Asia Pacific Travel Industry Sees Recovery By End of Year

By Ron Corben

Bangkok
02 April 2009

The top travel industry group in Asia expects a modest recovery in travel to the region late this year, despite the global financial downturn.  Travel analysts say the industry faces business closures as part of the economic rebound.

The Pacific Asia Travel Association says the industry in the Asia-Pacific region could show signs of recovery by the end of 2009.

A new PATA report says in Southeast Asia, international arrivals will grow to almost 77 million by 2011, up from more than 62 million in 2007.

Travel agents, hotels and airlines have faced tough times, with visitor arrivals to the Asia-Pacific region falling nearly three percent in late 2008.  Destinations such as Thailand, Cambodia and Hong Kong, heavily dependent on tourism, have particularly suffered.

PATA's strategic intelligence director, John Koldowski says the association sees late 2009 as a "turning point" for the regional travel industry.

"We believe that we might see signs of [recovery] that happening towards the end of the third quarter of this year, quite possibly the fourth quarter, but we are probably talking first and second quarter of [20] 10 before we can start to see some of that movement that is consistent," said John Koldowski.

But, he warns, the hard times are not over yet.

National tourism organizations in the region have countered the slump with new advertising.  Promotions by South Korea lifted arrivals by 25 percent in January and February.  Similar promotions underpinned the industry in Taiwan and India.  But arrivals to China, Thailand and Japan all declined.

The International Aviation Transport Association says global passenger traffic will contract by two percent this year, but recover in 2010.

In 2008, airlines suffered an overall loss of nearly $8.5 billion, but the loss is expected to shrink this year to about $5 billion.

Koldowski says he expects the travel industry to face major structural changes as it recovers.  Some airlines, hotel chains and other businesses may fail or have to change their operating practices.

"The industry will come through it but it will be a radically different industry," he said. "The aviation sector could be very, very different in its guise.  However, I think we will come through it but not all businesses will survive."

By 2008, tourist arrivals to the Asia Pacific region had nearly doubled, to 385 million, from a decade earlier.  During the same period, global travel rose by one third.