Financial Times

WTO says tsunami will not ruin world tourism
The World Tourism Organization (WTO) said last week that the Asian tsunami would not have a major impact on global tourism, affecting less than one percent of total world arrivals.

WTO said there are seven reasons for that and among them is the present expansion of tourism in the region and Asia's capacity in dealing with crises. "All in all, it can be assumed that the volume of tourism actually affected in the five countries in question will account for less that one per cent of total world arrivals. There are therefore solid grounds for hoping that a prompt recovery of those destinations will pave the way for cooperation and that tourism will help to mitigate the devastating effects on the local population," it said in a statement.

The statement said:
The number of victims claimed by this unprecedented natural disaster, among both the local populations and the visitors in their midst, has been described as the highest in history. An immediate reaction is to ask to what extent it has affected world tourism, a source of economic activity and cultural enrichment for the countries concerned, as indeed for most other countries of the world.

Taking world tourism as a whole, the answer has to be that the impact will be slight for the following reasons:

The market share of the destinations concerned
Although the five most severely affected destinations - India, Indonesia, Maldives, Thailand and Sri Lanka - are making tremendous strides in their tourism development and having considerable success as tourist destinations, they achieved a market share of only 3 per cent of total world tourist arrivals in 2004. In the other Asian countries hit by the tsunami, especially Malaysia, the affected areas are either not highly developed tourist destinations or are already recovering.

The present expansion of tourism in Asia and the Pacific
In 2004 this region of the world enjoyed the greatest expansion of both its economy and its tourism. South-East Asia's growth rate outstripped that of the region as a whole in a year marked by a vigorous recovery from the sharp downturn in growth caused by the SARS outbreak and the unstable climate of 2003.

Last year Asia made spectacular economic advances, as reflected in the results of many countries of the region and of the main generators of tourism in particular. The International Monetary Fund estimates that in 2004 GDP rose by 3.6 percent in Australia, by 4.4 per cent in Japan, by 6. 4 per cent in India, by 8.8 per cent in the Republic of Korea and by 9 percent in China.

This has boosted every kind of tourism, especially intra-regional tourism, which accounts for 79 per cent of the region's total arrivals, thanks in part to the increase in visitors from China to countries officially approved as tourist destinations. WTO is speaking here of a built-in feature of tourism in South and South-East Asia, which will not change in spite of the enormous disaster that has put it to the test.

Profile of the afflicted areas
Although WTO constantly refers to the countries affected, speaking strictly from the standpoint of tourism, the human catastrophe and the material losses caused by the tsunami have been confined to a few coastal resorts in each country, and the damage in some cases is limited. The country that suffered the severest damage is Indonesia, in the northern region of Sumatra, but tourist destinations like Bali, Java and Lombok were unaffected. In India it was the eastern coast that was the hardest hit, where tourism is not yet well developed, while tourist destinations like Goa continue to function normally.

In Thailand, although it is true that tourist areas like Phuket and its immediate hinterland and other resorts on the east coast of the country were struck by the tsunami, it has been possible to keep a considerable amount of the tourism plant in running order, or it is being restored. Places like Bangkok, Pataya and Chiangmai are fully operational. In Maldives, two-thirds of the eighty-five tourist resorts are operating or will be shortly. As to Sri Lanka, its east coast has little tourism activity, the resorts on the south coast have been damaged, but those on the west coast are unaffected, as are the important cultural resorts in the country's interior, such as Sigiryia and Kandy.

All in all, it can be assumed that the volume of tourism actually affected in the five countries in question will account for less that one per cent of total world arrivals. There are therefore solid grounds for hoping that a prompt recovery of those destinations will pave the way for cooperation and that tourism will help to mitigate the devastating effects on the local population.

Asia's capacity to recover from disasters of all kinds.
The economic and financial crisis that affected some Asian countries - Indonesia and Thailand in particular - was reflected in declines in tourism of 1 per cent in 1997 and 0.5 per cent in 1998 for Asia as a whole. Once the crisis had passed, international tourism in the continent, boosted by intraregional flows, grew by 11 per cent in 1999 (in contrast to the world average of 3.5 per cent) and by a further 12 per cent in 2000. The SARS outbreak dealt a severe blow to many destinations, and the region closed the year with a downturn of 8.8 per cent in international tourist arrivals compared to 2002.

The data for 2004 available so far, which take in the high season, that is to say up to the end of August 2004, show that in Asia as a whole tourism increased by 37 per cent, in South-East Asia by 45 per cent and in South Asia by 23 per cent. The world average for the same period was 12 percent.

The compensatory factor
The compensatory factor evident in the shift of tourist flows is twofold - geographical and seasonal. In the very short term some of the tourists who had intended to spend their holidays in destinations affected by the tsunami may put off their plans until those destinations are again in a position to provide the same facilities as before.

In such cases, the tourist does not usually forgo his holidays but switches to another destination of similar characteristics. Those who do not go now will be back some time later. This compensatory factor explains to a large extent why tourism has proved so resilient in the face of the trials it has undergone since 2001.

The trend towards market flexibility and volatility will give added momentum to this compensatory factor. The increasing flexibility of the market is due as much to the efforts of the enterprises responsible for distribution as to the ever-greater use of the new technologies which allow for considerable market transparency and generate enough information to enable the would-be traveller to choose alternative destinations.

Some of the people that are now unable to travel to the Indian Ocean will possibly opt for the Caribbean instead. The Asian destinations owe a large part of their success in 2004 to the very fact that many tourists resumed the travel plans they had abandoned in 2003 because of the perceived uncertainties of travelling to certain Asian countries at the time.

The safety factor
The perception the tourist has of the disaster is that it was a freak and distressing event wholly unprecedented in the Indian Ocean. Understandably, there is among the authorities and the tourism industry a concern to ensure that the destinations and tourism establishments are restored.

Tourism administrations and the private sector are working together on this task, applying the know-how gained in crisis management and devoting all available resources to it.

The internationalization of tourism
Part of the very essence of tourism, internationalization holds the key to recovery. On the one hand, there is a feeling of solidarity among the tourists that are most familiar with these countries and aware of the quality of the tourism products they offer. They know that their presence there once circumstances permit will be a way of expressing solidarity with the local victims as well as a good holiday choice. Moreover, much of the tourism industry operating in the area has strong ties with enterprises and operators in other countries and regions that are sharing their knowledge and skills and providing the necessary support to shorten the time it will take for tourism to be productive again. In other words, they intend to operate in the tourism market as soon as possible to ensure that tourists do not stay away from destinations affected by the tsunami, for this would deal a second blow to the local populations.

Similarly, governments will demonstrate international solidarity at the extraordinary session of the Executive Council of WTO, to be held at Phuket, Thailand on 1 February this year in order to assess the tourism sector's needs in the countries affected and take the appropriate measures. Other organizations, donors and tourism industry representatives will also be invited to the session.

Conclusion
We have witnessed a natural disaster producing the largest number of victims the world has seen for a very long time. World tourism, too, has endured its greatest catastrophe yet from the point of view of the number of tourists that lost their lives or suffered the consequences of a tidal wave of such ferocity, not to mention the damage to tourism facilities.

The disaster has brought tragedy to the local population and hit tourism hard. There is, however, a gulf between the perception people have of the event, owing to the considerable coverage given to it by the media, an example of the globalization phenomenon, and the expected consequences for the development of world tourism.

Although there is great hardship now because of the havoc wreaked on lives and property, tourism is expected to recover in the short term and be only slightly affected during 2005.

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