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Asia Pacific Tourism

World economic slowdown will have ‘moderate impact’ on Asia Pacific tourism, WTTC says

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Yusof Sulaiman  Apr 07, 2008

(eTN) - The World Travel & Tourism Council (WTTC) has warned that the tourism industry in Asia Pacific should expect a "moderate impact" because of the expected global economic slowdown following worsening US economy, weak dollar, higher fuel costs and concerns about climate change.

According to the WTTC, growth in the Americas and Europe are expected to fall below the world average of 2.1 percent, but Asia Pacific and other emerging markets including the Middle East can look forward to an increased business and leisure travel. "The Middle East are undertaking massive tourism related investment programs,” The WTCC said.

The Asian region, powered by the two booming economies of China, India and other emerging markets still growing rapidly, are showing signs it is sufficiently immune to the effects of the turbulence being seen in stock markets worldwide, the WTTC report claimed.

The WTTC added that even in countries where economic growth slows, there is likely to be a demand and switch from international to greater interest in domestic, regional tourism.

Meanwhile, president and CEO of airlines booking engine Abacus International, Don Birch, pointed out that Vietnam's travel and tourism sector is expected to grow annually by 7.8 percent between 2008 and 2017. In 2006, Vietnam reported an 8 percent economic growth.

Vietnam Airline's fleet expansion plan to 60 planes by 2010 on the back of passenger traffic growth by more than 13 percent during 2006 reflects a robust demand for air travel.

Sydney-based Center for Pacific Aviation (CAPA) has warned, however, that rising fuel prices along with shockwaves from the meltdown of banking giants and collapse of US sub-prime mortgage market will spill over to the Asian Pacific tourism market. "My view is that there is going to be a downturn, perhaps steep," CAPA chief Peter Harbison told delegates at the recent Web in Travel conference in Singapore.

According to Lim Neo Chin, deputy chairman and chief executive of Singapore Tourism Board, the Singapore Flyer is expected to draw 2.5 million tourists annually. On September 28, Singapore will host the first night F1 race, in addition to the inaugural Singapore Water Week in June, and travel show ITB Asia in October.

The International Air Transport Association (IATA) has revised its earlier forecast, first made in June 2007, the second time in six months with a new forecast of US$5 billion profit for 2008, down from its first forecast of $9.6 billion. "Fuel hikes and the broadening impact of the credit crunch will limit traffic and revenue growth and minimize profits,” IATA CEO Giovanni Bisignani said.

Together with its strategic partner Accenture, WTTC has projected that an annual growth of only 3 percent in 2008, down from 3.9 percent in 2007 for the travel and tourism industry globally.

World economic slowdown will have ‘moderate impact’ on Asia Pacific tourism, WTTC says

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