Asian tourism will need ‘aggressive discounting’

TOURISM will eventually recover in the tsunami-hit areas of south-east Asia, but firms may need “aggressive discounting” to do so, a leading consultancy company forecast yesterday.

Deloitte also warned that tourists will need to think it is safe to return.

Without aid, owners of properties within the affected tourist areas will be unable to rebuild their businesses, the company said.

Deloitte said tourism areas affected by September 11, the SARS outbreak and the Iraq War had seen sharp drop in demand but a recovery within 12-18 months.

By the beginning of 2004, world tourism was almost back at pre-September 11 levels in terms of revenue per available room.

Deloitte’s tourism hospitality and leisure global managing partner Alex Kyriakidis said: “A tragedy of this nature is unlike any of the events that have shaken the tourism industry since September 11.

“The speed of recovery will critically depend on the restoration of infrastructure, clean water and sanitation as well as the rebuilding of shops, restaurants and services which are essential to support the industry.

“Where governments take assertive action to assist in the restoration process following major tragedies, experience has shown that tourists return. The role of governments at this time in working with the industry, providing support in the form of grants and other incentives will be crucial.”

Deloitte added that its analysis showed that for every one dollar spent in a hotel or resort, some 1.5 dollars of economic activity was created outside the property, such as taxis, restaurants and cleaning.

Mr Kyriakidis added, “The majority of travel in Asia/Pacific is intra-regional. In the short term, we would expect bookings by regional travellers originally destined for the affected regions to be diverted to other parts of Asia/Pacific. European tourists are likely to seek warm destinations in the Gulf, Caribbean and South America.”