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.