TIA publishes first new Travel Outlook Report

The first in a series of TIA special reports on critical travel markets was sent to members via e-mail and is also available on  the TIA online resource for information related to the war in Iraq. The first issue, Domestic Leisure Travel, reports that while leisure travel has been the "relative star in the U.S. domestic travel constellation," it has weakened as war approached and hostilities began. The report outlines the prospects for a rebound in different scenarios for the outcome of the war and the economy. Issue #1 will be followed by a report on business travel and one on international inbound travel to the U.S. and should be published at intervals of approximately two-weeks each.

Leisure travel has been the relative "star" in the U.S. domestic travel constellation, although its luster has dulled in recent months. While domestic leisure travel increased 1.7 percent in 2002, growth was much subdued in the waning months of the year, and weakened even further this year in the weeks leading up to the start of the war. In the short-term, leisure travel is likely to be depressed even more by a combination of factors:

• The U.S.-led war in Iraq put consumers on edge prior to the onset of hostilities. Leading consumer confidence indexes have plummeted to their lowest levels since the fall of 1993. (1)
• On March 17, the Department of Homeland Security upped the terror threat from yellow (significant but nonspecific threat) where it had been since February 27, to orange (a high risk of terrorist attack). The last time the country was at orange, international advance air bookings dropped more than 20 percent. (2)
• The public`s rating of the economy is now at a 10-year low. (3)
• In February, U.S. companies eliminated more than 300,000 jobs, the largest decline in jobs since the month following the 9/11/01 terrorist attacks, increasing the unemployment rate to 5.8 percent. (4)
• All of these factors have caused consumers to retrench.Consumer spending, which has been supported by super-low interest rates that have led to a strong demand for housing, cars and other durables, grew at a 1.5 percent rate during the fourth quarter of 2002, the slowest pace since the third quarter of 2001. Weakness in retail sales continued in January and February. (5)

In the short-term, expect the fear about war in Iraq and the rising threat of retaliatory terrorism here at home, coupled with the downward spiral in consumer confidence, to further delay recovery of the travel industry and to put a damper on spring travel. Also expect many of the emerging patterns in leisure travel to continue and perhaps even intensify:

• U.S. travelers are more reluctant to commit, postponing trip planning and fortifying the very late booking patterns seen in the last few years. The timing of this situation is important, as now is the time most Americans begin to make their summer vacation travel plans.
• Women remain far more personally concerned about the risk of terrorism than are men - significant in that women are the primary trip planners in most U.S. households. (3)
• The preference for domestic travel instead of travel abroad will intensify, as Americans` rising fear of being near hot spots or being stranded, combined with their concerns about the anti-Americanism being reported in many of our most popular international destinations, cause more Americans to shift to domestic destinations.
• While this could be a boost to some U.S. destinations, the numbers of travelers shifting to domestic destinations are likely to be too small to affect overall national performance since outbound international travel rarely exceeds 5 percent of total travel by Americans.
• Certain destinations such as those near to major population centers could benefit as closer-to-home destinations, accessible by highway, continue to gain in popularity. If gasoline prices remain high this spring, however, this market could be negatively affected as well.
• Most consumers anticipate an additional gasoline price increase and think that the increase will be temporary. If it is temporary, gasoline prices in and of themselves are unlikely to depress leisure travel. (3)
• Air travel - both business and leisure - is likely to continue to suffer. During the 1991 Gulf War, domestic air travel was depressed in terms of passenger volume for about a year, leading to four years of losses totaling $13.1 billion. This time around, domestic air travel has already been weak for almost two years and has yet to recover to pre-9/11 levels. Leisure air travel, while down in 2002, has been providing whatever "lift" we have seen, with losses only about half as great as for business air travel. (2)
• Air passenger revenues fell 26 percent below 2000 levels in 2002, and are now running at 1995 levels. If the war in Iraq lasts one quarter, forecasts are for a 15 percent decline in air traffic during that period, and total 2003 losses of $10.7 billion. (2)
• The U.S. lodging industry seems to be recovering a bit faster than the airline industry but has also weakened in recent months. U.S. hotel room demand actually increased 0.8 percent in 2002, but was still down 2.7 percent compared to 2000. This was driven by growth in leisure travel demand, while business lodging demand remained depressed. (6)
• Federal security alerts have had immediate short-term effects on lodging demand. Within one week of each of the seven federal security alerts between October 2001 and November 2002, U.S. hotel occupancies declined an average 3.5 percent. (7)
• Hotel bookings in the coming weeks of the war are expected to be down 5 percent from prewar projections. If the war is brief, hotel RevPar is likely to decrease 1.5 percent in the first half of 2003, followed by a return to growth in the second half. (7)
• Travelers will enjoy a "buyer`s market" as travel suppliers continue to offer new bargains, as well as flexible and liberal refund policies as they have been doing in recent weeks to spark business and quell customers` anxiety. Nominal (not adjusted for inflation) airline ticket prices are now at their lowest since 1987. (2)
• Overall consumer spending, including travel, is likely to slow further in the near-term. While travel has grown very slightly in volume (due to the relative strength of leisure travel), travel spending has been down. (8)

If we are lucky, a quick resolution to the war in Iraq could result in at least some recovery in leisure travel by the all-important summer season.

• In the initial days of the war we experienced a resumption of the "CNN" effect, as people opted to stay home and watch the war coverage rather than venturing out. 63 percent of Americans say they are following news of the war very closely, slightly below the 70 percent who did so during the early days of the 1991 Gulf War. (3)
• But, 18 months of existence in a post-9/11 environment has likely made for hardier consumers, who have learned to weigh the risks and rewards, and who are anxious to get on with their lives.
• The prospects for summer leisure travel now seem dependent on the length of the war and what the longer-term aftermaths turn out to be. If the war is over in a month or two, summer leisure travel could potentially be saved.
• If the fighting ends quickly most economists expect the economy to gain significant momentum. Once the situation in Iraq is resolved, businesses will likely resume spending and hiring, which will boost consumer confidence and economic growth, as well as consumers` willingness to spend, including for travel.
• In the absence of terrorist attacks here at home, Americans are likely to be anxious to resume leisure travel as soon as possible and may even boost their travel significantly because of pent-up demand.
• Based on a survey conducted in late January, consumers` interest in travel continues its upward trend. And consumer perceptions of the affordability of travel, while down significantly from late 2001 and early 2002 when a flurry of discounts were announced in response to the aftermath of 9/11, are still quite positive. (9)
• The consensus is that oil prices will plummet rapidly following resolution of the war. Falling gas prices, coupled with Americans` ever-constant preference for auto travel that has only become more entrenched over the last few years, could help stimulate auto vacation travel this summer.
• Travel by air, even for leisure, however, is expected by airline analysts to continue to remain depressed for quite some time to come.

But if the war continues longer than expected, if it is not the success that many expect, if other geopolitical uncertainties remain, or if terrorism resumes once again within our own borders, the prospects of a full recovery in leisure travel, and of a healthy summer season, would dim significantly.

Notes:

• Conference Board`s Consumer Confidence Index University of Michigan`s Index of Consumer Sentiment
• Air Transport Association
• Gallup Poll
• Bureau of Labor Statistics
• U.S. Department of Commerce
• Smith Travel Research
• PricewaterhousCoopers (PwC)
• TIA Travel Expenditure Estimates
• TIA Traveler Sentiment Index
  

Dusit Group’s Chanin Donavanik: More must be done to boost Thailand's tourism industry

TravelWeeklyEast.com  -  The Tourism Authority of Thailand (TAT) has lost sight of key issues surrounding the long-term development of Thailand’s tourism industry, preferring instead to look for short-term solutions that bring quick, tangible results, and instant praise for political do-gooders: So says Chanin Donavanik, executive director of the Dusit Group of hotels in an exclusive interview with  Davies Paul

“I have a different opinion from most people. The people at TAT are spending way too much money on marketing. It’s a very marketing-driven organisation. “They want to promote more people coming to Thailand – that’s easy and very short-term,” said Chanin, “but one of the things we have to do is build a long-term foundation for the country’s tourism industry.”

Chanin’s hard-hitting remarks are not made with vehemence or anger for TAT policy, but his long involvement in the travel business has left him concerned and passionate about the industry’s future – a future, he says, which has often fallen prey to the aspirations of statesmen looking for political leverage.

“Every government official, especially at the TAT, loves to say “Ah! We have 11 million people coming here, we have six to seven percent growth”. Everyone likes to hear that. They (politicians) want to get results right away, they want to get an image right away, and that’s a problem.”

Chanin believes a key element being neglected in Thailand’s tourism industry is the importance of providing support to local Thai businesses, whether they be new operators looking to establish a footing in the travel sector, or older companies seeking support for established projects.

Neglected
“I have nothing against big foreign operators coming in whether they are hotels or travel agents, but there has to be a plan to promote Thai business.”

Older destinations like Hua Hin and Phuket, he said, were being neglected at the expense of new destinations the government was keen to promote.

“Tourism in Thailand is moving very fast and the government is very slow to implement programmes that safeguard businesses – things like infrastructure and environmental protection.

“A good example is Hua Hin which has many hotels and has become a hot destination, but it has no main water treatment facilities. I’m not just talking about the hotels, I’m talking about the fishing villages, the factories – these kind of problems exist at tourist destinations all over Thailand.”

Chanin pointed to Koh Chang, the resort Island in Trat province dubbed by Thai Prime Minister Thaksin Shinawatra as the “Phuket of the East,” where the government has pumped millions of baht to develop it as a haven for the well-heeled.

“The government is putting a lot of money into it (Koh Chang) and that concerns me because we are not even sure what the government’s master plan for the island is. It’s spending half a billion baht on infrastructure for Koh Chang but what plan do they have set down for the island’s future?

At the same time older destinations are desperately in need of funds for development and are getting none.”

Mentioning a few people by name, Chanin said it is sad because there are a lot of “good people” in the private sector concerned about the state of Thailand’s tourism industry. But after many years of failing to draw the government’s attention to the pitfalls “a lot of good people” were “just really tired” and had adopted a “Mai ben rai” (never mind) attitude.

Former president of the Thai Hotel Association (THA) and currently chairman of the Committee on Tourism and Hotel Industries at the Thai Chamber of Commerce, Chanin said in the past he and others had put forward a number of proposals to the government but with no results, among them, a plan to set up a special fund for Thai businesses.

“It would have given Thai companies the ability to go after reasonable or cheaper loans to improve their operations. After that we tried to work with them on special training – special programmes to develop more Thai executives. We talked to the TAT – they have not done anything.”

On the TAT’s strategy to focus more on intra-regional travel and sell Thailand to destinations closer to home, Chanin said the TAT was spending too much money. Marketing Thailand within the region, he said, was like preaching to the converted.

“Nowhere in the region – from Japan down to Australia – nowhere can offer what Thailand has. If you talk to people in Hong Kong, in China, in Japan, in Korea, in Taiwan, down to Singapore – if you ask them which is your preferred destination to visit – Thailand always comes out as one of the top.”

Chanin said that while regionally it was good to keep “some attractive marketing promotions going” it was also important to maintain long-haul traffic from places like Europe. Flagging economies in destinations like Germany, plus expensive airfares and a shortage of seats, made it extremely important to continue marketing campaigns in European destinations.

“We need to continue to create incentives for people from Europe to come to Thailand because the economy there is slow,” said Chanin, adding that Europeans tended to stay longer than Asians.

“People in Asia – they usually come to Thailand for three to five nights, whereas Europeans stay a week, two weeks, sometimes three.”

But despite tough criticism, Chanin sees a glimmer of hope on the horizon in the form of the new Sports and Tourism Ministry and its minister Sonthaya Khunpluem.

“He listens and that’s important. He also knows more about tourism than many ministers before him and he’s still young enough so that he’s willing and would like to see changes.” 

Hilton warning rattles European hotel stocks

( Reuters) - Accor and other European hotel stocks fell on Friday after U.S. group Hilton Hotels cut its profit forecast and said war in Iraq was hurting its business, rekindling fears of tough trading in the industry.

"In the short-term people are going to travel a lot less and therefore I think we're going to see periodic warnings, cautions and little downgrades," said analyst Peter Joseph of brokerage KBC Peel Hunt.

The DJ Stoxx index of European leisure stocks .was down 2.2 percent by 1145 GMT, more than double the one percent loss on the market as a whole.

France's Accor  was one of the heaviest individual fallers, down 4.2 percent, while the UK's Hilton Group which has a global marketing alliance with its U.S. namesake, fell 4.4 percent -- also hit by rating agency Moody's decision to cut its outlook to negative from stable.

Spain's NH Hoteles and Britain's Six Continents  , owner of the Intercontinental and Holiday Inn chains, both dropped 2.7 percent. Millennium & Copthorne Hotels fell more than three percent.

Even before the conflict in Iraq, hotels were struggling to cope with a weak global economy and the aftermath of the September 11 attacks, which shook the travel sector.

Travel demand has also been hit in March as a highly contagious virus, which has killed 54 people worldwide, triggered government warnings to avoid visiting several Asian countries, the area worst hit by the disease.

KBC Peel Hunt's Joseph said hotel stocks were good value in the long-term but unlikely to attract a surge of buying interest anytime soon. "These stocks can stay good value for a long time if this conflict goes on," he said.

The warning from Hilton Hotels follows one from Starwood Hotels on Monday and news from European travel firm Thomas Cook on Wednesday that summer bookings were down 9.2 percent from last year's levels.

In its statement, Beverly Hills, California-based Hilton said revenue per available room would drop 4 percent in the first quarter from a year ago, down from the flat range Hilton forecast on January 27.

Earnings per share before one-off items would be about 2 cents to 3 cents, compared with a January forecast of about 5 cents, a spokesman said. (Additional reporting by Chris Brown in Madrid and Peter Henderson in Los Angeles

3rd Global Travel & Tourism Summit: Speaker Programme Launched

The World Travel and Tourism Council (WTTC) announced the line up of speakers and the agenda for its 3rd Global Summit that will take place  in Vilamoura, Portugal over the period of May 15th - 17th. 

Confirmed speakers include Neil Armstrong, the astronaut, the President and Prime Minister of Portugal (Jorge Sampaio and Jose Manuel Durao Barroso), the Chairmen of American Express (Ken Chenault), Carlson Hospitality Worldwide (Curtis Nelson), Continental Airlines (Gordon Bethune), Iberia (Xabier de Irala), Marriott (Bill Marriott), Rail Europe (Bernard Frelat), Six Continents (Sir Ian Prosser), Starwood Hotels and Resorts (Barry Sternlicht), TUI (Michael Frenzel) and over 30 more top executives of companies of similar stature. As you know, Travel & Tourism is the world`s biggest industry, accounting for nearly 200m jobs, and over 10% of world GDP, more than $3,500 billion. 

Collectively, the summit participants have the power to make or break local economies and to change fundamentally the experience of travellers and holidaymakers on a worldwide basis. The main objectives of the event are to help the Travel & Tourism industry to come together to rebuild confidence in the face of war, terrorism and economic slowdown, to turn challenges in to opportunities, to build a vision of `New Tourism` and initiate a strategy to achieve it. The event will be attended by top level company executives and government officials from around the world, and other people involved in the Travel & Tourism industry at the most senior level. Questions under discussion will include:

• What is the next big thing on the horizon for Travel & Tourism? What should be the Industry` vision for `New Tourism` and how will it achieve it?
• How will the industry address security without putting customers off?
• How much credibility does the Industry really have?
• What views will investors take on the Industry and who will invest where?
• How can the Industry properly exploit the rapid growth of China and India?
• What are the latest trends and what will their impact be?
• What is the Industry doing to create new Travel & Tourism experiences?
• What is the latest technology and what will its impact be?
• How can Travel & Tourism develop in a sustainable way?
• How can the Industry meet the interests of all its stakeholders and society at large?
• What progress is being made to optimise synergy between different modes of travel?

IH&RA 40th Annual Congress: “Managing Through Rapidly  Changing Times”  3-7 October 2003 in Cairo, Egypt

The International Hotel & Restaurant Association (IH&RA) is pleased to announce that it will host its 40th Annual Congress in Cairo, Egypt, 3-7 October 2003.  The Congress includes a four-day educational program featuring a speaker panel of leading hospitality industry professionals and industry analysts who will crack the riddle of “Managing Through Rapidly Changing Times.”  Congress delegates will also have the opportunity to expand their international business contacts via high-level networking sessions and enjoy an elegant social and sightseeing program in the land of the sphinx and pharaohs.

Panellists of the educational sessions will address the global outlook for the hospitality industry in the face of on-going world conflict including the impact of a war in Iraq.  Other crucial issues to be tackled include: maintaining safety and security in hotels and restaurants in the face of on-going terrorism threats; market implications in changing times - critical issues, challenges and solutions for manoeuvring in the complex hospitality and tourism marketplace; the rapidly changing profile of hotel and restaurant clientele with a focus on the emerging Chinese tourist; international market evolution with projections of where, geographically, the market is moving; financial repercussions of international market instability, managing through a recession and investment strategies for turbulent times; the future of ‘all-inclusive tourism’; human resources and the changing patterns in hotel & restaurant careers; and opportunities and outlooks in the global restaurant industry.* 

The IH&RA Congress will also offer a series of interactive “Mini-chats and Roundtables” giving Congress delegates a forum to express their views and concerns about the critical issues identified in the panel presentations and sessions.  These “mini-chats” are limited to just 10 persons, plus a moderator, thereby assuring that each Congress delegate voice is heard. 

The Congress Opening Ceremony will welcome as Guest Of Honour, HE Dr. Mamdouh El Beltagui, Minister of Tourism of Egypt, President of the World Tourism Organization’s Commission for the Middle East and Chairman of the World Tourism Organization Crisis Committee.  This Opening Ceremony will be just one of many elegant high-profile social events organized by the Congress hosts, the Egyptian Hotel and Restaurant Association and the Egyptian Tourism Federation.  Congress delegates will receive VIP treatment throughout the Congress with gala dinners organized each evening, one in the shadows of the pyramids, another on the bank of the Nile, followed by a Nile Cruise, and a Closing Ceremony featuring a breathtaking sound and light show. 

The Congress also offers sightseeing trips to the pyramids, the Cairo Museum with its exquisite collection of Egyptian antiquities, and a private tour of the historic city centre of Cairo. 

The IH&RA Congress is a truly international hospitality industry event, welcoming over 500 hospitality executives from around the world.  The profile of attendees includes chief executives from international and national hotel and restaurant chains; chief executives from national associations of hotels and restaurants; independent hoteliers and restaurateurs; hospitality industry suppliers and service providers; industry experts from leading international hospitality educational centres; hospitality industry consultants; and chief executive officers from international organisations.

“IH&RA is extremely proud to bring its annual Congress to Cairo in the year 2003,” said IH&RA CEO Alain-Philippe Feutré.  “This Congress has the full support of the Egyptian Tourism Federation, the Egyptian Hotel and Restaurant Association, and our members around the globe.” 

“Cairo is one of the most culturally-rich and dynamic metropolises of the world.  This event will be an opportunity to showcase everything that this city and the country of Egypt have to offer in terms of culture, history, art, hospitality service and security,”  said IH&RA Vice-President John Bell, former CEO of the Caribbean Hotels Association. 

For more information about the IH&RA 40th Annual Congress or to receive information about sponsorship or exhibition opportunities, please contact Béatrice Maraval, IH&RA Director of Operations, at maraval@ih-ra.com or tel: + 33 (0) 1 44 88 92 23 or visit the IH&RA website: www.ih-ra.com/events.
*Program subect to change. Please visit the IH&RA web site www.ih-ra.com/events for updated Congress information. 

The International Hotel & Restaurant Association (IH&RA) is the only global business organisation representing the hospitality industry worldwide.  Its members are national hotel and restaurant associations throughout the world, and international and national hotel and restaurant chains representing some 50 brands.  Officially recognised by the United Nations, IH&RA monitors and lobbies all international agencies on behalf of this industry, estimated to comprise 300,000 hotels and 8 million restaurants, employ 60 million people and contribute 950 billion USD annually to the global economy

www.ih-ra.com

Thailand:  Tourism worries

The Economist  -  Concerns over travel safety during the war in Iraq are causing tourists to cancel holidays in Thailand, depriving the economy of a key source of foreign income. If the hostilities in Iraq are prolonged or lead to an increase in South-east Asian terrorism, the economic impact could be substantial. Furthermore, if an emerging global health scare over a strain of pneumonia linked to Asia is not rapidly contained, and in particular if it results in international travel restrictions, the damage to the Thai tourism industry could be even greater.

According to the Tourism Authority of Thailand (TAT), since the start of the war in Iraq around 50,000 visits have been cancelled for April to June, and hotels are experiencing cancellation rates of 5-10%. The TAT estimates revenue lost so far for this period at Bt1.2bn (US$28m).

Such numbers, on their own, will not hurt Thai tourism receipts significantly. Approximately 10.8m foreign tourists visited Thailand last year, generating total revenues of Bt361bn (US$8.4bn), according to a TAT estimate released in March. If cancellations do not continue to increase rapidly, and if the war in Iraq is over quickly--as the Economist Intelligence Unit believes is likely--the direct drag on revenues may therefore be negligible: probably less than 0.5% of the annual total.

But a comparatively high reliance on tourism makes the Thai economy more vulnerable to a slowdown in the sector than its regional neighbours. Tourism accounts for about 6-7% of GDP, double the share in Indonesia. The hotel sector alone employs about 500,000 people and tourism is the country's largest single export earner.

Events in the Middle East are unlikely to damage tourism substantially, but the possibility cannot be ruled out. Currently we expect an allied victory in Iraq to come relatively swiftly--in no more than a couple of months. But the manifold uncertainties of war mean that this cannot be assured. A messier and more protracted conflict could discourage air travel and overseas tourism for far longer, in turn reducing arrivals to Thailand. A long war with high numbers of civilian casualties could increase the risk of Islamist terrorism in South-east Asia, which again could act as a drag on travel. Foreigners' perceptions of risk may also be coloured by the fact that Thailand's main beach areas are in the south of the country, home to a Muslim population of 4m.

Adding to these concerns is the new threat of a pneumonia epidemic in the region. An outbreak of a mystery strain of the disease, known for now as severe acute respiratory syndrome (SARS), is causing concern globally but especially in Asia. The outbreak, believed to have started in China, has been notably disruptive in Hong Kong (where at least ten people have died) and in Singapore (where the government has forcibly quarantined more than 700 people). But it has also been reported in Thailand and Vietnam.

So far, the number of cases in Thailand has been tiny. But if the global spread of the disease is not contained quickly, the number could rise. A prolonged regional public-health scare would in any case affect tourism, either directly or indirectly. The disease's association with Asia could scare tourists away from Thailand. The World Health Organisation (WHO) may also recommend restricting international travel to limit the spread of the disease, thereby directly reducing arrivals in the country (although so far Thailand is not classified as an "affected area", so it is uncertain whether such measures would apply to it). The WHO has not yet called for travel restrictions, but is assessing the situation daily to see if they are necessary. Finally, if the virus continues to spread, Thailand itself may have to restrict the entry of visitors. This could be particularly worrisome owing to the high proportion of Asian visitors--more than 60% of the total. The fact that China is rapidly increasing in importance as a source of tourists does not bode well, given that the outbreak is believed to have originated there.

The risks to the tourist industry both from the Iraq war and the pneumonia scare should not be overstated, however. First, according to the TAT most cancellations so far have been from Westerners. Yet arrivals from Europe and the Americas accounted for only about 29% of the total last year. TAT officials have played down speculation that Thailand might be able to attract visitors from other Asian markets. Nonetheless, the high share of Asian visitors may also provide a revenue buffer (although they tend to spend less per capita than their Western counterparts).

Second, Thailand has proven reasonably resilient to earlier threats to the travel industry--such as fallout from the September 11th 2001 terrorist attacks in the US and the October 2002 bombings in Bali, Indonesia. Although the hotel industry reported heavy cancellations in the immediate aftermath of the Bali attacks and several foreign governments issued travel warnings for Thailand, the industry appears to have recovered quickly. Despite the attacks, tourist arrivals in 2002 increased by 7.3% over the previous year, exceeding the government's target. The previous year they increased by 5.8%, despite the impact of the events of September 11th on global travel.

Ironically, Thailand may benefit at some level from geopolitical worries. It is perceived as largely free of the political uncertainty and instability of neighbouring Indonesia and the Philippines, which otherwise have similar tourist attractions. However, this is offset to some degree by the fact that the beach resorts, as mentioned, are close to Muslim populations

Prospects for the Thai tourism industry in the near term will nevertheless remain uncertain. But it is not for want of trying. The prime minister, Thaksin Shinawatra, has given tourism a higher profile than previous administrations. It is seen as one of the sectors that can lead the economic recovery because it does not rely on imports and is relatively labour-intensive. The government has launched a number of promotional initiatives to boost the industry. These are backed by infrastructure projects, including the new Suvarnabhumi airport, faster immigration processing and the upgrading of Thai Airways International, the national carrier. Work finally began on the controversial new airport in December 2001, and it is scheduled to open in 2005 at a cost of Bt36.67bn. The terminal is designed to handle 36m passengers a year.

These efforts in part reflect an attempt to restore (slightly) waning tourist appeal. International arrivals have continued to grow strongly--having roughly doubled in the past decade. But Bangkok is now largely visited en route to beach resorts because of its high level of pollution. Environmental degradation is also affecting the islands and seaside resorts.

Notwithstanding these problems, the TAT in March targeted a 6% rise in visitors in 2003, to more than 11m.

Hotel occupancy down 10-15%

Asian flu expected to compound woes

Bangkok Post  -  Travellers' worries over the US-Iraq war and the mystery virus affecting the region have cut hotel occupancy rates by 10% to 15% nationwide for the first quarter compared with last year, according to the Thai Hotels Association.

Hardest hit have been hotels in Bangkok and the southern provinces.

THA secretary Prakit Chinamornpong said some Bangkok hotels reported a 30-40% drop in occupancy rates while hotels in the South had 10-15% fewer guests than in the first quarter last year.

Hotels and resorts in the North and along the western coast were also affected with 10% declines.

However, hotels in northeastern provinces reported relatively little impact as most cater mainly to domestic travellers.

Hotels in Pattaya, Cha-am and Hua Hin, meanwhile, have actually reported gains, as more Thais have chosen to travel locally rather than go abroad.

Mr Prakit said overseas visitor markets showing significant declines included Japan, the United States, Europe and Israel. He said no Israelis had visited the country since the tensions between the United States and Iraq started to rise late last year.

``Normally, many Israelis travel to Mae Hong Son during the New Year period but the number has dropped to zero,'' he said.

At the same time, visitor numbers from the US and European markets are down, particularly British tourists who usually represent the largest number of visitors to Ko Samui. But this year, more German tourists came to the southern island, reflecting the impact of the UK's involvement in the war, he said.

For the coming Songkran holiday, Mr Prakit said bookings so far were lower than last year, especially at hotels in Bangkok, which were expected to have 45% occupancy rates, compared with 50-55% during the festival last year.

Somchai Chonkara, head of Weekend Tour, estimated that the 50,000 to 60,000 European tourists expected for the Songkran festival would completely pass up trips to Thailand.

The number of Asian visitors during the holiday, recorded at 80,000 last year, is expected to be cut by half.

Concern over Severe Acute Respiratory Syndrome (Sars) has led to flight cancellation by several airlines to Asian countries, especially China, Hong Kong and Singapore. Charter flight travellers to Thailand could also decrease by 25,000, Mr Somchai said.

``Overall, we anticipate roughly 100,000 visitors could disappear during Songkran, causing a big loss in the country's tourism income in the range of 60-100 billion baht this year,'' he said.

Meanwhile, domestic travel is likely to be flat or show slight growth of 5% in the period.

Mr Somchai urged the government to ask Thai Airways International and other airlines to resume flights they have cancelled, not only to boost tourist arrivals but also to improve the image of the tourism industry.

African tourism crumbles under Iraqi war

Nairobi - After a week of war in Iraq, the tourism industry in Africa, often the continent's economic mainstay, has been hit by falling reservations and growing concerns about safety.

Some countries, however, such as South Africa, hope to capitalise on the current climate, using their geographical distance from the battlefields as a selling point.

North Africa has been especially affected by the outbreak of hostilities in the Gulf.

In Egypt, for example, hotel occupancy rates have nosedived from the 80 percent usually recorded at this time of year to about 30 percent.

In Tunisia, the industry had in any case yet to fully recover from an April 2002 attack on a synagogue - claimed by the al-Qaeda network of Osama bin Laden - which killed 21 people including 14 German tourists.

Trade sources said foreign tourist numbers fell by seven percent in 2002 and that the war was set to have a considerable impact on Tunisia's overall economic growth.

Authorities in Morocco set up a crisis team just before the start of the war to bolster one of the country's major sources of foreign currency.

Tourism generated $2-billion in Morocco in 2002.

In Marrakesh, visited by almost a million tourists in 2002, the sector began to feel the pinch well before the shooting actually started, with a sharp decline starting three months ago.

In all these north African countries, authorities have been trying to drum up domestic trade to compensate for the shortfall in overseas visitors.

South of the Sahara, bookings have also dropped in the most popular destinations, such as Kenya and Tanzania.

In Kenya, where business has already suffered on account of deadly attacks in November 2002 in Mombasa and August 1998, and by travel warnings issued by the United States and other Western nations, the government said the war has "sent jitters to the tourism sector."

Hotel bookings on the coast stand at 50 percent, against a 70 percent average for the time of year.

The Iraq war "has had a negative impact on tourism. There are no new bookings and there is apprehension on flights," said Mombasa Coast Tourism Association chairperson Kuldip Sondhi.

In neighbouring Tanzania, where the US embassy was also targeted on August 7, 1998, many cancellations have been recorded, especially on the semi-autonomous island of Zanzibar, which has also been the subject of travel advisories regarding terrorist activity.

Hotel reservations and tourist arrivals in the Indian Ocean island of Mauritius fell by 10 to 15 percent over the last couple of months.

Industry sources in South Africa said trade from visiting tourists was still booming, but travel agents reported a slump in those travelling abroad for leisure.

"South Africa is the only place to go on holiday at the moment, because it is a neutral country well away from the northern hemisphere missile routes," said Gail McCann, who heads the country's Tourism Services Association.

In Senegal, the head of the Hotel Owners' Association, Mamadou Racine Sy, said the southern coastal resort of Cape Skirring had suffered doubly because of the Iraq war and the crisis in Ivory Coast.

"Senegal, Ivory Coast, it's just Africa, nobody makes a distinction," he said.

"But we hope tourists will shift to Senegal" from countries deemed more dangerous," he added.
- Sapa-AFP

HORECA, the regional Hospitality and Food Forum will be held in due date this April, despite war climate

Mrs. Jumana Dammous-Salame, the administrative director of Hospitality Services and exclusive organizer of the largest annual hospitality and food forum, confirmed that HORECA would doubtlessly take place from the first until the fourth of April 2003 at BIEL. She further clarified that none of the foreign, Arab or Lebanese exhibitors cancelled any of their bookings for the stands, which, contrarily, recorded a net increase this year.

Mrs. Salame delivered this statement in response to journalists who were inquisitive about the current preparations for the event in light of the apprehension and the nervousness the region is witnessing due to the war against Iraq.

Salame who was invited to a brunch yesterday at the Rotana Gefinor Hotel to meet with a number of journalists, acknowledged that “the commitment of participants to the FORUM’s activities illustrates the growing interest of Arab and foreign investors in Lebanon”. She also affirmed that this blooming interest is primarily due to the reassuring statements conveyed by security and political analysts and observers, hence promoting investment opportunities in Lebanon.”

Finally, Salame concluded that this year, HORECA will attract around 250 exhibitors from around the world, including Lebanese and Arab participants, and exhibitors from Holland, Australia, the United Arab Emirates, Thailand, France, Spain, etc., thus enhancing HORECA’s standing as the largest and most regional forum.

For more information, please contact Francoise Eid or Nada Merhej at ASDAA Public Relations: Tel: 00961-1-216306 or 216318 Fax: 00961-1-216331 e-mail: f.eid@asdaa.com

You may also contact:
Josette Hikri, Hospitality Services
Tel: 00961 1 480081, Fax: 00961 1482876,
E-mail: admin2@hospitalityservices.com.lb
Website: www.hospitalityservices.com.lb

Flu scare spurs sell-off in Hong Kong listed Hotel Groups

SCMP  -  Shares in hotel giant Shangri-La Asia plunged 9.64 per cent  on growing fears the outbreak of atypical pneumonia is hurting regional tourism.

The stock fell 55 HK cents to $ 5.15 despite Friday's announcement full-year net profits had surged 58 per cent to US$ 93.07 million.

"Investors are worried about the decline in room bookings for Shangri-La's hotels due to the recent pneumonia outbreak," said Kenny Tang Sing-hing, associate director at Tung Tai Securities.

He said Shangri-La had hotels in Hong Kong, the mainland and across Southeast Asia - areas affected most by the virus.

Shangri-La owns 17 hotels in China which accounted for 31.13 per cent of group turnover of US$ 600 million last year. Its two Hong Kong hotels contributed 23.61 per cent of revenue.

Hongkong and Shanghai Hotels - owner of The Peninsula, the Kowloon Hotel and the Repulse Bay Complex - yesterday fell 2.08 per cent to $ 3.525. Harbour Centre Development, which runs The Marco Polo Hongkong Hotel, dropped 2.72 per cent to $ 5.35.

Mr Tang said there were reports of travellers delaying or cancelling flights and hotel room bookings in the region.

Atypical pneumonia has killed 19 people and infected 496 worldwide excluding China, according to the World Health Organisation and local health officials.

Reuters said the disease had killed 31 people and infected 792 in Guangdong province by the end of last month.

"Investors are concerned of a potential decline in Shangri-La's occupancy rates in the coming peak season of Easter and the May 1 Labour Day," Mr Tang said.