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Travelers Returning to Hong Kong After SARS Crisis

Travelers are returning to Hong Kong in larger numbers than expected since the territory was declared free of Severe Acute Respiratory Syndrome. Airlines and hotels say heavy discounts have played a crucial role in bringing visitors back.

The terminal at Hong Kong's Chek Lap Kok airport once again is busy with travelers, a welcome sight after the Severe Acute Respiratory Syndrome outbreak sent arrival figures plummeting earlier this year.

Many governments and the World Health Organization warned travelers to avoid Hong Kong, mainland China and other cities with SARS outbreaks. In Hong Kong, airport traffic fell by more than 70 percent in May as airlines canceled flights because of shrinking demand.

For instance, the American carrier United Airlines cut three of its normal four flights a day to Hong Kong. The WHO dropped its SARS warning for Hong Kong in late May, and visitors began to return.

Mike Schwab, United Airlines' vice president for Asia and the Pacific, says the recovery has been swifter than expected. "Particularly business travel has rebounded pretty quickly as there had been a pent up demand by business travelers who had been postponing their trip by two, three or sometimes four months," he says. "The first week in September we are re-introducing our full transpacific schedule and going back to our pre-SARS capacity."

An executive at one Hong Kong's airline says lower fares were needed to coax mainland Chinese passengers back to the city, so profits are not rising quickly.

Spokeswoman Laura Crampton says Dragon Air operated only 36 percent of its usual flights in May. "In August we're operating around 82 percent of planned frequencies and in September it will be around 90 percent. But in terms of profitability for the carriers, the yields are very weak," she says.

Hotel occupancy rates are bouncing back, after falling by more than half during the SARS outbreak. However, discounts are cutting into profits.

"We've actually done better than expectations," says James Li, who is with the Hong Kong Hotels Association. "For example now in the month of August we are running close to about 80 percent in average room occupancy rate, this is citywide but we are still lagging behind in room rates." He says recent speculation that Hong Kong might soon run out of hotel rooms because of an increase in mainland tourists is unfounded.

Mr. Li says that only 30 percent of mainland tourists stay in hotels. Others stay with friends and relatives, and many are in Hong Kong only for day trips.