Back to the beach?

BUSINESS
Tourism and Asia's tsunami

Jan 6th 2005
From The Economist print edition

A quick revival of tourism would help some countries recover

THIS is the time of year when millions of Europeans relax with a glossy travel brochure or, nowadays, surf the internet, to plan and book their summer holidays. It may seem heartless to dream about a sunny beach in the aftermath of the devastation and loss of life caused by the Asian tsunami. But tourism is one of the most important industries in Thailand, Sri Lanka and the Maldives—all badly hit by the huge tsunami—and the return of tourists will make it easier for their battered resorts to recover, at least economically, than poor Aceh, an Indonesian province where few travellers ventured.

The catastrophe is a heavy blow to the region's $100-billion annual tourism business. According to the World Travel and Tourism Council (WTTC), the industry accounts for some 19m jobs in South-East Asia, or 8% of employment. Almost four-fifths of the economy of the 1,190 islands in the Maldives depends on tourism. In 2004, tourism accounted for 12% of GDP in Thailand and 10% in Sri Lanka, according to the WTTC. The region is one of the fastest-growing areas for tourism in the world.

The first reaction of travel firms to the catastrophe was to try to find their travellers and bring them home as soon as possible. TUI, Europe's biggest travel company, found all its clients in the region alive. But Accor, a French hotel chain, was less lucky. Of the 720 guests and staff at its Sofitel in Khao Lak, Thailand, only 450 survived. Travel firms cancelled trips to the affected areas and offered refunds or alternative bookings. Rewe Pauschaltouristik, a German tour operator, has received over 20,000 phone calls from worried customers, said a spokeswoman. About 1,500 cancelled their trips. Some 2,000 shifted to a different location, such as the Caribbean.

Travel firms say hoteliers and local tourism officials are imploring them to send back people as soon as possible. They worry that tourists will stay away from unaffected areas too. Much of Thailand was not hit, though half of the hotels in Phuket have been destroyed. In Sri Lanka two-thirds of hotels south of Colombo were damaged. Perhaps one in seven hotels on the Maldives may have to be rebuilt.

It seems cynical to encourage people to travel, says Stefanie Rother, a spokeswoman at TUI, before adding that it would be terrible if an economic disaster followed the flood. TUI resumed flights to the Maldives on January 1st and plans to recommence flying to Phuket and Sri Lanka in February. Rewe will start flying to Phuket and Sri Lanka in February too, but will not send people to Khao Lak until the end of October. Kuoni, a Swiss tour operator, says it is taking new bookings for the affected regions, but they are, as expected, much lower than before. Last weekend Kuoni sent one group to the Maldives.

The British government is still advising against non-essential travel to Sri Lanka's eastern, southern and south-west coasts or to Thailand's west coast. Most British tour operators are offering clients alternative destinations or a refund on all departures up to January 31st. French tour operators plan to resume sending people on January 16th to some of the areas that were hit. There is no better way to help the people of this region than to go on holiday there, says René-Marc Chikli, head of the French association of tour operators.

How quickly can the region's travel industry get back on its feet? Peter Harbison, boss of the Centre for Asia Pacific Aviation in Sydney, is optimistic. After the terrorist bombing of tourists in Bali in 2002 the region's hotels, airlines and tourism officials started to co-ordinate their recovery efforts. It made more sense for airlines to discount their fares if hotels lowered prices too. This was fine-tuned after the outbreak of SARS in 2003. The area is now used to dealing with “constant shock syndrome”, says Mr Harbison. Before Bali and SARS it was hit by the 1997 Asian financial crisis and then the “haze”—a smog caused by the burning of forests in Indonesia. The region was also hit by the slump in travel after the terrorist attacks on September 11th 2001.

Tourism experts are confident that travel will recover faster from the tsunami than from SARS. Fear of an unknown disease is far tougher to manage than a rare natural disaster, however horrific. Even so, the hardest thing will be to change people's perceptions, says Adrian Mowat, an analyst at J.P. Morgan. A first test of the willingness of people to travel in south-east Asia will be the Chinese New Year in the second week of February—usually one of the region's busiest travel periods. It will be quieter this year, but at least those who do go will be told that they should not feel bad about making the trip.

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