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Fitch Ratings says the impact of the Wuhan coronavirus on our rated Australian issuers will largely stem from the expected reduction in Chinese tourist arrivals.

Drop in Chinese Tourists Drives Coronavirus Impact in Australia
This will dampen demand across a number of sectors, with the effect in our rated universe to be felt among retail-exposed REITs, Scentre Group Limited (A/Stable) and Mirvac Limited (A-/Stable), Australian airline Virgin Australia Holdings Limited (B+/Stable), casino operator Crown Resorts Limited (BBB/Stable) and Australian wine producer Amphora Finance Limited (Accolade, B/Stable). On the other hand, Fitch's rated Australian infrastructure issuers may be less affected by the outbreak.
If the impact from the virus is short-lived, Fitch does not expect credit profiles to be materially affected. However, if the outbreak is not sufficiently contained by 1Q20, more corporate issuers can face rating pressures. 
Fitch believes the strength of the financial profiles of the investment-grade Fitch-rated issuers will help them withstand the pressures they are likely to face over the coming months from any decline in demand. On the other hand, the sub-investment grade Fitch-rated issuers may see a slowing of the expected deleveraging we have incorporated into our forecasts.
Since the outbreak of the coronavirus, the Chinese government has implemented a number of measures to minimise the spread of the disease, including the recent ban on tour groups leaving China and the grounding of flights from affected areas. 
Governments worldwide, including in Australia, have implemented restrictions on travellers entering the country from mainland China, among other measures. Furthermore, we believe that individuals will likely avoid travel to and from China - including Hong Kong and Macau - as they take precautions against this disease. The Australian tourism industry is likely to be most affected by these measures with Chinese tourists making up the largest proportion of inbound tourist numbers into the country, with around a quarter arriving as part of a tour group. 
Chinese arrivals reached 1.44 million for the 12 months to March 2019 - doubling in the past five years - and they spent around AUD12 billion in 2018, according to Tourism Australia. This, combined with the impact of the recent bushfires, will also likely lead to subdued domestic consumer confidence in Australia. In addition, demand for Australian exports of consumer goods may fall as people in the country avoid large social gatherings for fear of contracting the illness.
Fitch believes that Scentre and Mirvac will be able to withstand the effects of any slowdown in Chinese tourist visits and domestic consumer confidence. Both REITs' portfolios are more targeted towards the domestic market, with over 65% of the Australian population living within 30 minutes of one of Scentre's Westfield malls, while Mirvac's retail portfolio is mainly located in Australian east coast city suburbs with good demographics. 
To date, Australian consumers continue to go about their daily lives and are not avoiding public places, unlike other regions. In addition, REIT portfolios typically provide both lifestyle options and staple products, such as supermarkets, which we believe will support ongoing stable footfall despite any subdued domestic consumer sentiment. 
Scentre's mall in Sydney's central business district, Westfield Sydney, does have a significant number of luxury retailers that attract overseas visitors, with many from China, but around 80% of their sales remain domestically sourced. As such, we expect any slowdown in Chinese tourism to have a minimal impact on Scentre's overall results.

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