No tourism beneficiaries of Bali blasts

No tourism beneficiaries of Bali blasts

Helen Ubels, Dow Jones, Sydney

In the immediate aftermath of the Bali bombings, it seemed as though other Southeast Asian destinations would be the beneficiaries of redirected tourist traffic, but three weeks on, the picture is very different.

The tragedy has created a climate of fear across the region, hurting airlines, hotel operators and the broader tourism sector.

Indonesia, Thailand, Malaysia, the Philippines and even Singapore are finding themselves part of the collateral damage, as various governments warn their traveling citizens of risks at specific destinations, but also crowded hotspots in general.

"Those (government) advisories aren't just Australian, they've been issued in Japan, they've been issued in Europe and North America...and it is affecting forward bookings even to places previously thought of as safe havens, like Phuket, in Thailand," said Ian Thomas, a senior consultant to the Center for Asia Pacific Aviation.

Though a best-case scenario might have Bali on its feet in six months, this assumes there are no further attacks, no conflict in the Middle East, and no backlash inside Indonesia against the government's measures to find the Bali bombers.

"There is no guarantee of any of that, and if anything the outlook for greater uncertainty seems more likely than it does for greater stability," Thomas said.

Peter Hook, a spokesman for the region's largest hotel operator, Accor Asia Pacific, said that bookings are off "everywhere" for the hotel industry. "The whole of South East Asia has been perhaps tarnished with the same brush."

Accor has two hotels on Bali and one on the neighboring island of Lombok, all of which rely on tourist traffic.

Business in that area has suffered "horrendously," said Hook.

But Accor has been somewhat insulated from the broader regional fallout because its hotels, which include the Sofitel, Novotel, Mercure, All Seasons and Ibis chains, aren't as reliant on leisure travel and international trade.

The hotels "aren't as identified as Western hotels or Western destinations," he said.

Six Continents PLC, which owns Intercontinental, Holiday Inn, Holiday Inn Express and Crowne Plaza hotels in Southeast Asia, said the entire hospitality industry has been hurt by the bombings. The group declined to comment further on the regional ramifications, but said it "remains committed to Bali for the long term."

With many airlines cutting service to Bali, the island will be pinning its hope on Japanese business.

Japanese travel agencies say tourists are already coming back and business isn't as bad as feared. The Japan Travel Bureau has resumed selling package tours.

The main reason for the limited impact is that airlines and hotels continued to operate normally and gave tourists the impression that the trouble has been contained, said the agencies.

While Indonesia's Garuda, Australia's Qantas Airways Ltd., Singapore Airlines Ltd. and EVA Airways Corp. have cut flights to Bali, Japan Airlines System Corp. continues to operate two daily flights to Denpasar, the island's international gateway.

Despite this resilience, the Japanese travel industry is nervous about the Middle East.

"What is most worrisome is the situation in Iraq," said a spokesman for Kinki Nippon Tourist Co..

"If newspaper headlines start saying bombing is imminent, tourists' reactions will be: 'Our trip can wait,"' he said.

War in Iraq will inflame the situation in Southeast Asia, said Thomas at the Center for Asia Pacific Aviation.

"If there is conflict in the Middle East, the current resentment that is held by various parts of extremist Islam will extend further into Southeast Asia, and logically, there will be more attacks."

It is fear of a second regional attack that has hurt the Thai resort island of Phuket.

Immediately after the bombings, tourists destined for Bali flocked to Phuket instead. But the resort's specific mention in some government advisories as a potential terrorist target quickly upset that migration. Cancellations have been most noticeable from Australia and parts of Europe, such as the U.K. and Germany, said Sugree Sithivanich, the director of the Tourism Authority of Thailand in Sydney.

The short haul market has been more resilient. Singaporeans and Malaysians are still going to Thailand - "they still have confidence in our country," he said.