How China Handled the COVID-19 Crisis: A Conversation with Guy Rubin
Publication: Insider Travel Report
Interview: Guy Rubin on How China Has Handled the COVID-19 Crisis
Interviewer: James Shillinglaw
This interview originally appeared on the Insider Travel Report channel and is republished with permission as part of Imperial Tours’ media archive.
How China Handled the COVID-19 Crisis: A Conversation with Guy Rubin
Guy Rubin, managing partner and co-founder of Imperial Tours, a Beijing-based destination management company offering curated China programs to high-end travelers, talks with James Shillinglaw of Insider Travel Report about how his company has fared during the coronavirus crisis, how China has dealt with the pandemic and what the future holds for both inbound and outbound China travel. For more information, visit www.imperialtours.net.
Originally produced by Insider Travel Report and reposted with permission.
Interview Transcript
James Shillinglaw: Hi, I’m James Shillinglaw, and I’m here with Guy Rubin, who will be a familiar face if you’ve been watching Insider Travel Report. Guy is co-founder and managing partner of Imperial Tours, which is what you would call a destination management company and inbound operator in China. He knows a little bit about what’s going on there, and that’s one of the reasons we wanted to chat with him now: to find out how he’s doing, how his company is doing, and what’s happening in China today. You can find out about that and more on Insider Travel Report.
James Shillinglaw: First of all, how are you doing? How’s the family and everything else?
Guy Rubin: We’re all very well. It’s night here, so the kids are getting ready for bed. Mom is looking after them, and I’m happy to be talking to you.
James Shillinglaw: I’m sorry to take you away from bedtime stories, but we’re going to get our own little story here. Let’s talk about what’s happened to your company, Imperial Tours. I know we featured you in a column, and at that time we thought maybe in three months or something like that things would emerge by this summer. What have you had to do to survive and get through this crisis?
Guy Rubin: What makes China interesting is that this isn’t the first time for us. We obviously had SARS in 2003, and I was there for that. In the beginning, this seemed to be a rerun of SARS. A virus was discovered, the Chinese government dragged its feet, and then by August the whole thing had settled down. We had quite a good fall season after that.
Guy Rubin: At the outset, I thought we were following the same script. However, the key difference was that this escaped China. It broke out in Italy, Spain, Europe, America, and elsewhere. That made it a very different story. I don’t think we’re looking at a restart in May or June, and maybe not even September.
James Shillinglaw: So you think you’re pushing back to the fall, if things work out? There are a lot of factors involved. Right now China isn’t even allowing foreigners to come in because they’re fearing reinfections, if I’ve read my articles correctly. There’s so much to read.
Guy Rubin: Destinations differ. China is a very exotic destination and a long-haul destination for most travelers. If I were in Europe, Hawaii, Canada, or a place like that, I might think I could get business from September. But realistically, for us in China, I don’t think we’re going to get anything before March 2021, and that’s if things go well. I could quite easily see us getting into summer 2021.
James Shillinglaw: You’re a small company. How are you handling that right now? You probably had to furlough people. You had a small team to begin with and a lot of great guides, but they have to go into hibernation until this passes, right?
Guy Rubin: Exactly. Hibernation, mothballs — however you want to phrase it. A lot of people in the travel industry are looking for help from government. I know in the U.S. there has been a lot of help, or at least prospective help, but that money has not gotten to the right people so far, at least not to travel advisers and travel agencies.
James Shillinglaw: Sadly, only about 20 percent of agencies and individual advisers have been able to secure any money, while a lot of companies that probably weren’t qualified for those particular programs did benefit. The L.A. Lakers got money — why do they need it? I don’t know if there are programs available in China and other places that you could have access to.
Guy Rubin: That’s very much the story for Hong Kong. Hong Kong is following an approach a little like the American approach and a little like the U.K. approach, where it’s helping, or said to be helping, with things like rent and furloughing employees. We’ve applied, but we haven’t heard anything yet. We haven’t actually had any of the money, but we believe the money will be there and we believe we’ll qualify. For a small business, it helps just knowing that there is that backstop, and we trust that the backstop will deliver.
Guy Rubin: China is quite different. China has helped in a very different way, which is much more immediate. For example, in China we have big social costs for employees. Apart from salary, there are all sorts of benefits in terms of health insurance, workers’ benefits, housing fund, maternity leave provision, and so on. That comes up to as much as 45 percent of the total. What the government did was subsidize those social insurance costs, and it also allowed a dormant company to introduce a minimal salary. That’s what we’ve done with our China office. With our Hong Kong office, we’re applying for subsidies and we’ll see where we get to.
Guy Rubin: Another thing I found interesting, and I’m happy to share with other people, was making savings in insurance. There were areas in liability insurance and health insurance where I found that I was making quite a lot of prepayments. Did I really need that insurance, given that not many people are coming to China? The borders are closed, so why do I need all the insurance? There are areas where you’re able to snip a bit and preserve cash, because we have to see this through in hibernation until next year.
James Shillinglaw: Hopefully there are programs available that will help you do that. It would be a shame — I’ve traveled with you and your operation in China is an amazing experience. I’m looking forward to doing it again someday. Let’s talk about China opening up. We hear that China is gradually emerging from the crisis and getting back to business. What are you seeing and hearing based on your contacts with your employees, your guides, and the government itself?
Guy Rubin: For a lot of people in the U.S. shelter-in-place programs, or in Spain, Italy, or the U.K. lockdown, there’s a lot of anxiety and frustration. One of the good things about China is that it was the first to get the disease. Obviously a lot of people died, but in some ways it’s also the first to come out of the disease, and it’s doing so in a way that is showing leadership.
Guy Rubin: We have social distancing in place. I think it’s easy for journalists to overstate a sense of normality in China. It is true that we are coming out of it. People are emerging from their homes. Bars and restaurants are half full. People are beginning to go on the subway again. Traffic is starting up again. But there is a lot of regional difference in China. You’re talking about places the size of Europe. What’s happening in Beijing is different from what’s happening in Shanghai, which is different from what’s happening in Xinjiang. There is a lot of autonomy within those government units in how people are handling this. My answer isn’t true for the whole of China; it’s true for my particular experience of Beijing and Shanghai.
James Shillinglaw: We won’t even go there, but I know everyone is doing stories about Wuhan already coming back.
Guy Rubin: Exactly. I think it’s easy to overstate it. You have to bear in mind that the lockdown in Wuhan was much stricter than anything else I’ve heard about. It was a lot stricter than anything happening in Europe. That’s only just finished. There are still entry-exit card systems going in and out of residential compounds. If anyone comes down with an infection, a whole team comes into the place and you’ll be back in quarantine before you can say quarantine.
Guy Rubin: China is coming out of it, but masks are ubiquitous and there are temperature checks everywhere. In Beijing, gyms, cinemas, and swimming pools are still closed, whereas they are opening in Shanghai. In Shanghai, schools are being reintroduced, whereas in Beijing we’re still waiting to hear about school.
James Shillinglaw: That’s interesting, the regional differences. Are any of the great tourist attractions back open, or are they still closed? Things like the Great Wall, the Terracotta Warriors — all the things you have on your itineraries. Are they pretty much shut down even for the Chinese, who also like to visit these things?
Guy Rubin: I don’t know if it’s fair to describe it this way, but there seems to be a medical pull on this issue and an economic pull on this issue. Where are you within that spectrum? In one or two days, it’s the May holiday in China, and that’s usually a time when people spend a lot of money traveling in China. Only today, Beijing announced the end of its quarantine period. So if I now want to fly to Shanghai for the May holiday, stay in a hotel, hang out for a few days, and then come back, when I return to Beijing I will not need to do quarantine. Yesterday, I would have done so.
Guy Rubin: That’s not coincidental. The government wants Chinese people to start spending money and feel as though they can travel within their country. As for tourist sites, it’s a bit funny. The Forbidden City is still shut. The Great Wall is open at Badaling and Juyongguan. We didn’t take you there when you came to China; we went to a different, smaller part of the Great Wall. They’ve opened the two biggest sections, and I think they had Beijing residents in mind. What will really happen over the May holiday is that most people will probably take very local holidays close to home.
Guy Rubin: There’s a big difference between what’s happened in China and what’s happened in the West in terms of handling the disease. In the West, governments have issued restrictions and been worried that people won’t follow them. That is because developed societies are often high-trust societies, where people generally trust the government and the information from the government. China is not a high-trust society; it’s a low-trust society. People generally don’t trust the information coming from the government, the statistics, or the general information.
Guy Rubin: When something like this happens, Chinese people voluntarily react very cautiously. There wasn’t a lockdown in Beijing, but everyone acted as though there was. Chinese people are fearful, so they all went home. It’s tough to get them out of the house because they’re worried. They hear that this is what people are doing in Wuhan — one member of the family leaving every few days to buy vegetables — and they kind of do the same thing.
Guy Rubin: I have a friend in Shanghai who said she was in lockdown in her apartment with her husband and son. A week later, she said she flew down to Hainan Island because she was running a travel conference in October and had meetings. So it’s not always as simple as people imagine. I don’t think Hainan is going to make a killing immediately, because Chinese people are still cautious and not that keen to leave home. A Chinese friend of mine has been in quarantine for six weeks. He was in London, caught it in London, went back to China, and has been in quarantine for six weeks. We were meant to go on holiday in June to Spain. He said, no way, and he’s cancelling.
James Shillinglaw: Let’s talk about hotels. I was on a call with several big hotel companies who said a lot of their hotels had reopened in China. Is that accurate? I’m talking even about high-end hotels like Four Seasons.
Guy Rubin: There are hotels that we work with, and I’m not even sure any of them shut down in the big cities, because again there wasn’t a lockdown in Beijing. There was only a lockdown in one part of China. If hotels shut down, they tended to do so because there was no business. It was the same as bars and restaurants. They weren’t necessarily told to shut down. It was Chinese New Year, workers left, some of them never came back, and there was no business because everyone was staying at home.
Guy Rubin: We were looking for rooms in the middle of the crisis, and what I found was that different hotels had different rules depending on circumstances. It wasn’t necessarily decided at a district level; it was being decided on a sub-district level. For example, which foreigners could stay in which hotels, under which circumstances.
James Shillinglaw: That’s interesting, because we didn’t have that impression based on what we’ve had to deal with here. There are hotels open, but a lot have closed, especially the higher-end ones. The more luxurious hotels seem to have shut down, while some mid-market hotels are still open to an extent, but occupancies are incredibly low. Let’s talk about whether there is any sense of when China might allow foreign visitors in, and under what conditions. Is that being discussed?
Guy Rubin: That’s an interesting question. There are a lot of authoritarian governments around the world that are quite pleased with how they’ve handled this crisis. Governments like Singapore’s believe authoritarian governments are better suited to dealing with pandemics than democratic governments. One weakness in that argument is when there’s a trade-off. In the West, we might decide that if COVID has a mortality rate of 0.2 percent or 0.1 percent, are we prepared to take that cost in order to open our economies? That’s a debate and discussion a democracy can have. An authoritarian government cannot have that debate in the same way.
Guy Rubin: My view on what China will do is that it may follow the West a little bit. Although it was first into it and first out of it, it’s not able to deal openly with the concept of a trade-off. If the West accepts that trade-off, and we’re talking at the end of April when people are starting to think about that issue, then maybe Eastern authoritarian governments will consider it. Otherwise, my sense is that China will be incredibly cautious.
Guy Rubin: There’s a big meeting coming up, the National People’s Congress, May 19 to May 22, which should have been in March but was delayed. I think a lot of things are being delayed until after that conference. As you mentioned, foreigners are not even allowed into China at the moment. If you’re married to a Chinese person and want to come back to China, you wouldn’t be allowed in. If you have a work permit, you’re not allowed in. There are school teachers who need to return for international schools, and they’re not being allowed in to work at the schools. That’s a huge problem.
Guy Rubin: I believe that after the conference, there will be gradual reopening. Foreign experts and foreign specialists may start to be allowed back into China so they can resume their work for the Chinese government. The inbound leisure travel market is very low on the list of priorities.
James Shillinglaw: I can imagine. Ironically, I think you actually can come into the U.S., although you may be quarantined or at least asked to self-quarantine. Let’s talk about what China learned from this COVID-19 crisis that helped it emerge from the crisis. The corollary is: what lessons can other countries take from China’s experience?
Guy Rubin: Don’t forget they already had SARS, so they had a huge head start on Western developed countries. They were able to show a high degree of leadership. The first thing they did included some absolutely incredible things. They built two hospitals in a matter of weeks, and those hospitals were created to take moderately affected people, not seriously affected people. That left the existing hospitals to take seriously affected people. It was an incredibly smart decision. Western countries had two months’ lead time and missed that. I think that’s a mistake the U.K. made, for example, not doing that. The U.K. built a huge hospital for seriously ill people, which isn’t being used.
James Shillinglaw: We had the same situation with a Navy ship brought into New York that was supposed to be for non-COVID-19 patients. After about a week, they realized they’d only had about two customers. They changed it to accept COVID patients, and then I heard the ship would leave or may have already left. I don’t understand that. But I did hear the story about what China had done with the hospitals.
Guy Rubin: The second thing they did, for themselves and for the world, was prove that lockdown works. That was a huge directional pointer. It was incredible at the time. I remember watching interviews with doctors saying no one had ever attempted this. Locking down a city was revolutionary.
Guy Rubin: The other thing they learned was the weakness in their own pandemic reporting system. We know that from December 15 until December 30 there was not sufficient reporting on this matter. They learned that the system didn’t have enough political power to overcome resistance within the Wuhan and provincial government. That’s a big learning point for them. For overseas governments, what they learn is that they need a pandemic system. In the U.S., you had one and then stopped funding it. I don’t know if the U.K. has one. I do know that an Italian doctor thought there were similar things going on in Italy in November and no one reported it.
Guy Rubin: China did have a system. It was aware and watchful, but once it picked it up, it wasn’t able to act quickly enough. China has learned that wet markets need to be regulated, because they are a danger area. The other thing it has to look at, with which it has an enormously difficult relationship, is how traditional Chinese medicine fits into this whole picture.
Guy Rubin: There is knowledge within traditional Chinese medicine. The new malaria cure comes from a fourth-century treatise on wormwood. There are things to learn from it. It’s not something that should be thrown out. However, animals are mistreated as a result of it. The Chinese government, thinking it is doing the right thing, legislates against illegal trade in animals for traditional Chinese medicine purposes. But all that does is force it underground, and then who knows what’s happening to those animals? Do you deal with that at the consumer level, through consumer awareness and trying to stop demand? In the same way that in the U.S. you want to stop demand for drugs, in China should you stop demand for traditional Chinese medicine by increasing awareness of what this does and the risks it creates? That’s a whole conversation China has to have with itself after this is all over.
James Shillinglaw: Obviously at the moment everyone is saying they’re going to take action. Whether people actually do take action is something we’re always a little cynical about.
Guy Rubin: This has caused a great deal of disruption in the world, so I believe they will take action.
James Shillinglaw: Let’s end by talking about how you think this crisis has affected travel and tourism going forward to China, and then you can expand to the rest of the world. Is this obviously a game changer?
Guy Rubin: In terms of inbound travel to China, China is obviously a momentous civilization, one of the most important sources of culture in the world, with a huge amount to offer. It will always be an attractive destination. However, at this particular moment in time, China needs time to get over this.
Guy Rubin: First, people see it as the source of the disease. That might change, but that’s certainly the situation at the moment. People are going to be reluctant to travel to a country seen as the source of the disease. Second, there’s a huge amount of anger towards China across the globe because it’s seen as the cause of it. Third, it’s an election year in the U.S., and anti-China sentiment seems to be a campaign platform. People are competing to be more anti-China, which is not going to be good for business. Fourth, China is going through a bad patch with its human-rights situation. A lot of people around the world are worried about what’s happening with the Uyghurs, what’s happening in Hong Kong, and things like that. All of these are going to be a brake on business to China. Ultimately China is a massive destination, and in the long term it will break through it.
James Shillinglaw: That’s looking at inbound. Looking at outbound, what do you see? Initially, travelers from China were ramping up. They were going all over the world. We saw them in New York, Venice, and everywhere else. They were starting to travel the world both in groups and individually. Clearly now, because of what has happened, that market has gone at least temporarily. The major cruise lines thought the Chinese were going to be a huge market, and now they’re going to have to wait. How quickly that rebounds is anyone’s guess. I would guess probably not until next year at the earliest.
Guy Rubin: I completely echo your thoughts. The general trend is not going to shift. Chinese people are incredibly curious. They’re very intelligent, and they want to see the world. That’s not going anywhere. However, they are scared, and they’re very prone to being scared. As a civilization, they have great concern for security and safety. If there is a question of safety, they will be very reluctant to put themselves at risk.
James Shillinglaw: Especially now that the hotbeds of the crisis are here in the States and in New York. We’re nearing 56,000 deaths. I would love if they would also report recoveries, which I think is a real failing of the consumer media. They don’t report the number of people who have recovered. We all know many people have recovered, and we know some who have succumbed, usually with underlying conditions. The consumer media right now — I’ve long since given up watching CNN or Fox every day because it’s a constant barrage where there is no other news.
Guy Rubin: I think you pick up on a major point. What are we going to do about the media? I think the media has gotten a little bit out of control, and the question is whether we need to take the reins of the horse and steer it in a particular direction. On the other hand, it’s a really hard issue because I’m completely against censorship. The one thing we in the West have to think about is what we want the role of media to be in our society, because it clearly has gotten out of control.
Guy Rubin: You picked up on an excellent point. They never report on recoveries. They always give total amounts without regard to how many recovered, so it’s not a net figure. That increases the sense of panic and hysteria. They think it helps their ratings, but I think a lot of people are increasingly turning it off. It’s hard for governments to impose restrictions on media in a free society, but there has to be some leadership within the media itself to say this is not how we should be doing this. It may be a broader issue about integrity in public office and integrity in the media.
Guy Rubin: Going back to outbound travel, a lot of destinations talk about having a destination strategy. Very few actually do. Consultants get paid all the time for destination strategies, and governments never actually implement them. Destinations could see this as a breather in terms of outbound China travel. They have about a year to think about things. Do they want all these people in their destination? If they don’t, are they going to create an administrative rule? Increase prices? Become part of a regional strategy that diverts certain people to certain places? This is a breather, because otherwise destinations like Venice are not going to be able to cope with the current trends as they play out. There has to be a change.
James Shillinglaw: Absolutely. It’s ironic that four or five months ago we were talking about overtourism, and now if you visit some of these destinations, it’s probably the best time ever to go because they’re not crowded. We’ve been to Venice and loved it, but they have serious issues. Our colleague Andrea Grisdale, who you know, was at the forefront of talking about that situation in Italy. We have to be careful as we emerge from this crisis that we don’t go in the other direction.
James Shillinglaw: Let me close this up by asking whether there are any other observations you want to make about China today and about this coronavirus crisis.
Guy Rubin: I’m disappointed by the blame game. I think it’s ridiculous that China is trying to blame the U.S. for things, and I think it’s just as ridiculous that the U.S. is trying to blame China for things. People should bear in mind that no one in China wanted this disease. Everyone has suffered from it. The Chinese people were the first to die from it, and they’ve paid a huge economic cost themselves. Rather than blaming each other, it would be so much better to unite, to communicate, and to use each other’s resources as a common species to deal with this thing. I hope we can remember that we’re all fellows on the same planet.
Guy Rubin: As a subpart of this, the rising anti-Asian sentiment within the U.S. or across Europe is something I really hope will stop. Those people have absolutely nothing to do with it.
James Shillinglaw: Well said. China and the U.S., and China and Europe, have become so interdependent on the economic front that you would hope they can come to agreements, not blame each other, and come up with collective solutions. Especially in travel and tourism, we have markets that can benefit on both sides, inbound and outbound. We have to stop this whole thing in the bud and say we’re all in this together and we’ll find solutions.
James Shillinglaw: For me, I just want a mask. I think most of them are made in China, so I can’t find a mask. I go to Walmart, CVS, everywhere — no masks. They have toilet paper, but they don’t have masks. I finally found a big package, but I still don’t have masks, so I have to worry about that.
James Shillinglaw: Guy, it’s been great to see you in very different circumstances than we’re usually used to seeing you. We’ll check back with you in a few weeks to see how things are going. Maybe we can talk more about this. I think we’ve raised some very interesting issues, and hopefully our viewers — about 100,000 U.S. travel advisers and travel professionals — will learn a little bit. Maybe we’ve learned a little bit here as well. Thanks very much for taking the time to do this.
Guy Rubin: Thanks, James. I think all of us in the travel industry should definitely take a leadership role in bringing countries together.
James Shillinglaw: Absolutely. I’m James Shillinglaw, and this is Insider Travel Report.
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