV), a toll that is likely to rise much higher before the threat recedes.

“The personnel of CDFG are safe at present, please rest assured. Thanks again for your concern,” a China Duty Free Group (CDFG) executive told me earlier today in relation to the company’s closure on Sunday of the CDF Mall in Haitang Bay in Sanya, Hainan Island on Sunday, a response to the worsening outbreak. It was a nice note, reaffirming what really matters most.

China Duty Free Group announces the temporary closure of the CDF Mall on Sunday

CDF Mall is one of Asia’s and the world’s most important duty free locations, generating the lion’s share of the CNY13.61 billion (US$1.98 billion) in sales on the island last year – a whopping +35% year-on-year increase. CDFG has also closed its airport stores at Xi’an Xianyang International and Hangzhou Xiaoshan International airports.

These are the right moves by a retailer unwittingly caught in the front line of a worsening health nightmare.

As I have told my team, it is a time where we must excel as a news and business intelligence service but function prudently as a business

Leading Korean travel retailer Lotte Duty Free, whose business is hugely reliant on Chinese visitors, has also taken action to ensure the safety of customers and staff in the face of the threat with a series of emergency measures at its stores.

Lotte Duty Free staff at the information desk on the tenth floor of the Seoul Myeong-dong store, as increased protections against the virus are introduced

Lotte has set up an emergency response committee, chaired by CEO Lee Kap, to minimise the risk of the outbreak spreading. The retailer is checking employees for fever daily; making masks mandatory for store staff and available for customers; ensuring regular disinfection of its stores; and expanding the number of available hand sanitisers available in its stores. Special leave is also permitted for staff who are pregnant or have underlying illness conditions.

These are serious times in our industry. I covered (and ran a business) through the SARS outbreak of 2003 and know what commercial carnage follows in the wake of any epidemic-related travel downturn. As I have told my team, it is a time where we must excel as a news and business intelligence service but function prudently as a business. There are rocky weeks and perhaps months ahead for our industry but ultimately they pale in comparison to the human cost of such a crisis.