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Asia Pacific Travel Industry Rides Boom Despite Terrorism Worries

  • Ron Corben

The travel industry in the Asia-Pacific region boomed in 2004 because of the growing China market and overall global economic growth. The thought of a potential terrorist strike is never far from the minds of many in the industry.

The World Tourism Organization says the travel industry in the Asia-Pacific region grew faster than anywhere else in the world, up almost 40 percent compared with 2003.

Officials at the organization say the tourism business globally has "returned to normal," since 2003, one of the travel industry's worst years in decades. Asia was hit hard that year by the outbreak of Severe Acute Respiratory Syndrome,or SARS as well as the war in Iraq and fears of terrorist attacks.

John Koldowski is the spokesman for the Pacific Asia Travel Association, PATA. He says that even compared with less turbulent years, 2004 has been exceptional for the travel industry.

"Without question it is probably the best year we've seen in the Asia Pacific region in our history, certainly in PATA's 53-year history," said Mr. Koldowski.

PATA expects in excess of 300 million international arrivals in the region by the end of this month. That compares with about 260 million in 2002.

The growth has come despite higher fuel prices, which forced up plane fares and other costs for travelers. Analysts warn that high oil prices, however, could be a problem in 2005, cutting profits and raising fares.

Patrick Imbardelli, managing director for the InterContinental Hotels Group in the Asia-Pacific region, says discount airlines and travel by China's growing middle class drove the expansion.

"Low-cost airlines are getting more and more involved - it's stimulating [the industry]," he said. "What's happening with China, focusing on its future and now being very much part of the world economy, has reinforced the tourism business activity."

InterContinental Hotels operates 47 hotels in China and plans 40 more. Mr. Imbardelli says the boom in travel has led to millions of dollars being poured into China's tourism infrastructure.

But the growth is not limited to China. Ed Hubennette is the vice president in Asia for the Marriott International hotel chain.

"We've seen travel returning from all over parts of the world, be it out of Australia coming up north, Japanese, which historically has been very strong for this part of the world, in addition to travel coming from the U.S. and from Europe. So it's been a great year," said Mr. Hubennette.

The tourism industry has recovered from the bombing two years ago on the Indonesian island of Bali that killed more than 200 people, mostly Western tourists, as well as recent attacks in the capital Jakarta.

Industry experts say travelers seem undeterred by warnings of possible terror attacks in countries such as Indonesia, Thailand and the Philippines. Those three countries all experienced separatist or sectarian violence in the past year.

Indonesia's Culture and Tourism Ministry says that although Australia warned of possible attacks over Christmas in Indonesia, tourist arrival numbers are little changed. The United States, Britain, Japan and New Zealand also have warned of possible violence.

Marriott's Mr. Hubennette says terrorism remains the big worry for the travel industry.

"The only risk probably being the issues of terrorism as we move forward," he explained. "Obviously a little bit less than what it might have been two to three years ago, but as we get news reports of the security risks, that tends to have a dampener on whatever country or whatever areas is getting the warning."

PATA's Mr. Koldowski says a terrorist strike in the region could be devastating to tourism.

"As we know from previous past history things can come out from left field overnight and change the landscape dramatically, so we still have to be very aware of that," he added.

He says the industry is bracing for incidents that would quickly change the buoyant outlook for the regional travel.