Stock watchers generally attribute Monday’s sharp drop on Wall Street to concerns that the coronavirus outbreak may become more serious with the weekend’s reports of new cases in Italy, South Korea and Iran. The Dow Jones Industrial average closed down 1,031 points.
A new study from the real estate services and investment firm CBRE said short-term commercial real estate impacts in the U.S. from the coronavirus outbreak likely will be concentrated in the hotel sector and some retail centers frequented by Chinese tourists.
Coincidental with the release of CBRE’s report, a Hudson Valley resident told the Business Journal about her experiences on a Holland America cruise ship that was blocked from docking at major Asian ports, while Carnival Cruise Lines, Norwegian Cruise Line and Royal Caribbean Cruises canceled about 40 cruises and changed the routes of about 40 other voyages.
CBRE said Chinese travel to the U.S. accounts for 0.16% of the U.S. Gross Domestic Product and the Chinese account for 4% of international travelers to the U.S. It anticipated a modest reduction in demand for hotel rooms in key gateway cities but it expects a rebound in Chinese tourism by year-end assuming the coronavirus outbreak is no longer an issue.
CBRE expects minimal impact on the office market from the world health emergency, very little near-term impact on the multifamily housing market and some short-term impacts to the market for retail space in gateway cities such as New York, Los Angeles and San Francisco as fewer Chinese tourists means fewer dollars spent on merchandise.
“Should the virus continue to aggressively spread, broader impacts will occur for high-value industries like autos and electronics,” CBRE said. It suggested that goods and service exporters to China, as well as the U.S. travel industry, will feel the most immediate business impact from the COVID-2019 virus outbreak.
Cruise ship operators and airlines were among those forced to immediately adjust to disruptions in their operations. Numerous flights serving mainland China were canceled. The ship World Dream operated by Dream Cruises was quarantined off Hong Kong. Royal Caribbean and Norwegian Cruise Line were keeping people who traveled to China off their ships. Carnival’s Diamond Princess was quarantined off Japan with more than 600 COVID-2019 cases reported and at least two deaths.
The Cruise Lines International Association on Feb. 13 said its members are denying boarding to all persons ”“ passengers or crew ”“ who have traveled from, visited or transited via airports in China, including Hong Kong and Macau, within 14 days before embarkation. Fourteen days is accepted by the medical community as being the incubation period for the disease.
In the view of Kathleen Koster of Pearl River, the world health emergency brought out the best in at least one cruise ship operator. Koster estimates she has spent the equivalent of about a year sailing on cruise ships, both before and after retiring as supervisor of rehabilitation services for New York state’s Rockland Psychiatric Center. She had been a Westchester resident for many years and was the group sales manager at the Westchester Broadway Theatre in Elmsford. Koster and her husband had booked a Feb. 1 through Feb. 15 cruise on the Holland America ship Westerdam, an 11-deck vessel normally carrying more than 1,900 passengers and about 800 crew members.
“The cruise was to leave from Hong Kong and visit the Philippines, Taiwan, Japan, South Korea and terminate in Shanghai, China,” she said. “On the flight to Kong Kong, it was clear that something was quite wrong because we noticed on the airplane itself the flight attendants were wearing surgical masks. It was a U.S. airline, United.”
The Kosters had booked a hotel in Hong Kong for a few days and had arranged tours to see the city.
“The minute we went up to the desk to register they gave us surgical masks to wear. The tour I had booked for the next day was canceled. We began to walk around the streets and noticed that the parks were closed. Any place where large groups of people normally gathered were closed because of the coronavirus,” Koster said.
Holland America notified passengers that the cruise itinerary was being changed because of the virus outbreak. Instead of ending in China, it would end in Tokyo. Passengers were advised to change their return flights home. Koster said when she called United, they agreed to make the change and waive the usual change fee.
“When we got on board the ship, they told us that because of their concern with the coronavirus they were not going to allow anyone who had been to mainland China to be on board,” Koster said. “They were constantly checking everyone’s passports.”
Koster estimated that about 500 passengers were not allowed to board.
The ship departed Hong Kong as scheduled on Feb. 1, carrying 1,455 passengers and 802 crew to the first scheduled port of call, Manila. On Feb. 3, the passengers were advised that the ship would not be allowed to dock there.
“Philippine authorities had closed entry to their country and instead we were going to turn around and go to Taichung, Taiwan. So, we set sail for Taiwan and we got there and stood there waiting to be allowed to disembark for one day. Then, they gave Holland America instructions to take the ship away from the dock and we left and that was the last time we touched land until we finally wound up in Cambodia,” Koster said.
Fears were spreading among Asian governments that because the ship had originated its voyage in Hong Kong, people on board likely had been exposed to the coronavirus and represented a health threat. On board, no one was showing any symptoms of illness.
“On Feb. 7, we found out that we couldn’t go to Japan and at that point they canceled the cruise and told us we would receive a full refund of the cruise fare including all taxes, fees and expenses, which they did, and they also were going to give us cruise credit of up to 50% on a future cruise,” Koster said. “They opened up all of the phone lines to everyone and the Wi-Fi and every night at dinner they offered free wine and they had a few cocktail parties just to keep everyone a little more cheerful because it was starting to get a little scary.
“We kept at sea until Bangkok, Thailand, which said they would let us in.”
The passengers were told to change their homebound flights to Bangkok departures, but when Koster called the airline it demanded a $2,500 change fee per ticket. Because of that and, on a hunch, she decided against making a change in flights.
As the ship was approaching Bangkok, Thailand’s government told them to turn around and go away. Thailand”™s navy sent a frigate to block the Westerdam from entering port.
“That was on Feb. 10,” Koster said. “There was a sense of foreboding or fear developing among the passengers. You have to realize that people who go on cruises to exotic places usually are world travelers so there was no panic, just a concern about ‘where the hell are we going to go’ because now we are just floating around in the ocean.”
Koster said the passengers were kept informed by the captain and crew with whatever they knew and people knew there was enough fuel and food to last two weeks from the last port they were at, but time was running out.
The government of Cambodia offered to allow the ship to tie up at the port of Sihanoukville. Passengers and crew were again screened for symptoms of COVID-2019 and no cases were evident.
“We were told not to bother making our own flight arrangements to get home. Holland America would handle everything from here,” Koster said.
Cambodia’s Prime Minister Hun Sen came down to the dock to greet passengers with flowers and handshakes and kisses as they were cleared by medical and customs personnel and allowed to leave the ship. Most passengers and crew were quickly flown to Phnom Penh, Cambodia’s capital, and driven to the airport. Others stayed on board awaiting clearance.
“The first flight that was chartered out was canceled, so we were stuck at the airport for the entire day and it was pretty much bedlam,” Koster said. “That’s when some people started showing signs of bad behavior and panic. There were people screaming and yelling and pushing. All of a sudden, around 7 o’clock at night, people from Holland America and the U.S. Embassy came in and told us to get our baggage.”
Koster said they were loaded onto buses and driven to a five-star resort.
Koster said Orlando Ashford, the CEO of Holland America, arrived at the resort on the second day.
“He spoke to us that night and said, ‘I am here and I’m not leaving until you’re all on your way home.’ Just having him there to tell us he was personally going to get us all out of there was amazing. I felt so comfortable,” Koster said.
Koster and her husband were flown to Tokyo, then to John F. Kennedy International Airport.
An elderly woman who had been on the ship was diagnosed by a doctor in Malaysia as showing symptoms of COVID-2019. The diagnosis turned out to be incorrect.
“It was a dreadful situation to be in, to be in the middle of a world crisis and have almost every country say ‘you can’t come in here.’ It was scary,” she said.
Holland America canceled four Asia cruises scheduled for the Westerdam during March and April.
