The new normality: Travel in an unpredictable world

It could be said that the Boxing Day Tsunami of 2004 kicked off “the year of living dangerously” (as described by the Straits Times in a special report on 15 October 2005). That was followed by, amongst other events, a massive earthquake in Sumatra, Indonesia, the Haitang typhoon in Southeast China and Taiwan, Hurricanes in America, bomb attacks in London, Bali and Amman, the devastating Pakistan earthquake and more recently, the threat of avian flu.

However, while international travel should have been badly affected by these threats, latest figures from the World Tourism Organisation (UNUNWTO) show a 5.9% growth in international tourist arrivals for the first seven months of the year as compared with the corresponding period in 2004. In fact, the UNWTO expects the year to end with an increase of 5 to 6%, saying that this is “exceptional” given that peaceful 2004 was a record year for the industry, and that the estimate exceeds the forecast long-term average growth of 4%.

Is this then the new normality that travellers have to deal with in today’s travel environment? Abacus International CEO & President Don Birch certainly believes so, “The very nature of travel means that no country can be absolutely safe from threats, be they security, health or natural. What we can do, however, is to ensure that travellers have the most up-to-date information so that they can make informed choices and be best prepared for any eventuality.”

Impact – destination, people, economy

It would be glib to suggest, however, that tourist destinations are unaffected by these threats. A VISA-UNWTO survey, Post-Tsunami Global Travel Intentions Research, conducted in the aftermath of the Tsunami disaster found that “as a direct result of the Tsunami, there is a risk that 9% of international travellers planning a holiday in 2005 have switched their travel plans to other regions in 2005.”

Indeed, booking figures on the Abacus system showed that in the week following the Tsunami (27 Dec 2004 to 2 Jan 2005), net bookings to Thailand and Sri Lanka were down 57.9% and 73.9% respectively compared with the previous week. However, net arrivals into China, Hong Kong, South Korea, Philippines, Singapore, Pakistan, Australia, New Zealand, Laos, Vietnam, Cambodia and Pakistan increased during this time, indicating that many travellers who cancelled bookings to affected areas had switched to other destinations within Asia Pacific.

And the drop in visitor numbers to the affected countries has had a tremendous impact on destinations heavily dependent on tourism such as Phuket and Bali. Apart from the related decline in hotel occupancy rates and its impact on operators and employees, roadside vendors, food and beverage outlets, and freelance tour guides find it hard-pressed to make ends meet surviving on the local population, who themselves are struggling to rebuild their lives.

Frequently, the cost of rehabilitation and recovery is a major obstacle to helping a destination get back on its feet quickly. At the request of the Indian Government, the Asian Development Bank, the United Nations and the World Bank assembled a joint team earlier this year to assess the socioeconomic and environment impact of the Tsunami on the country. The team estimated overall damages at US$574.5 million and losses at US$448.3 million, with overall rehabilitation and reconstruction needs estimated at US$1.2 billion. That’s a substantial figure by any measure, more so when you consider that India’s per capita income is only US$3,100 (source: CIA The World Factbook 2004).

In the case of the Severe Acute Respiratory Syndrome (SARS), there were additional costs associated with the implementation of new health measures such as patient screening and quarantines, and healthcare costs such as hospitalisation and treatment expenses, lost work-days of sick employees, and even the premature deaths of income-earners, all of which are potential costs in an avian flu pandemic situation.

In an attempt to measure the potential healthcare costs of SARS, the Far Eastern Economic Review (FEER) in May 2003 looked at what seasonal outbreaks of influenza cost economies in the region each year. According to FEER, the annual cost of influenza to the Thai economy was about US$450 million in direct medical costs and an additional US$1.6 billion in lost productivity due to time off work, while in Singapore, lost work-days from influenza cost the economy more than US$300 million annually.

There is also the wider cost to the economy to consider. As tourism is one of the biggest sectors in the world economy (according to the UNWTO, international tourism was worth US$622 billion in 2004), a devastating disaster or epidemic can seriously affect a country’s GDP growth. 

Following the recent bomb attacks on Bali, Indonesia’s Coordinating Minister for the Economy Aburizal Bakrie noted that if tourist takings drop by half, the country’s national growth will slow down by as much as 0.6%.

When the threat is borderless, as was the case with SARS, the economic impact is even greater since it affects several countries. According to the Asian Development Bank, SARS cost the East Asian region some US$18 billion in economic losses. Said the Bank in its Policy Brief on SARS: Economic Impacts and Implications in May 2003, “Tourism, transportation (particularly airlines), and retailing have been the hardest hit sectors as consumers shun shops, restaurants and entertainment venues; and travellers cancel trips. As visitor arrivals have dropped, hotel occupancy rates have fallen significantly in Hong Kong, China and in Singapore. The reduction of hotel rates has not been able to lure travellers back. Airlines such as Cathay Pacific have cancelled a large number of flights.”

An informed choice

It is worth noting, however, that international travel has by and large proven remarkably resilient to such events. Said the UNWTO in October, “Even though some countries are still recovering from the effects of the devastating Indian Ocean seaquake and Tsunami, this has not noticeably influenced world, or regional, tourism trends. The same is true with regard to the recent bomb attacks in London, Turkey and Egypt, which have been compounded by airline accidents and natural disasters, including floods, droughts, hurricanes and earthquakes.”

While acknowledging that external threats may lead to temporary shifts in travel flows, the UNWTO notes that at the global level, the impact of such shocks has been negligible, and on the local level, surprisingly short-lived.

Indeed, recently released figures from the UNWTO show that the Asia Pacific region is one of the best-performing regions of the world so far this year, registering a 9% increase in travel growth compared with the same period last year.

Mr Birch, commented, “Travel is essential for most businesses and is an increasingly important leisure item for many of us, so it is unlikely that international travel will grind to a halt in the face of these threats. Especially in the case of natural disasters, travellers recognise that these are freak events that could not have been prevented, and will normally return to the destination after some time.”

This is true for health threats as well. A recent survey Asia Pacific Travel & Tourism: The Industry Speaks conducted by the Pacific Asia Travel Association (PATA) noted that “there was a general acknowledgement that health risks were historical and part of life, and that new threats would always emerge. However, life would go back to normal thereafter.”

But travellers won’t return unless they know that it is safe to do so. The VISA-UNWTO survey observed that “most of the barriers to travel seem to be based on inadequate perceptions about the infrastructural readiness and safety of the destinations,” suggesting that tourist destinations were not getting their messages across.

It is important, therefore, for governments, the health sector and the travel industry to work together to coordinate their responses and manage the flow of information to the media and travellers, to restore traveller confidence in these destinations.

And given that the Internet is the main channel for travel information gathering (source: VISA-UNWTO survey) along with the media, it is critical that government agencies and the travel industry keep the information flow constant and current.

Abacus, for example, loaded essential information onto more than 30,000 Abacus-connected travel agents’ reservations terminals and the TravelSmart-Asia website in the aftermath of the Tsunami disaster to provide travellers with updated travel information, including information on the recovery efforts and process.

Mr Birch said, “It is absolutely critical that accurate and timely information be available to travellers to enable them to make informed decisions about their travel plans. Australia, for example, has revamped its travel advisory system to include a more comprehensive risk assessment system to assist Australians in understanding the risk levels of different countries while other travel web sites, including Abacus’ TravelSmart-Asia also provide updated travel information and tips.

“Further, we would advise travellers to register with their country’s foreign consulates when overseas so that their whereabouts can be traced in an emergency, and to take out travel insurance to cover overseas medical costs.”

Avian Flu – cause for alarm?

The recent outbreak of avian flu in Europe is causing much concern amongst global health officials. While the H5N1 virus doesn’t “spread efficiently and sustainably among humans”, says the World Health Organisation (WHO), the fear is that as the virus travels across countries, it will have more opportunity to evolve, increasing the risk that it will mutate or mix with human strains and become easily transmissible.

As with SARS and other threats, travellers’ level of fear tends to increase “if people don’t know enough about [the disease], how and how fast it would spread, how many people have been affected, and in which countries, whether it is curable, and what governments are doing to alleviate it.” [source: PATA survey Asia Pacific Travel & Tourism: The Industry Speaks]

The Asian Development Bank is urging governments therefore to “act transparently and disseminate accurate and timely information” on avian flu outbreaks and share information with other international agencies to reduce the uncertainty and fear amongst the general public. Pointing to the region’s experience with SARS, the Bank cautions that an avian flu pandemic would likely force the world into a recession with economic loss estimated at US$282.7 billion, reducing Asia’s growth rate to 0.1% and contracting global trade of goods and services by 14%, the equivalent of US$2.5 trillion [source: Policy Brief No. 42 – Potential Economic Impact of an Avian Flu Pandemic on Asia], which is why governments and international organisations need to work together quickly to deal with the avian flu threat.

On its part, the tourism industry is taking steps to combat the situation with the UNWTO meeting the WHO to discuss ways to help the industry be better informed and prepared, and recommending that governments follow the UNWTO’s crisis management guidelines.

Airlines are also taking preventive measures. In its special report on Bird Flu (29 October 2005), the Straits Times reported that Thai Airways has installed special filters in its cabins and British Airways is stocking protective gear on board. Singapore Airlines told the paper that its cabin air filtration systems are equipped with highly efficient filters which trap dust and bacteria and prevent them from circulating back into the cabin, similar to those used in hospitals’ intensive care units.

The WHO also advises that travellers to affected areas avoid contact with live animal markets, poultry farms and any free-ranging or caged poultry, and ensure that poultry and egg products are properly cooked before consumption.

Additionally, many countries put out travel advisories through their tourism or health agencies to provide travellers with current information on the situation and the steps that they can take to keep themselves safe.

Ultimately though, bird flu is a threat like any other danger that people face in their daily lives, so it’s important not to get overly anxious.

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