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Asia tourism faces rough road in 2009

Across Asia, hotels, airlines and tourism operators are bracing for another tough year as the financial crisis keeps long-haul visitors at home and regional travelers take shorter trips.
/ Source: Reuters

Across Asia, hotels, airlines and tourism operators are bracing for another tough year as the financial crisis keeps long-haul visitors at home and regional travelers take shorter trips.

"There'll definitely be a drop in business. Fewer tourists is a reality," said Laurence Lai, the owner of two photo galleries at Hong Kong tourist hotspots, including the Star Ferry pier, selling iconic images of the former British colony.

"I expect a 30 percent fall at least. I'm having to shift my strategies to confront this financial tsunami, but you just have to stand firm and face the winds," added Lai, who relies on tourists for half his sales.

Asia's blend of diverse cultures, geography, bargains and exoticism — with travel gems ranging from snowy Himalayan kingdoms to neon-lit capitals, crumbling Khmer ruins and powdery beaches — have made it one of the world's fastest growing tourism regions in recent years, along with the Middle East.

But since the downturn intensified last year, travel markets spanning Hong Kong, Thailand and India have suffered sharp contractions, at times worsened by political turmoil, with many projecting negative growth in 2009.

Hong Kong, now one of Asia's top tourist hubs with 29.5 million visitors last year, is predicting visitor arrivals to dip 1.6 percent in 2009, though a steeper drop of 9.2 percent is forecast for non-Chinese visitors.

Singapore's tourist arrivals, meanwhile, fell 2 percent last year with more gloom expected, while Thailand and Malaysia both expect 9 percent drops in visitors this year.

Many travelers face tighter budgets
The U.N.'s World Tourism Organization (UNWTO) has described the Asia-Pacific region's performance in 2008 as having "deteriorated most rapidly," compared with the Americas, the Middle East, Europe and Africa, with tourism demand expected to be impacted further in the short to medium term.

The International Air Transport Association (IATA) has warned global airlines face their worst business crisis in 50 years with carriers facing possible collapse, revenues tumbling and hundreds of thousands of jobs at risk.

IATA'S director-general said in December some 300,000 to 400,000 jobs were at risk among some 32 million or so people now employed around the world in air transport, travel and tourism sectors.

Despite the extremely fragile situation, the Pacific Asia Travel Association (PATA) expects Asia, which lured around 280 million international arrivals in 2008, to bounce back and enjoy 4 percent to 5 percent average growth over the next three years.

"We are extremely cautious in our optimism, but we still believe it'll be above the line over the next couple of years," said John Koldowski, director of the Strategic Intelligence Center for PATA.

But Koldowski said more budget-conscious travelers cutting back on lengths of stay and spending could spell worse-than-expected pain for tourism-reliant businesses such as retailers, catering and hotels.

Hotel occupancy rates in the Asia Pacific region fell to 66.7 percent last November, versus 76.4 percent for the same period a year before, according to STR Global.

"While we're saying the (arrivals) numbers may still show some growth, we're very conscious of the fact that people are changing their habits and you can't expect the same amount of revenue out there," he added.

The UNWTO says it expects the decline in trip duration and spending to be "more pronounced" than the fall in arrivals.

American tourist James Standen is an example of this.

Snapping shots of Hong Kong's cityscape with his wife on Victoria Peak, he said the tanking U.S. economy hadn't put them off their 10-day trip to Asia, but they delayed coming until after the start of the new year to save on airfares.

"The economy hasn't really bitten us ... but it cost about half as much by coming later."

Political instability strains tourism
Political instability and shifting government policies have also exacerbated the strain on the tourism sector in countries such as Sri Lanka, India, Thailand and Macau.

The weeklong siege of Bangkok's airports tarnished Thailand's reputation as a tourist haven, and caused around a million foreign visitors to cancel or go elsewhere.

Thailand's Central Bank recently forecast tourist arrivals could fall 9 percent this year to 12.8 million, the worst year since 2005 after the tsunami disaster.

In India, 179 people, including scores of tourists, were killed in November's Mumbai attacks, when gunmen targeted luxury hotels and other popular tourist spots in India's financial capital. The gloom has since spread to places such as Goa, one of the country's top tourist draws where visitor arrivals fell 25 percent during the peak season, according to officials.

"We did see a slowdown in foreign tourist arrivals because of the economic slowdown and later, because of the Mumbai attacks," Ralph DeSousa, who heads the travel and tourism association of Goa, told Reuters by phone.

"When you go on a holiday, you want to be relaxed, and all these factors don't allow you to be that," he added.

In the gambling mecca of Macau, whose remarkable casino boom has helped triple its annual arrivals over six years to just over 30 million last year, sudden visa curbs on Chinese visitors by Beijing's communist leaders last year have dampened growth.

"In 2009, if we can have the same number as 2008, or a little decrease or a little increase, I think we have achieved good results," said Joao Manuel Costa Antunes, the director of Macau's Tourist Office told reporters.