SARS update: gloom in Asia continues

Anna Fenton

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****DFNI eXTRA**** Asia remains in the grip of the SARS virus as China admitted to 448 cases in Beijing last Monday, as opposed to the 27 cases previously revealed

More than 20 have apparently now died in the mainland capital but doubts remain about the figures. Unconfirmed rumours suggest the city may soon be closed to outsiders as a quarantine measure. 

Unconfirmed reports suggest Beijing Capital International Airport itself has suffered up to 19 cases of SARS among its staff so far, with at least one member of staff working in a landside shop. As yet there are no confirmed cases airside.  Nevertheless, passengers report that areas of the duty-free shopping area have been closed off for disinfection, the usual measure when a case has been found. The airport authority, which moved its headquarters away from the airport two weeks ago, was unavailable for comment.  China Duty Free Group's Beijing employees are either working from home or banned from going to the staff canteen or meetings if they go to their office.

Passenger numbers at Beijing are down 60% but retail turnover is down by as much as 90% year-on-year as passengers hurry through departures to get to their planes.

The situation in Hong Kong is also critical, with 40% of scheduled flights cancelled, or 192 of the usual 550. Passenger numbers are down by up to 60%. New SARS cases in Hong Kong are running at 20-30 daily, with 5-7 deaths.  Singapore Changi airport, meanwhile, has reported passenger traffic down by nearly 40%. 

Nuance-Watson (HK) managing director Alessandra Piovesana told TRW: "As a policy, we want to maintain merchandising standards up to our normal level even in the current situation. The store appearance and staff service are not diminished in any way. As for promotions, we have streamlined our activities to simple offers with savings. We also have extended the same saving offers to all Airport City workers."

Sky Connection director merchandising and buying Simon Au said: "We are stepping up our promotions to increase sales to every individual passenger entering our shops. Our most serious problem is the drastic drop in the number of passengers using the airport."

When asked how the SARS outbreak would affect how the company bids in the current Perfumes and Cosmetics tender at Hong Kong, Nuance-Watson's Piovesana said: "This concession is concerned with future business. If we opt to tender, it will be because we trust that beyond SARS, the future of Hong Kong International Airport remains promising. So we do not envisage any reconsideration of our tender approach to Perfumes and Cosmetics in the light of SARS."

Regarding Airport Authority Hong Kong's decision to lower rents next week, Piovesana would not reveal what reduction they were seeking. "The airport authority has made a big leap forward for its next concession, applying a passenger related formula. The authority has also proved to be sensitive to situations of "force majeure" which have adversely affected operators at HKIA. In this light, we trust that any measure the authority adopts will be sensible."

Sky Connection's Au added: "We are sure the airport recognises the substantial drop in passengers and will be fair to all tenants."