Just a few days after the first locally-transmitted Zika virus infection was reported on August 27, it appears that the Zika virus has quietly spread its tentacles across the island. To date, the total of Zika cases in Singapore have escalated to 292 from 115 just about a week ago [updated: 9 September 2016].
Places like Bedok North, Joo Seng Road and Punggol have since found themselves on the Zika map.
The virus most severely afflicts unborn babies whose mothers are in the first trimester and early part of the second trimester. Alarmingly, emerging studies show that it might also cause neurological damage in adults, inducing Alzheimer’s-like effects on those infected.
Without a doubt, the outbreak of the Zika virus in Singapore has stirred much fear and anxiety among locals and tourists alike, and could result in a heavy toll on businesses.
Here are a few sectors that could potentially take a financial hit from the Zika outbreak:
The spread of Zika will likely cause a decline in Singapore’s tourism industry, which already faces weak global economic growth.
Countries like Australia, Indonesia, South Korea, Taiwan and the United States have issued travel advisories to warn pregnant women not to travel to Singapore.
Meanwhile, its neighbour Malaysia has stepped up proactive measures following the outbreak, intensifying checks of people arriving from the island republic. This includes thermal scanners and posting paramedics at airports and border checkpoints.
However, Singapore’s Tourism Board said it was premature to consider any impact on the sector, adding that Singapore remained a safe travel destination.
Unsurprisingly, dwindling tourist arrivals would hurt the hotels sector. Zika’s outbreak in the republic could result in postponements or cancellations of events, conventions and exhibitions, leading to lower hotel occupancy rates.
In April 2003, the outbreak of the severe acute respiratory syndrome (SARS) had caused the average hotel occupancy rate in Singapore to fall between 20% to 30%, compared to 75% just two months before.
Some hotels reported occupancy rates of as low as 10% amid the SARS scare, but let’s hope the Zika outbreak will not lead to that this time round.
Singapore’s retail sector is one of the significant contributors to its economy. In June 2016, the total retail sales (seasonally adjusted) value was estimated at S$3.6 billion, a 1.5% decrease over the previous month.
Zika’s outbreak will likely cause a further decline in the sector, already experiencing tough times due to the effects of rising rentals and competition from online retailing.
During the SARS outbreak, retail sales in Singapore fell as much as 50% due to the sharp drop in tourist arrivals.
With the number of Zika cases increasing, retailers of tourist products, particularly in the Orchard Road shopping belt will most likely be hit the hardest.
4) Food and beverages
Inevitably, Zika’s impact on the above sectors would create a spill-over effect into the food and beverages (F&B) sector.
Less tourists would also mean less spending, not just in hotels and malls, but also in restaurants and food outlets nationwide.
In June 2016, total sales value of food and beverages services on the island was estimated at S$649 million, a 3.3% decline over the previous month.
Amid the SARS outbreak in 2003, revenue at some restaurants reportedly went down by as much as 50%. But while the Zika virus would likely cause a dent in F&B earnings, the impact would probably be a lot less severe this time around.
The simple reason for this is because people just aren’t as scared.
After all, in the greater scheme of things, symptoms resulting from Zika seem almost “mild” and affects mostly a minority of people, and hence does not warrant the same fear as SARS did.
SARS killed hundreds of people in its wake. In comparison, four in five people infected with Zika do not get sick at all.
For now, observers predict that the economic impact from Zika will be minimal, but that’s the optimistic side of things. The full-fledged repercussions from the outbreak still remains to be seen.