Asian tourism takes double hit from pneumonia, war

Asian tourism takes double hit from pneumonia, war

Azhar Sukri, Reuters, Hong Kong

Travel agent June Lin is afraid to pick up her telephone these days.

"Business is so terrible," she sighed. "When the phone rings, there is a very good chance that someone wants to cancel the booking."

Asia's tourism industry is reeling from the double blow of a killer virus outbreak and war in Iraq.

Lin, who is based in Taipei, said about 80 percent of her bookings have been canceled over the last week.

John Koldowski, managing director of the Pacific-Asia Travel Association, said about 20 to 60 percent of bookings to Asian destinations have been canceled overall in the last week.

"We're seeing a very, very nervous world, where people are waiting, waiting, waiting before they say yes to a booking, so undoubtedly, we are taking a hit," he told Reuters from PATA's headquarters in Bangkok.

Tourism has long been a key economic driver for Thailand, but now it is seeing some Korean and Japanese tourists cancel trips to the southeast Asian nation famous for its beaches and lively nightlife.

Tourism officials say the war and the pneumonia outbreak hit Asia while it is still grappling with the fallout of the September 2001 attacks on the U.S. and last year's deadly bomb blasts in the Indonesian resort island of Bali.

But industry officials are keen to point out that the tourism sector has proved to be resilient in the past.

Koldowski said tourist arrivals to Fiji and Sri Lanka have bounced back very strongly from civil and political upheavals in recent years.

Sri Lanka tourism officials said they feared a lengthy war could crimp global travel and affect industry, but were not seeing a noticeable drop for the moment.

Bookings to Hong Kong and mainland China have seen most of the cancellations in this year's downturn.

"We have seen about 20 to 30 percent of bookings being canceled from Southeast Asia, while about 30 to 40 percent of bookings from Europe and America have been canceled," Joseph Tung, managing director of the Hong Kong Travel Industry Council, told Reuters.

Luxury hotel chain Shangri-La Asia Ltd [0069.HK] said last week its two hotels in Hong Kong had lost a total of 1,400 bookings because of the war and the pneumonia scare.

Hong Kong has been at the epicenter of an outbreak of severe acute respiratory syndrome (SARS), a highly contagious respiratory disease which has so far killed 10 people and infected 265.

The virus has spread to Vietnam, Singapore, Canada and Germany after first showing up in southern China late last year, triggering a rare global health alert from the World Health Organization.

Suspected cases have been reported in the United States, Britain and Australia as travelers returned from trips in parts of Asia.

But the disease has scarcely deterred mainland Chinese tourists eager to stock up on the latest designer clothes and high-tech consumer gadgets.

"Actually there are more people going to Hong Kong this month as there is a special price on," said Wang Yanguang, a manager at the outbound tourism department of the China International Travel Service.

Economist Ben Simpfendorfer at JP Morgan Chase Bank in Hong Kong said travel services made up about 6.1 percent of Hong Kong's gross domestic product last year.

A record number of tourist arrivals has been among the few bright spots in the territory's deflation-wracked economy, which is set to grow about three percent this year -- even taking into account a short, sharp Iraq war.

Hong Kong's financial secretary Antony Leung said last week, however, that the government may have to revise its growth forecast if the U.S.-led war against Iraq drags on.

Central Baghdad shook under the weight of fierce bombing by U.S.-led forces on Monday, but Iraqi fighters, emboldened by the capture of their first prisoners, stalled troops trying to sweep north to the capital.

In Vietnam, which has seen the highest number of pneumonia infections after mainland China, some cancellations have been reported, including a Belgian commercial and economic delegation numbering 150.

Tourism contributed US$16.4 million to Vietnam's rapidly growing economy in February.

-- Additional reporting by Alice Hung in Taipei, Christina Pantin in Hanoi, Nopporn Wong-Anan in Bangkok, Peh Soo Hwee in Singapore, Chamath Ariyadasa in Colombo, John Ruwitch in Beijing.