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COVID chaos has shed light on many issues in the Australian childcare sector. Here are 4 of them

<p>Thousands of families are without childcare as <a href="https://www.acecqa.gov.au/resources/national-registers/service-temp-closure-info">hundreds of services</a> have had to close due to a surge in COVID cases, while many more are running at reduced capacity. Many parents dread another <a href="https://theconversation.com/from-covid-control-to-chaos-what-now-for-australia-two-pathways-lie-before-us-174325">chaotic year</a> that may have them jugging <a href="https://thesector.com.au/2022/01/06/executive-functioning-is-much-harder-for-children-from-chaotic-households/">childcare and work</a> at home.</p> <p>The government <a href="https://theconversation.com/the-government-has-again-rescued-the-childcare-sector-from-collapse-but-short-term-fixes-still-leave-it-at-risk-166568">rescued the childcare sector</a> several times over the past two years – making services eligible for a portion of their pre-pandemic payments as families pulled their children out. But these measures were only temporary.</p> <p>The childcare system was already busting at the seams before COVID. I led an <a href="https://uneprofessions.az1.qualtrics.com/jfe/form/SV_38j3CdPsHnM8l81">international survey</a> in 2021, during the pandemic, in which early childhood educators’ gave ideas on how their government could support their work. In Australia, 51 educators participated.</p> <p>Here are four preexisting the issues that have <a href="https://womensagenda.com.au/latest/early-childhood-directors-are-carrying-an-exhausting-load-during-covid-19-even-beyond-major-outbreaks-research/">increased during the pandemic</a>.</p> <h2>1. Staff shortages</h2> <p>Currently, many childcare services are closed and others are operating at reduced capacity because staff are either sick with COVID or close contacts that need to isolate. But staffing problems plagued the sector well before the pandemic, with <a href="https://theconversation.com/early-childhood-educators-are-leaving-in-droves-here-are-3-ways-to-keep-them-and-attract-more-153187">more than a 30% staff turnover</a>.</p> <p>The agency responsible for early childhood education and care, the Australian Children’s Education and Care Quality Authority (ACECQA), released its <a href="https://www.acecqa.gov.au/national-workforce-strategy">National Workforce Strategy</a> in 2021. It revealed 25% of educators have been at their service for less than a year. This high turnover harms relationships with children who need continuity.</p> <p>In a 2021 <a href="https://womensagenda.com.au/latest/73-of-early-educators-plan-to-leave-the-sector-within-three-years/">survey of almost 4,000 Australian educators</a>, 73% said they planned to leave their job within three years. The <a href="https://bigsteps.org.au/wp-content/uploads/2021/08/Exhausted-undervalued-and-leaving.pdf">reasons</a> included low pay, overwork and being undervalued.</p> <p><a href="https://images.theconversation.com/files/440392/original/file-20220112-23-1qok3m4.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/440392/original/file-20220112-23-1qok3m4.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Child pouring out sand." /></a> <span class="caption">73% of early childhood educators plan to leave the profession.</span> <span class="attribution"><a href="https://unsplash.com/photos/z02yFSgVRbA" class="source">Markus Spiske/Unsplash</a></span></p> <p>Women make up <a href="https://www.acecqa.gov.au/national-workforce-strategy">91% the early childhood education and care workforce</a>. Pay is low in traditionally female occupations, and many educators leave simply because they <a href="https://journals.sagepub.com/doi/full/10.1177/0022185618800351">cannot afford to stay</a>.</p> <p>ACECQA has fast tracked <a href="https://www.acecqa.gov.au/qualifications/requirements/children-preschool-age-or-under/recognition-as-an-equivalent-early-childhood-teacher">quick conversions</a> for primary and secondary school teachers into early childhood education, despite large and important differences in teaching philosophies.</p> <p>But there is unlikely to be a stampede to become one of Australia’s <a href="https://au.indeed.com/career-advice/finding-a-job/lowest-paid-jobs-in-australia">13th lowest paid workers</a>, just above a housekeeper. The national average salary for a childcare worker is A$29.63 per hour, but many earn as little as <a href="https://www.payscale.com/research/AU/Job=Childcare_Worker/Hourly_Rate">A$23.50</a>. This is in comparison to an average school teacher who earns <a href="https://www.payscale.com/research/AU/Job=Primary_School_Teacher/Salary">A$33.65</a> per hour.</p> <p>One educator in our study called for</p> <blockquote> <p>recognition of the equal value of early childhood educators with primary school teachers, especially for university-trained teachers, who experience a huge pay gap.</p> </blockquote> <p>Casualisation in the sector is another issue leading to high turnover. As part of government COVID rescue packages, permanent staff could receive JobKeeper payments, but casual staff at childcare services were not eligible. Many <a href="https://thesector.com.au/2021/08/05/hypervigilance-is-wearing-ecec-educators-down-as-the-pandemic-continues/">casual staff left</a> the sector.</p> <p>Government oversight is needed but there is always confusion about which government is responsible. Then there are also differences between community based and private services.</p> <h2>2. Nobody is responsible for the sector</h2> <p>Australia has one of the <a href="https://theconversation.com/quality-childcare-has-become-a-necessity-for-australian-families-and-for-society-its-time-the-government-paid-up-131748">highest levels</a> of privatisation in early childhood education in the world. This makes it harder for governments to control casualisation. However, the government sets the award wages.</p> <p>In a recent speech to the National Press Club, New South Wales Premier, Dominic Perrottet, <a href="https://www.abc.net.au/news/2021-12-08/perrottet-bid-to-take-over-childcare-from-commonwealth/100681344">said</a> he wanted states and territories to be able to take over responsibility for childcare from the federal government. This was part of his plan for “reform for a postpandemic world” which he said should be “state led, not Commonwealth led”.</p> <p>The federal government funds childcare, through subsidies, but providers are largely private and set their own fees. The state and territory governments fund community preschools.</p> <p>The federal government is responsible for the sector’s standards, frameworks and curricula, but the state and territory governments regulate them. This messy web makes it more difficult to reform the sector and manage costs for families.</p> <p>One level of government taking responsibility for childcare and preschool services will go some way to fixing the problems.</p> <p><iframe width="440" height="260" src="https://www.youtube.com/embed/FIef0mCk7Ao?wmode=transparent&amp;start=0" frameborder="0" allowfullscreen=""></iframe> <span class="caption">NSW Premier Dominic Perrottet wants the states to take over responsibility for childcare.</span></p> <h2>3. Too much paperwork</h2> <p>In <a href="https://thesector.com.au/2021/07/26/acecqa-shares-findings-from-national-workforce-strategy-as-recruiting-challenges-persist/">ACECQA’s survey</a>, educators blamed <a href="https://journals.sagepub.com/doi/10.1177/2043610615597154">administrative overload</a> as one of the <a href="https://thesector.com.au/2021/07/26/acecqa-shares-findings-from-national-workforce-strategy-as-recruiting-challenges-persist/">three main reasons</a> they wanted to leave the profession.</p> <p>The increasing paperwork came as governments created <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=&amp;cad=rja&amp;uact=8&amp;ved=2ahUKEwi86rWw4Jv1AhUTS2wGHSpPD7MQFnoECCYQAQ&amp;url=http%3A%2F%2Fwww.aasw.asn.au%2Fdocument%2Fitem%2F936&amp;usg=AOvVaw0tkTyvOjf6LvcG5WzaJeYG">managerial systems</a> disguised as <a href="https://www.tandfonline.com/doi/abs/10.1080/02680939.2017.1352032">quality assurance</a>, to try to regulate the sector.</p> <p>Now, educators must <a href="https://www.tandfonline.com/doi/abs/10.1080/02680939.2014.924561">collect big data</a> every day, including <a href="https://bigsteps.org.au/wp-content/uploads/2021/08/Exhausted-undervalued-and-leaving.pdf">mountains of checklists</a> for regulation and to document children’s learning. This extra workload <a href="https://educationhq.com/news/managerialism-has-taken-over-in-early-childhood-education-109737/">reduces time</a> spent on quality interactions. It also makes <a href="https://thesector.com.au/2021/10/25/bound-for-burnout-early-childhood-educators-are-swimming-against-a-gendered-micromanaged-tide/">educators feel micromanaged</a>, affecting their <a href="https://doi.org/10.1080/1350293X.2020.1836583">identity and confidence</a>.</p> <p>Echoing the <a href="https://www.pc.gov.au/inquiries/completed/childcare/report/childcare-overview.pdf">Productivity Commission’s findings</a> in 2014, educators in our study said governments must “reduce paperwork”, which they described as “ridiculous”, “complex”, “indecipherable”, “frustrating” and “random”. As one educator said: “we need some paperwork, but we also need to be there for the children”.</p> <p>Over 60% felt frustrated three or more times a week. Nearly 40% of educators said the paperwork required for accreditation compliance (assessment and rating) <a href="https://educationhq.com/news/managerialism-has-taken-over-in-early-childhood-education-109737/">decreased the time</a> they spent with children.</p> <h2>4. High burnout, low morale</h2> <p>Despite being an essential worker, <a href="https://womensagenda.com.au/latest/early-childhood-directors-are-carrying-an-exhausting-load-during-covid-19-even-beyond-major-outbreaks-research/">educators are undervalued</a>, struggling for <a href="https://journals.sagepub.com/doi/10.1177/18369391211050165">recognition</a>. Their strengths <a href="https://www.iejee.com/index.php/IEJEE/article/view/1447/532">are not mentioned</a> in <a href="https://www.acecqa.gov.au/sites/default/files/2020-05/belonging_being_and_becoming_the_early_years_learning_framework_for_australia.pdf">curriculum</a> documents.</p> <p>Overwork is the <a href="https://thesector.com.au/2021/07/26/acecqa-shares-findings-from-national-workforce-strategy-as-recruiting-challenges-persist/">second reason</a> educators want to leave. Our study showed that during the accreditation period, when they need to fill out regulation requirement documents, 50% of staff reported working unpaid hours. <a href="https://thesector.com.au/2021/09/14/accreditation-effects-on-early-childhood-educator-morale/">Staff morale</a> also suffers during accreditation.</p> <p><a href="https://images.theconversation.com/files/440556/original/file-20220112-21-1sgijcd.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/440556/original/file-20220112-21-1sgijcd.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Childcare worker talking to kids." /></a> <span class="caption">Despite doing essential work, childcare workers are burnt out and suffer from low morale.</span> <span class="attribution"><a href="https://www.shutterstock.com/image-photo/preschool-teacher-talking-group-children-sitting-1214667421" class="source">Shutterstock</a></span></p> <p>During the pandemic, educators reported an <a href="https://journals.sagepub.com/doi/full/10.1177/18369391211040940">increased burden</a> with extra time needed for cleaning, health requirements, communicating with parents, rearranging work plans and spaces, caring for staff, and constant <a href="https://thesector.com.au/2021/08/05/hypervigilance-is-wearing-ecec-educators-down-as-the-pandemic-continues/">hypervigilance</a>.</p> <p>One said, “I would prefer to work somewhere for the same or similar wage with less stress and take-home work”.</p> <p>Burnout is the <a href="https://link.springer.com/article/10.1007/s13158-020-00264-6">third reason</a> educators want to leave. “The demand on educators is too high. The pressure is intense”, one told us.</p> <p>The National Workforce Strategy recommends directors give educators links to well-being services and strategies. While this is well-meaning, it is simplistic given the level of crisis.</p> <p>For example, we found 70% of educators felt overtired and 60% felt overwhelmed three or more times in the last week.</p> <p>Recognition of childcare as an <a href="https://journals.sagepub.com/doi/full/10.1177/18369391211040940">essential service</a> – with assured funding provision and a more streamlined level of government regulation – is key to reforming the sector’s status, and educators’ pay.</p> <p>The sector is in crisis, so we need to stop talking about ideas to change it and take action towards <a href="https://thrivebyfive.org.au/">total reform</a>.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/174404/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><span><a href="https://theconversation.com/profiles/marg-rogers-867368">Marg Rogers</a>, Senior Lecturer, Early Childhood Education, <em><a href="https://theconversation.com/institutions/university-of-new-england-919">University of New England</a></em></span></p> <p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/covid-chaos-has-shed-light-on-many-issues-in-the-australian-childcare-sector-here-are-4-of-them-174404">original article</a>.</p> <p><em>Image: Pixabay</em></p>

Family & Pets

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How the decline in Chinese tourists around the world has hit the luxury sector

<p>Large groups of Chinese visitors have become a pillar of the global tourism industry. Coronavirus has not only put paid to this enormous source of income for major cities and sights around the world, it is having a massive knock-on effect for the luxury goods business.</p> <p>For any tourist, buying souvenirs is a key part of the holiday experience. They might be trinkets such as key rings or fridge magnets, a T-shirt emblazoned with the slogan “I ❤ NY” or a Russian matryoshka doll. But a significant number of Chinese tourists prefer to spend large sums on luxury items, such as designer clothes and accessories, when they travel overseas.</p> <p>Roughly one-third of global spending on luxury goods was credited <a href="https://www.voguebusiness.com/consumers/chinese-consumers-luxury-purchases-growth-bain">to Chinese consumers in 2018</a>. Consultants at Bain predict this <a href="https://jingdaily.com/bain-company-chinese-consumers-will-make-up-half-of-global-luxury-purchases-by-2025/">to rise to 50% by 2025</a>. Before the coronavirus pandemic, nearly all of this £85 billion worth of spending (92%) was done <a href="https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/how%20young%20chinese%20consumers%20are%20reshaping%20global%20luxury/mckinsey-china-luxury-report-2019-how-young-chinese-consumers-are-reshaping-global-luxury.ashx">outside the Chinese mainland</a> .</p> <p>What’s more, most of this overseas shopping is done by women between the ages of 19 and 29, according to a 2018 survey of <a href="http://223.27.21.115/~allegiantmediaco/wp-content/uploads/Documents/CN-Travel-Shopper-White-Paper-Final.pdf">over 750 million Chinese people</a>. From our interviews <a href="https://www.emerald.com/insight/content/doi/10.1108/TR-08-2019-0335/full/html">with many of these women</a>, it seems clear that as the Chinese economy recovers from coronavirus they will return to spending. Where they are able to travel and spend will have a big impact on economic recoveries from the pandemic.</p> <p><strong>The awakened generation</strong></p> <p>In China, demographic cohorts are defined by decades. Rather than millennials or generation Z, in China it is the post-90s generation (those born in the 1990s) that have become the core driver of growth for many industries, including luxury, leisure and travel retail.</p> <p>China’s post-90s generation are the direct beneficiaries of the country’s economic reform that began in the 1980s, which opened up the Chinese market to the rest of the world and spurred enormous economic growth through the 1990s to today. Girls, in particular, benefited from growing up at a time when China was more connected with the rest of the world and experienced significant cultural changes, including a decline in the <a href="https://link.springer.com/article/10.1007/s10834-011-9277-9">historic preference for sons</a>. The one-child policy played a part in this, too.</p> <p>Compared with previous generations, which are more family-centred and self-effacing, post-90s Chinese women are self-confident, independent and well-educated. They are also keen to express themselves through consumerism. This was evident in the conversations we had with high-spending young women. For them, buying luxury goods was a key part of their identity and self-expression. When travelling, it was one of the most important parts of their holiday, if not the actual purpose for their trip.</p> <p>Around the world, people buy and display luxury goods – from fancy cars to expensive watches and handbags – as status symbols. This is especially the case for the post-90s Chinese woman who seeks to distinguish herself from others in various ways. Vivian*, who’s 30, has a master’s degree and works in finance, told us:</p> <p><em>Buying luxury branded products is very personal. It’s my handbag. I do not want to look like everyone else.</em></p> <p>Travelling further afield to Europe is a way to buy luxury goods that distinguish themselves from their peers, as different designs are available to those in China. As well as the premium shopping experience, the people we spoke to repeatedly talked about the importance of having unique items. Ava, a 23-year-old student, said:</p> <p><em>Those special designs somehow are much more beautiful than those basic items that are available everywhere [in China]. They also reflect my lifestyle as a well-travelled person. When I carry it around, people know I am special.</em></p> <p>We also found that for the post-90s Chinese woman who travels abroad, buying designer items in the country where they originated from was seen as part of the authentic experience. As Emma, who is 23 and works in fashion, put it:</p> <p><em>Buying handbags in Paris makes me feel like a French lady. It’s a fun and authentic experience. It is a very different experience to purchasing them in Shenzhen.</em></p> <p><strong>‘Revenge spending’</strong></p> <p>The coronavirus pandemic has not reduced this appetite among China’s wealthy post-90s generation to travel and spend. A survey from <a href="https://blog.globalwebindex.com/chart-of-the-week/coronavirus-reshaping-the-luxury-market/">April this year found</a> that almost 60% of this group who had delayed their purchase plans would return to spending once the outbreak was over in China. And a number of luxury businesses reported a <a href="https://edition.cnn.com/2020/06/11/business/global-luxury-sales-china-coronavirus-intl-hnk/index.html">big rise in spending</a> following the easing of lockdown restrictions in China, including jewellery brand Tiffany and fashion house Burberry.</p> <p>While overseas travel restrictions will significantly reduce the outbound tourist market for the time being, many brands will be hoping for a similar bout of so-called <a href="https://www.cnbc.com/2020/05/13/revenge-spending-by-the-rich-could-drive-luxury-recovery.html">“revenge spending”</a>, as people make up for the time spent cooped up in lockdown.</p> <p>Having been the first to be hit by coronavirus, China is the first major economy to show a recovery. And as the world’s largest (and still growing) source of travellers and luxury shoppers, China will be the engine of the post-pandemic recovery for both these sectors. Both should be aware of what motivates this younger generation to spend in order to tap into it. Growing tension between the west and China, along with struggles to contain the pandemic in the west, may see other Asian countries as the first to benefit from outbound Chinese tourists.</p> <p>*<em>Names have been changed.</em></p> <p><em>Written by Misha Ketchell</em><em>. This article first appeared on <a href="https://theconversation.com/how-the-decline-in-chinese-tourists-around-the-world-has-hit-the-luxury-sector-145267">The Conversation</a>. </em></p>

International Travel

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The coronavirus will hit the tourism and travel sector hard this 2020

<p>The spread of infectious diseases is invariably linked to travel. Today, tourism is a huge global business that accounts for <a href="https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2019/world2019.pdf">10.4 per cent of global Gross Domestic Product (GDP) and 10 per cent of global employment.</a></p> <p>Nothing seems to slow its growth as year-over-year <a href="https://unwto.org/world-tourism-barometer-n18-january-2020">increases outpace the economy</a>. The United Nations World Tourism Organization is predicting further <a href="https://unwto.org/world-tourism-barometer-n18-january-2020">growth of three per cent to four per cent in international tourist arrivals for 2020</a>, with <a href="https://unwto.org/world-tourism-barometer-n18-january-2020">international departures worldwide particularly strong</a> in the first quarter of this year.</p> <p>But that was before a new coronavirus (formally known as 2019-nCoV) hit China and then very rapidly started spreading to the rest of the world with <a href="https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6">20 countries and counting</a> isolating cases.</p> <p>Officials in China and those in the rest of world have been much quicker to take more drastic action after learning bitter lessons from the SARS outbreak in 2003, which also started in China.</p> <p>The impact on travel to and from China of this new coronavirus, however, has been devastating. Airlines, including <a href="https://www.cbc.ca/news/business/coronavirus-air-travel-1.5444326">Air Canada</a>, <a href="https://www.cnn.com/2020/01/29/business/british-airways-coronavirus/index.html">have cancelled all flights</a> or <a href="https://www.cnn.com/2020/01/29/business/american-airlines-suspends-china-flights-coronavirus/index.html">significantly reduced the number of flights</a> in and out of China. <a href="https://www.bloomberg.com/news/articles/2020-01-30/russia-closing-border-with-china-to-affect-people-not-goods">Russia closed its land border to passenger travel</a> with China and <a href="https://www.vice.com/en_ca/article/n7jebz/hong-kong-is-closing-its-borders-to-keep-coronavirus-out">Hong Kong shut down its borders, cross-border ferries and railways</a>.</p> <p>How does the impact of 2019-nCoV differ from that of SARS, which also affected tourism dramatically?</p> <p><strong>SARS has higher death toll so far</strong></p> <p>The <a href="https://www.who.int/csr/sars/country/en/">World Health Organization</a> confirmed 8,096 cases and 774 deaths in 26 countries as a result of the SARS coronavirus. First detected in late February 2003, it had run its course five months later.</p> <p>The coronavirus first appeared in December 2019 but has already <a href="http://doi.org/10.1056/NEJMoa2001316">surpassed the total number of SARS cases in just two months</a>, albeit with a much lower death rate. Infectious disease experts expect it <a href="https://www.straitstimes.com/asia/east-asia/wuhan-virus-experts-say-outbreak-will-last-months-at-least">to last for several months</a> yet with tens of thousands afflicted before it runs its course.</p> <p>SARS accounted for a <a href="https://data.worldbank.org/indicator/ST.INT.ARVL">drop in international tourist arrivals of almost 9.4 million</a>and a loss of between US$30 billion and $50 billion. But in 2002, China’s role as both a travel destination and a source country was relatively minor, receiving fewer than 38 million tourists and sending about 17 million tourists abroad.</p> <p>Compare that to 2019 when it is estimated China received <a href="https://www.china-mike.com/china-travel-tips/china-tourism-statistics/">142 million inbound tourists and the Chinese made 134 million trips abroad and 5.5 billion trips domestically</a>.</p> <p>The severe travel restrictions imposed by the Chinese government on its citizens and the stern warnings from Foreign Affairs offices, <a href="https://travel.gc.ca/destinations/china">including Canada’s</a>, to avoid all non-essential travel to China and all travel to Hubei province (Wuhan is its capital and largest city) means that the economic impact of this coronvirus will be felt in every corner of the world and almost every sector of the economy.</p> <p>The market response has been swift, with <a href="https://www.cbc.ca/news/business/coronavirus-economic-impact-1.5437393">share prices of major airlines, cruise lines and tourism companies dropping several percentage points</a>.</p> <p>With the World Health Organization declaring the coronavirus <a href="https://www.who.int/">a public health emergency of global concern</a>, Gloria Guevara, president and CEO of the World Travel and Tourism Council (<a href="https://www.wttc.org/search-results/?query=coronavirus">WTTC</a>) fears that this escalation could have a damaging and lasting economic impact on the sector. She’s <a href="http://www.travelweekly.co.uk/articles/356089/wttc-issues-coronavirus-economic-impact-warning">expressed serious concerns</a> that airport closures, flight cancellations and shuttered borders often have a greater economic impact than the outbreak itself.</p> <p><strong>Hundreds of thousands die from seasonal flus</strong></p> <p>These concerns are well justified when one considers that <a href="https://www.cdc.gov/media/releases/2017/p1213-flu-death-estimate.html">between 291,000 and 646,000 people worldwide die from seasonal influenza-related respiratory illnesses each year</a>, which does not lead to any of these warnings or drastic measures.</p> <p>Canada saw <a href="https://www.who.int/csr/sars/country/en/">251 SARS cases and 43 deaths</a>, but it cost the Canadian economy an estimated <a href="https://www.cbc.ca/news/business/coronavirus-economic-impact-1.5437393">$5.25 billion and 28,000 jobs</a>. At the time, China was a Canadian tourism market of less than <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2410000301">100,000 visitors annually; that dropped by 25 per cent due to SARS</a>.</p> <p>Today, China is Canada’s second-largest overseas market, accounting for close to <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2410000301">800,000 arrivals</a>, and its highest spending market with more than<a href="https://www.destinationcanada.com/sites/default/files/archive/869-Market%20Highlights%20-%20China%20-%202019/MarketHighlights-CN_EN%5B1%5D.pdf">$2,800 per trip</a>.</p> <p>Depending on how long the restrictions and warnings are in place, losses could easily double of those in 2003. The pain will be felt in every industry as tourism’s supply chain involves everything from agriculture and fishing to banking and insurance. The hardest hit will be its core industries of accommodation, food and beverage services, recreation and entertainment, transportation and travel services.</p> <p>While Air Canada will <a href="https://www.aircanada.com/ca/en/aco/home/book/travel-news-and-updates/2020/china-travel.html">refund fares for cancelled flights</a> to and from China, other airlines may only <a href="https://www.cnn.com/2020/01/28/business/delta-american-united-coronavirus-wuhan-china/index.html">extend change fee waivers</a> or provide credit towards future flights.</p> <p>But this may not be the case for connecting flights from Beijing or Shanghai, the cities most commonly served by North American airlines.</p> <p>A growing number of hotels are also waiving changes and cancellation fees for bookings in China scheduled for the next few weeks. But many travellers to or passing through China may not be able to recover all their money, even if they bought insurance. That’s because most basic travel insurance plans do not cover <a href="https://www.aarp.org/travel/travel-tips/safety/info-2020/insurance-coronavirus-coverage.html">epidemics as a reason for cancellation</a>.</p> <p><em>Written by Marion Joppe. Republished with permission of <a href="https://theconversation.com/the-coronavirus-will-hit-the-tourism-and-travel-sector-hard-130872">The Conversation.</a> </em></p>

Cruising

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The coronavirus will hit the tourism and travel sector hard

<p>The spread of infectious diseases is invariably linked to travel. Today, tourism is a huge global business that accounts for <a style="font-size: 14px;" href="https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2019/world2019.pdf">10.4 per cent of global Gross Domestic Product (GDP) and 10 per cent of global employment.</a></p> <p>Nothing seems to slow its growth as year-over-year <a href="https://unwto.org/world-tourism-barometer-n18-january-2020">increases outpace the economy</a>. The United Nations World Tourism Organization is predicting further <a href="https://unwto.org/world-tourism-barometer-n18-january-2020">growth of three per cent to four per cent in international tourist arrivals for 2020</a>, with <a href="https://unwto.org/world-tourism-barometer-n18-january-2020">international departures worldwide particularly strong</a> in the first quarter of this year.</p> <p>But that was before a new coronavirus (formally known as 2019-nCoV) hit China and then very rapidly started spreading to the rest of the world with <a href="https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6">20 countries and counting</a> isolating cases.</p> <p>Officials in China and those in the rest of world have been much quicker to take more drastic action after learning bitter lessons from the SARS outbreak in 2003, which also started in China.</p> <p>The impact on travel to and from China of this new coronavirus, however, has been devastating. Airlines, including <a href="https://www.cbc.ca/news/business/coronavirus-air-travel-1.5444326">Air Canada</a>, <a href="https://www.cnn.com/2020/01/29/business/british-airways-coronavirus/index.html">have cancelled all flights</a> or <a href="https://www.cnn.com/2020/01/29/business/american-airlines-suspends-china-flights-coronavirus/index.html">significantly reduced the number of flights</a> in and out of China. <a href="https://www.bloomberg.com/news/articles/2020-01-30/russia-closing-border-with-china-to-affect-people-not-goods">Russia closed its land border to passenger travel</a> with China and <a href="https://www.vice.com/en_ca/article/n7jebz/hong-kong-is-closing-its-borders-to-keep-coronavirus-out">Hong Kong shut down its borders, cross-border ferries and railways</a>.</p> <p>How does the impact of 2019-nCoV differ from that of SARS, which also affected tourism dramatically?</p> <p><strong>SARS has higher death toll so far</strong></p> <p>The <a href="https://www.who.int/csr/sars/country/en/">World Health Organization</a> confirmed 8,096 cases and 774 deaths in 26 countries as a result of the SARS coronavirus. First detected in late February 2003, it had run its course five months later.</p> <p>The coronavirus first appeared in December 2019 but has already <a href="http://doi.org/10.1056/NEJMoa2001316">surpassed the total number of SARS cases in just two months</a>, albeit with a much lower death rate. Infectious disease experts expect it <a href="https://www.straitstimes.com/asia/east-asia/wuhan-virus-experts-say-outbreak-will-last-months-at-least">to last for several months</a> yet with tens of thousands afflicted before it runs its course.</p> <p>SARS accounted for a <a href="https://data.worldbank.org/indicator/ST.INT.ARVL">drop in international tourist arrivals of almost 9.4 million</a> and a loss of between US$30 billion and $50 billion. But in 2002, China’s role as both a travel destination and a source country was relatively minor, receiving fewer than 38 million tourists and sending about 17 million tourists abroad.</p> <p>Compare that to 2019 when it is estimated China received <a href="https://www.china-mike.com/china-travel-tips/china-tourism-statistics/">142 million inbound tourists and the Chinese made 134 million trips abroad and 5.5 billion trips domestically</a>.</p> <p>The severe travel restrictions imposed by the Chinese government on its citizens and the stern warnings from Foreign Affairs offices, <a href="https://travel.gc.ca/destinations/china">including Canada’s</a>, to avoid all non-essential travel to China and all travel to Hubei province (Wuhan is its capital and largest city) means that the economic impact of this coronvirus will be felt in every corner of the world and almost every sector of the economy.</p> <p>The market response has been swift, with <a href="https://www.cbc.ca/news/business/coronavirus-economic-impact-1.5437393">share prices of major airlines, cruise lines and tourism companies dropping several percentage points</a>.</p> <p>With the World Health Organization declaring the coronavirus <a href="https://www.who.int/">a public health emergency of global concern</a>, Gloria Guevara, president and CEO of the World Travel and Tourism Council (<a href="https://www.wttc.org/search-results/?query=coronavirus">WTTC</a>) fears that this escalation could have a damaging and lasting economic impact on the sector. She’s <a href="http://www.travelweekly.co.uk/articles/356089/wttc-issues-coronavirus-economic-impact-warning">expressed serious concerns</a> that airport closures, flight cancellations and shuttered borders often have a greater economic impact than the outbreak itself.</p> <p><strong>Hundreds of thousands die from seasonal flus</strong></p> <p>These concerns are well justified when one considers that <a href="https://www.cdc.gov/media/releases/2017/p1213-flu-death-estimate.html">between 291,000 and 646,000 people worldwide die from seasonal influenza-related respiratory illnesses each year</a>, which does not lead to any of these warnings or drastic measures.</p> <p>Canada saw <a href="https://www.who.int/csr/sars/country/en/">251 SARS cases and 43 deaths</a>, but it cost the Canadian economy an estimated <a href="https://www.cbc.ca/news/business/coronavirus-economic-impact-1.5437393">$5.25 billion and 28,000 jobs</a>. At the time, China was a Canadian tourism market of less than <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2410000301">100,000 visitors annually; that dropped by 25 per cent due to SARS</a>.</p> <p>Today, China is Canada’s second-largest overseas market, accounting for close to <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2410000301">800,000 arrivals</a>, and its highest spending market with more than<a href="https://www.destinationcanada.com/sites/default/files/archive/869-Market%20Highlights%20-%20China%20-%202019/MarketHighlights-CN_EN%5B1%5D.pdf">$2,800 per trip</a>.</p> <p>Depending on how long the restrictions and warnings are in place, losses could easily double of those in 2003. The pain will be felt in every industry as tourism’s supply chain involves everything from agriculture and fishing to banking and insurance. The hardest hit will be its core industries of accommodation, food and beverage services, recreation and entertainment, transportation and travel services.</p> <p>While Air Canada will <a href="https://www.aircanada.com/ca/en/aco/home/book/travel-news-and-updates/2020/china-travel.html">refund fares for cancelled flights</a> to and from China, other airlines may only <a href="https://www.cnn.com/2020/01/28/business/delta-american-united-coronavirus-wuhan-china/index.html">extend change fee waivers</a> or provide credit towards future flights.</p> <p>But this may not be the case for connecting flights from Beijing or Shanghai, the cities most commonly served by North American airlines.</p> <p>A growing number of hotels are also waiving changes and cancellation fees for bookings in China scheduled for the next few weeks. But many travellers to or passing through China may not be able to recover all their money, even if they bought insurance. That’s because most basic travel insurance plans do not cover <a href="https://www.aarp.org/travel/travel-tips/safety/info-2020/insurance-coronavirus-coverage.html">epidemics as a reason for cancellation</a>.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/130872/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/marion-joppe-952990">Marion Joppe</a>, Professor, Law and Economics of Tourism, <a href="https://theconversation.com/institutions/university-of-guelph-1071">University of Guelph</a></em></p> <p><em>This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/the-coronavirus-will-hit-the-tourism-and-travel-sector-hard-130872">original article</a>.</em></p>

Domestic Travel

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Why it can be dangerous to invest by sectors

<p><em><strong>Kent Kwan is co-founder of AtlasTrend. With 15 years of professional experience in investing and international financial markets, Kent has successfully managed more than $1 billion in funds invested in international-listed shares.</strong></em></p> <p>It is a long held tradition in the investment markets that shares and managed funds are separated into industry categories e.g. resources, healthcare. Many people will base their investment decisions on the perceived growth or defensive characteristics of these industries.</p> <p>For example, financial planners might advise those in retirement to invest in lower risk and lower growth industries such as utilities whereas for younger clients they may advise investments in higher growth industries and companies.</p> <p>This used to make sense in the 20<sup>th</sup> century but I fear it is now an outdated way for approaching investing. In fact, it might even be downright dangerous from a risk perspective to filter investments based solely on notional industry classifications.</p> <p>Why is this the case?</p> <p>It is all because in the 21<sup>st</sup> century the rapid pace of technological development and innovation has already started to turn many traditional industries and companies upside down.</p> <p><strong>Technology &amp; innovation will disrupt all traditional industries</strong></p> <p>It is a big statement but I can’t think of one major industry globally which will not be significantly disrupted in some way by technology or innovation in the next 5 to 15 years. In many cases, these innovations have impact across multiple sectors. Let’s take the following two examples of industries which are traditionally seen as very defensive with little risk to their future earnings profile.</p> <p><strong>Utilities industry</strong></p> <p>The utilities (power generation) industry has long been recognised as one of the most defensive industry available for investment. The theory being centralised generation of electricity will always be required and large power stations will for the foreseeable future have no competition. </p> <p>However, there is now ongoing rapid improvement in solar energy and battery storage technology. This improvement is happening so fast that the world is probably less than a decade away from solar energy generation on your rooftop being able to provide all your home energy needs at below the cost of what a traditional utility can supply electricity.</p> <p>When this occurs, you can imagine what will happen to the profit and loss of traditional utility companies. There is a real possibility that some utility companies become obsolete. What is now regarded as the most defensive of sectors for investing may well become the riskiest of sectors. </p> <p><strong>Healthcare industry</strong></p> <p>The use of technology such as big data analysis (the use of computing power to analyse huge amounts of data to find useful trends) is already having great impact across the healthcare industry. For example, it can significantly shorten new drug research time, diagnose diseases, personalise medical treatments and provide much earlier indications of health issues.</p> <p>For healthcare companies to prosper, it will no longer just be about people becoming sick and providing medical care. It will instead be driven by which company can best utilise innovation and technology to prevent people becoming ill in the first place and using appropriate data analytics to provide the best course of medical treatment. As a result, what was an industry with relatively defensive investment characteristics is rapidly morphing into an industry with very different and divergent traits.</p> <p><strong>What does it mean for your investing strategy?</strong></p> <p>You should reconsider filtering investments based on traditional notions of sectors or perceived growth / defensive characteristics.</p> <p>The better risk adjusted way to invest is to focus on what long term themes or trends are driving significant global change or global innovation. Then invest in the specific companies that benefit from these trends and avoid those that will be disrupted by that same trend.</p> <p>Let’s take online shopping as an example of a long term innovation trend.</p> <p>Statistics globally show the trend towards online shopping is growing rapidly though still in its infancy. For example, only 7.5% of all retail goods and services sold in the US are sold online. There is near certainty this trend towards online shopping will continue to grow rapidly over the next 10 years.</p> <p>The winners and losers from this trend are quite varied across many industries.</p> <p><strong>Winners:</strong> Online retailers should be the obvious winners but it is likely the ones who are first movers and have scale that will be the true winners. Traditional retailers who can leverage their existing customer bases to the online world will also benefit. Since every product sold also has to be stored first, packaged and then delivered, freight companies and large scale logistics warehouse developers are also set for a great decade. Looking slightly further into the future, companies that are able to develop online shopping autonomous delivery technology (self-driving cars or even drones) may create a completely new industry.</p> <p><strong>Losers:</strong> Traditional retailers who are not engaged with their customers online will no doubt suffer immensely. Real estate companies that own mid-tier shopping malls together with car park companies near these malls will find growth quite difficult to come by. Food and beverage outlets that depend on shopping mall foot traffic may also find their businesses in decline.</p> <p>Going forward, successful investing will need an understanding of the global trends that impact multiple industries and companies. If you are an investor at heart, this should be great news because it will broaden your horizon to brand new investment opportunities you may have never considered before. At the very least, it should help you avoid some potentially costly investments in certain sectors that are set to be disrupted.</p> <p>Are you comfortable with your investments? What do you make of this advice?</p> <p>Let us know in the comments below.</p> <p><em>To learn more about a selection of top thriving global investing themes, sign up for a free <a href="https://www.atlastrend.com/register/?group=oversixty" target="_blank"><strong><span style="text-decoration: underline;">AtlasTrend</span></strong></a> trial today.</em></p> <p><em>Any advice contained in this communication is general advice only. None of the information provided is, or should be considered to be, personal financial advice.</em></p> <p><strong>Related links:</strong></p> <p><a href="http://www.oversixty.co.nz/finance/money-banking/2016/08/10-more-items-you-must-never-buy-at-the-supermarket/"><strong><span style="text-decoration: underline;"><em>10 more items you must never buy at the supermarket</em></span></strong></a></p> <p><span style="text-decoration: underline;"><a href="/finance/money-banking/2016/07/understanding-the-huge-power-of-big-data/"><em><strong>Understanding the huge power of big data</strong></em></a></span></p> <p><a href="/news/news/2016/07/20-simple-ways-to-save-when-grocery-shopping/"><span style="text-decoration: underline;"><em><strong>20 simple ways to save when grocery shopping</strong></em></span></a></p>

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