The September 11th attack
Travel slowdown cuts wide swath across Asia
Bloomberg News Service
HONG KONG — Jeff Anderson, a New York sports director turned Hong Kong househusband, canceled a family vacation to Penang, Malaysia, after terrorist attacks in the United States.
"I'm just not going to be comfortable looking over my shoulder," said Anderson, who looks after two toddlers while his wife works at Goldman Sachs Group Inc. "I don't feel that I could totally relax. If I can't do that, what's the point of a holiday?"
Travelers are canceling vacations and business trips across Asia, decimating sales for airlines, car rental companies, hotels and convention centers. That's wrecking economies that were already shrinking and depriving some of the region's poorest rural communities of jobs.
Tourism may drop 10 percent, cutting 1.4 percent from the region's economy and costing 756,000 jobs in Southeast Asia alone, according to the London-based World Travel & Tourism Council. More than 63 million visitors came Asia in 1999 and spent $42 billion, according to U.N. figures.
"Tourism is probably going to be the industry that faces the most severe long-term shock," said David Cohen, an economist at Standard & Poor's MMS International in Singapore. "It's just one more problem these economies didn't need."
Malaysia, where tourism makes up 5.7 percent of the economy, canceled this year's Le Mans Race of Champions in November. It hasn't reported any disturbances among its large Muslim population.
Indonesia's government said it will ensure foreigners' security. Yet, on Friday, the Islamic Youth Movement called for foreigners to leave, saying the masses may react violently if the United States attacks terrorist bases in Afghanistan. The U.S. State Department said all non-essential government staff and families can leave at taxpayer expense.
Even nations with small Muslim populations are suffering. Thailand, where spending by 8 million visitors a year accounts for 6 percent of the economy, may not be able to meet its target of boosting tourism revenue to $7.2 billion this year.
Singapore, which depends on tourism for 5 percent of its economy, may see 3 percent of its gross domestic product shaved in the fourth quarter by the attacks, S&P's Cohen says.
The drop-off in business couldn't have happened at a worse time. The end of the summer in North America and Europe usually sees a pickup in business travel and escapes to tropical Asia.
"This is normally the busiest time of year for us, when we get a lot of business coming through," said Julia Record, a spokeswoman from Shangri-La Asia Ltd., which runs 38 hotels in Asia. "We haven't seen it yet."
Roy Praneen, an officer at Thailand's Department for Export Promotion, says last week's Jewelry & Gems Fair in Bangkok drew just 100 buyers, a tenth of normal.
Fadjar Affandy completed a $120,000, three-room villa amid rice fields on the Indonesian resort island of Bali in July, planning to rent it out. "So far only expatriates who already live in Indonesia have expressed interest," he said. "Expected arrivals from Japan and Singapore have been canceled."
Hotels and airlines have been hardest hit.
Even so, James Kaplan, vice president of hotel development for Asia-Pacific at Marriott International Inc., said room rates are stable in Thailand and other parts of Asia compared to the "seriously depressed" U.S. market. Japanese tourists are even booking more Asia trips, he said.
"A lot of those people who are planning to go to Hawai'i or Disneyland or wherever are now coming to places like Thailand or Malaysia," he said.
