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Weak Recovery Expected for Asia's Tourism Industry in 2010

The immediate outlook for Asia's tourism industry remains bleak as most major markets report sharp falls in visitor arrivals. There are hopes a recovery will come in 2010.

The Pacific Asia Travel Association expects visitor arrivals in Asia to fall by more than four percent this year, because the global economic slump and concerns about the swine flu discourage travelers.

Greg Duffell, president of PATA, says rising unemployment in many countries are causing the decline.

"The majority of countries are still showing negative growth and the majority are not showing any sign of a turnaround at this point in time they're looking for," Duffell said.

Many Asia tourism markets continue to see dramatic declines in traveler numbers. Singapore reports arrivals down more than 30 percent from a year ago. In South Korea, arrivals have declined as much as 40 percent some months this year.

In Japan, foreign visitor arrivals in May fell by more than 30 percent.

John Koldowski, PATA's director of strategic intelligence, says lower economic growth forecasts combined with a loss of business confidence and the spreading H1N1 flu virus have hurt both the business and leisure travel markets.

"We've actually got the economic situation out here - we've got this pincer movement with things like H1N1 coming in from the other side which is compounding that from a tourism perspective," Koldowski said. "It may not affect the GDP, but from a travel and tourism point of view all of these things make the traveller very, very nervous."

In Thailand, where foreign tourists contribute about six percent of gross domestic product, the number of arrivals is expected to drop to 12 million this year, instead of the 14 million originally expected.

Thailand's tourism industry also has been hurt by the country's political protests and insurgent violence in the southern provinces. Protesters closed Bangkok's airports for a week late last year, and in April forced the cancellation of a regional leaders meeting.

PATA's chairman, Phornsiri Manoharn, says tourists have been scared away.

"This year I consider the worst I ever seen in the industry for the past 39 years because it combined the southern problem and the political unrest all the time," Phornsiri said. "And the thing that stuck in people's mind about the closing of the airport, and also the financial crisis and H1N1, too."

Travel industry analysts hope that growing business confidence and the expanding domestic markets of China and India will help revive the industry.

PATA's Koldowski says Asia's travel market should grow by about four percent in 2010 but that will still be half the growth rate of two years ago.