Southeast Asia tourism revives
Lunar New Year and respite in terrorism bolster resorts
By Linus Chua (Bloomberg News)
Wednesday, January 29, 2003

SINGAPORE: Hotel operators and travel agents in Southeast Asia say bookings have surged for the Lunar New Year holiday, evidence of a rebound in regional tourism three months after a bomb attack in Bali, Indonesia killed more than 190 people.

Travelers such as Dawn Dekle help explain why. The 36-year-old American professor at Singapore Management University ignored a U.S. travel warning and spent five days relaxing in Bali and getting a massage at the Four Seasons Hotel. "I would definitely go back," she said.

The Sheraton in Bali, run by Starwood Hotels Resorts Worldwide Inc., and other Southeast Asian resorts say vacationers are returning for the Lunar New Year - two weeks of celebrations and family reunions that shutter businesses across the region and make it one of Asia's busiest travel periods.

"After a while, the fear just goes away as people who travel take risks," said Tan Chong Koay, chief executive of Pheim Asset Management Sdn., which manages about $400 million in Malaysia and Singapore. "If nothing happens again, then the tourists will come back."

That's already happening in Bali and at resorts such as Le Meridien on the island of Phuket in Thailand, where rooms are filling up as businesses from China and South Korea to Singapore prepare to shut down.

While the official holidays cover two days in Singapore and three in Hong Kong, many smaller businesses close longer and workers take vacations in the two weeks from Saturday.

Take the Sheraton, at the Nusa Dua Beach on Bali's southern coast.

"We're already booked to capacity," said sales director Aryo Indarto. "Things should start brightening up" even after the holidays as travelers start to feel safer in Bali again.

Countries such as Indonesia, Malaysia and others that are the target of travel advisories could take longer to recover, analysts said.

A potential U.S.-led attack on Iraq might also raise the risk for tourists in Asia and disrupt travel worldwide.

Tourist arrivals in Indonesia fell to a three-year low in 2002, according to government data. About 4.8 million people visited Indonesia last year, from 5.1 million in 2001.

That pushed Indonesian tourism earnings down 37 percent to $3.4 billion in 2002. This year, that figure is expected to fall to as little as $2.7 billion.

Thailand expects to get 4.6 percent fewer tourists in the fourth quarter than in the year earlier after Australia, Japan and other countries advised against travel there.

The return of business travelers - who typically spend more than other tourists on accommodation and food - is key for countries such as Indonesia, Singapore and Thailand, where tourism accounts for about a tenth of their economies.

But they are among the visitors most sensitive to risk because corporate travel policy tends to be conservative, analysts say.

Still, some operators report a rise in international corporate bookings. At the Bali Sheraton's convention center, the island's largest, about 1,000 Pacific Travel Association members will attend a conference in April, Indarto said, the biggest since the October attack.

A Web site that books one in every 50 hotel rooms on Phuket said reservations almost doubled for the coming weekend to 800 rooms from a year earlier.

"Suddenly, we saw a huge surge in bookings two weeks before the Chinese New Year holiday," said Neil Cumming, who runs the Phuket.com Web site that sells rooms for hotels such as Le Meridien, owned by Singapore-based Hotel Properties Ltd.

Singapore Airlines Ltd. carried 1.4 million passengers in December, its highest monthly total in more than a decade and a 15 percent increase from November.

The figure is also up 10 percent from a year ago.

Because the travel recovery is being driven in part by discounts, it will not immediately translate into similar earnings gains at airlines, hotels and retailers, analysts say.

Dekle of Singapore Management University paid $150 a night for her room at a Bali resort - 70 percent less than she would have six months ago. Phuket hotels have cut rates 15 percent, Cumming said.

For a four-night stay in Bali, L.K. Lim, a Singapore banker, paid 450 Singapore dollars ($259) including her airfare - half what she would have paid before the Oct. 12 attack.

"Everyone was asking if I was sure I wanted to go," Lim said.

"When we reached there, it was OK - I felt it was safe enough."