Chinese tourists accounted for nearly 40 per cent of tourism spending in Victoria last year, according to the latest government figures.
One-in-five Chinese tourists to Australia travel as part of a group.
Christine Zhang, the director of tour operator Odyssey Travel, which employs 40 staff, witnessed the impact of the SARS outbreak in 2003 but expects this crisis to be worse.
“It’s devastating – there’s no one,” she said.
“February, March and April there are no tours … up to June, we are being forced to refund 90 per cent of [pre-booked] plane tickets.”
Ms Zhang was speaking from Odyssey’s office on Swanston Street where all employees were wearing face masks on Tuesday.
Odyssey runs tours to popular destinations including the Great Ocean Road, Phillip Island, Apollo Bay and Puffing Billy. It also books flights to and from China.
Fear surrounding the virus is also causing Victorian residents of Chinese background to shun public places, compounding the effect of the tourist ban, Ms Zhang said.
An Odyssey tour scheduled to begin on Tuesday was cancelled because a high number of local residents opted out.
Ms Zhang said she would try to absorb the revenue drop for the next few months, but may need to lay off staff if the situation continues into the middle of the year.
“I couldn’t think of anything worse than this scenario,” she said.
Puffing Billy, which is heavily reliant on Chinese tourists, is expecting its revenue to plunge by at least 25 per cent in the month of February and potentially March, depending on the duration of the group-travel ban.
Jason Schram, mayor of the Colac Otway Shire, which takes in Apollo Bay, said tourist operators could soon need direct financial assistance.
He said tour groups were crucial to the local economy, not only for the hotels and leisure operators, but retail shops and restaurants.
“It’s disappointing but it looks like we’re going to be in for a downturn,” he said.
“If those tour companies aren’t coming it’ll certainly hurt.”
Cr Schram is planning to meet with local chambers of commerce and the state and federal governments to discuss support packages for businesses.
On Phillip Island three hotel managers told The Age they were bracing for the impact of the travel ban.
“It will affect places like Phillip Island badly, it’s just a matter of how hard,” said hotel operator Sue, who requested her last name not be published.
“We had it with SARS and it’s happening again.”
Tourism Minister Martin Pakula said it was too early to know how badly the coronavirus would hurt the tourism sector.
“Following the devastating fires that have affected East Gippsland and north-east Victoria, the message is clear – the most practical thing that ordinary Victorians can do right now to help these regions is to travel there and spend money there,” he said.
Paul is a reporter for The Age.