A Turn for the Worse

SARS continues to take toll on Asia travel industry

By: Lisa Jennings and Robert Carlsen

This year is the 75th anniversary of The Peninsula Hong Kong, but promotions are on hold as hotel officials struggle with the effects of a disease that has devastated travel to the Asian hub city.

As of last week, there were no reports of Severe Acute Respiratory Syndrome, or SARS, among guests or staff members at the Peninsula, and the hotel is taking every precaution to keep it that way, said Peter Borer, the Peninsula’s group general manager for Asia. Surfaces in high-traffic areas are being disinfected every 15 minutes. Staff members are wearing gloves and masks. Some hotel restaurants are closed, in part because occupancy is down.

“Like the rest of Hong Kong, we have seen a very serious downturn,” said Borer.

That downturn has also reached U.S. travel agents specializing in Asia. They say business, which was down, dropped even more sharply this month after the U.S. State Department issued travel warnings for Hong Kong,China and Vietnam.

Also, the World Health Organization has recommended that non-essential travel to Hong Kong and the Guangdong province in China be delayed. And the Centers for Disease Control and Prevention has warned against travel to Hong Kong, mainland China, Singapore and Hanoi.

As of April 9, 2,722 cases of SARS were reported worldwide, with 106 deaths.

Industry observers have speculated that SARS is having a bigger impact on air travel than the war in Iraq. But Dave Dickson, Ernst & Young airline industry analyst, disagrees.

He noted that SARS took airlines by surprise, but that the outbreak is likely to last only a few weeks. In contrast, threats of war have increased fuel prices for months, putting a huge burden on the industry.

“But, if SARS goes on for another six months,” observed Dickson, “it could be devastating.”

Signs of SARS’ impact on travel continue to grow:

" Tour operator Globus has cancelled April tours to China and Hong Kong, and tours to Vietnam until further notice.

" Tauck World Discovery also cancelled April departures for two itineraries that visit China, Hong Kong and Vietnam.

" Victoria Cruises took five of its eight ships sailing the Yangtze River in China out of operation until mid-June.

" Continental Airlines suspended its five weekly flights from New York to Hong Kong. It plans to reinstate service June 2.

" Cathay Pacific canceled one of its two daily flights from Los Angeles to Hong Kong through the end of the month. Overall, Cathay has cut service by 23 percent since the beginning of the Iraq war and the SARS outbreak.

" Princess Cruises last week said passengers will not be allowed to board if they come from, travel through or visit the regions most affected by SARS (Guangdong province, Hong Kong, Singapore and Hanoi) within 10 days of their cruise departure. The advisory applies to all cruises through April 20.

" The 52nd Annual Conference of the Pacific Asia Travel Association is being held this week in Bali. About 950 delegates were expected, but last week anticipated attendance dropped to 709.

Many cancelled because their companies have banned travel to the region, PATA officials said.

Last week a Business Travel Coalition survey showed a jump in the number of corporations banning travel to Asia. Of 144 responding, 58 percent have banned travel, up from 24 percent the previous week.

For Ann Kendall, an agent with Pacific Travel International who handles corporate travel out of Silicon Valley, SARS has virtually wiped out her regular bookings to China, Hong Kong, Taiwan and Singapore.

In the past three weeks, 30 corporate travelers canceled trips to the region, she said. And those who are still traveling have refused to fly on certain regional airlines.

Leisure travel also is down. Frank Lee of Lotus Travel and Tours in San Francisco said his China business has “totally stopped.” While future bookings are holding, he said that his clients are concerned.

Cam Tsai, owner of 5 Oceans Travel in Westminster, Calif., estimated her business to Asia has dropped about 80 percent. The agency, which handles mostly leisure travel, also operates tours throughout Asia, many of which have been canceled for April.

Still, Tsai said she feels the U.S. media is overreacting to the scare, saying returning travelers are finding panic levels much higher in America than they were in Asia.

China Travel Service USA, a tour operator based in San Francisco that specializes in Yangtze River cruises, also is reporting some client cancellations though most were just avoiding Hong Kong. As of last week, the company had no plans to cancel any tours.

In fact, officials there were discussing rebooking incentives once the fear of SARS begins to wane, which many expect will be soon.

Like mad cow disease in England, this will pass, noted travel agent Rita Kreiser of The Travel Desk in San Jose, Calif.

Still, others say it will take time for consumers to regain confidence in the region.

Said Borer at the Peninsula Hong Kong: “Unless we have a clean bill of health from the WHO, it would be futile to make plans for advertising or promoting the hotel at this point.”

SARS on the Web

World Health Organization: www.who.int

Centers for Disease Control and Prevention: www.cdc.gov

Hong Kong Department of Health: www.info.gov.hk/dh

Hong Kong Tourism Board: DiscoverHongKong.com, or partnernet.hktb.com

Singapore Ministry of Health: app.moh.gov.sg

Taiwan Department of Health: www.doh.gov.tw

Thai Ministry of Public Health: eng.moph.go.th

Health Canada: www.hc-sc.gc.ca

The Business Travel Coalition surveys on SARS: