Smog casts shadow over SE Asian tourism

Smog casts shadow over SE Asian tourism

SINGAPORE (Reuter): Southeast Asia's suffocating smog is
casting an ominous shadow over the region's US$26 billion tourism
industry, tourism officials say.

Wild currency fluctuations in the region are also scrambling
industry forecasts, they add.

Officials in Malaysia, Singapore, Indonesia and Thailand --
countries most affected by smog from forest fires on the huge
islands of Sumatra and Borneo -- had earlier projected improved
tourist arrivals this year, but are now less optimistic.

"It's essentially a double whammy for the region, and I think
it's going to be grim days for a while yet," said Michael Lim,
spokesman for the Singapore Tourist Promotion Board (STPB).

"Before we had this environmental disaster, our forecast for
growth this year was between three and five percent over last
year's 7.29 million visitor arrivals," he said.

Last year, tourists spent $7.3 billion in the city state.

"It's a dynamic situation right now, no way for us to be able
to get a fix on figures," he said.

"We know there have been cancellations" and people avoiding
travel to affected areas, he said.

Singapore was well on the way to meet its target between
January and August this year with visitor arrivals of just over
five million, 3.3-percent above the same period last year.

But in August, arrivals dipped 1.5 percent to 645,092. "I
would not attribute that to the environmental pollution but to
the currency turmoil leading to a decline in ASEAN (the
Association of Southeast Asian Nations) arrivals," Lim said.

Recently regional currencies have come under heavy pressure,
with investors concerned economies may have been overheating.

Since July 2 the Thai baht has shed more than a third of its
value to the dollar. The Malaysian ringgit has hit record lows.
The Singapore dollar has also been hurt, but remained strong
against regional currencies.

Visitors to Singapore from Thailand and Malaysia, hardest hit
by the currency crisis, fell by 29 and seven percent respectively
in August, the STPB said.

An Indonesian tourism department official said pessimism has
grown because of the extent of the fires.

Some 600,000 hectares (1.5 million acres) of land has been
scorched as a result of fires set mostly by farmers and
plantation companies to clear land for agriculture.

Visitor arrivals in Indonesia in 1996 were 5.1 million, with
spending of US$6.31 billion, he said. Before the smog began to
take its toll, visitor arrivals rose 2.3 percent between January
and July at the seven main points of entry.

Thailand was already suffering lower growth in tourism before
confronting the smog and currency problems.

The Tourism Authority of Thailand (TAT) targeted for 7.5
million visitors in 1997, five percent over last year's 7.2
million, which brought in some $8.7 billion, a TAT source said.

"But we are not sure if we could achieve that target because
up till now, the figure for the first half of the year showed a
rise of only 1.5 percent," the source said.

"The best we could do now is 7.3-7.4 million. Because of the
fire in Indonesia, tourists from the U.S. and Europe have been
warned not to come to Southeast Asia."

But Thailand and Malaysia are trying to use their weaker
currencies to beat the impact of the smog by arranging special
promotional campaigns, officials said.

An official with Malaysia's Tourist Promotion Board said the
country initially aimed to raise the tourist total this year to
9.5 million to earn about 11.4 billion ringgit ($3.6 billion).

Last year, 7.1 million tourists went to Malaysia, which earned
the country 10.3 billion ringgit.

"A number of travel agencies have reported cancellations due
to the haze especially to Sarawak," the official said. "With the
haze problem, we are more bearish about achieving our target."

Sarawak, on the island of Borneo, has been in a state of
emergency since Sept. 19 due to very hazardous pollution levels.

The Malayan Nature Society said the state of Malacca, near
Sumatra, suffered a 30-percent fall in tourism revenue in August.
Hotel occupancy plunged by half.