WTO Update shows high Overall Confidence in Post Tsunami Recovery

According to the latest World Tourism Organization (WTO) Market Intelligence report, revealed at the second Emergency Task Force meeting in the Berlin, the overall confidence in a rapid tourism recovery in the Indian Ocean region is rather high.

"Reconstruction and revival plans in the region are being implemented at a quick pace. Some travel trade representatives expressed the expectation that demand will be back to normal or even be better than is was before the tsunami, in the 2005/06 winter season," underlined the WTO Secretary-General Francesco Frangialli.

The report examines the evolution of tourism after the tsunami and the short and midterm prospects. It is based on air traffic and arrival data as well as data from a survey among the travel trade in major source markets. In this respect it is a complement to the consumer perception survey deriving from the demand side conducted under the responsibility of VISA International. The research focuses on the four most affected destination countries: Indonesia, Maldives, Sri Lanka and Thailand.

In the Maldives and in Sri Lanka around 80% of the existing capacity is operational. In Thailand close to full capacity is available. The affected areas represent around 9% of all inbound traffic. Within this area there has been a quick recovery of the infrastructure and 80% of the hotels are functioning normally. In Indonesia, though in humanitarian terms most hurt, there was no relevant impact in terms of tourism, as its main tourism destinations situated on the islands of Java, Bali and Lombok are thousand of kilometres away from the North-West coast of the island of Sumatra where the tsunami struck.

"WTO is confident that the Phuket Action Plan which focuses on tourism employment, small businesses and return of tourists, as adopted at a special session of the WTO Executive Council on 1 February, will contribute decisively to the rapid restoration of tourism business in the affected destinations," Mr. Frangialli stressed.

Air Traffic Flows

As already anticipated in the January issue of the WTO World Tourism Barometer, for world tourism as a whole the tsunami does not seem to have had a significant impact. As reported by IATA, worldwide air traffic (as measured in revenue passenger kilometre) maintained strength in December 2004 and January 2005 with growth close to 8% for both months compared to the same months a year before.

Notwithstanding, air traffic by airlines of Asia and the Pacific (referring both to traffic within, to and from the region) saw slower growth of 7% in December and 3% in January. IATA attributes this slowdown to the loss of leisure travel suffered by some Asian airlines from the tsunami, but believes the fall will be reversed in the following months given the strength of economic activity in the region.

Arrivals to Destinations

As could be expected just after the disaster, in January the loss of arrivals was generally substantial, while in December in some cases the figures were still positive as only the arrivals in the last week were affected just after the tsunami took place.

January 2005 data for Indonesia as a whole is not yet available. The number of direct foreign tourist arrivals to its prime destination Bali, however, decreased by 40% in January, while in December an increase of 33% was recorded. Arrivals to the Maldives decreased by 24% in December compared to the same month of 2003, and in January a decrease of 70% was recorded. Tourist arrivals to Sri Lanka increased by 15% in December, while in January a decrease of 24% was reported. Arrivals at Bangkok International airport (excluding overseas Thais) increased by 2% in December and decreased by 19% in January. In the first half of February, though, arrivals were up by 12% compared to the same period of 2004. 

Source markets

In order to get insight on the short- and medium-term prospects of the affected destinations, a brief survey has been conducted by the WTO Secretariat among travel trade representatives of a number of important source markets of the affected countries in Asia, Europe and the Americas.

Said Mr. Augusto Huéscar, WTO Chief of Market Intelligence, "Questions focussed first on the assessment of the pace at which tour operations have been restored in the main generating markets, and second on the evaluation of how consumers are reacting in terms of bookings, of possible changes of destinations and of overall perception regarding the affected destinations.

"Responses have been received from representatives in Australia, Canada, China, Finland, Germany, Japan, the Netherlands, the Republic of Korea, the United Kingdom and the United States."

Some of the most noteworthy conclusions from the responses are:

¨Unlike other emergencies such as SARS, the tsunami did not insert a generalised uncertainty in the markets undermining travel confidence. Travellers understand that the tsunami was a unique one-time event that could also have occurred in other places, for which nobody is to blame, and which is not likely to be repeated. Potential visitors do feel the need for information about the actual state of affairs, but are not scared away in large numbers," stated the Secretary-General.

 The tsunami did draw a lot of attention to the region and bred sympathy and solidarity all over the world, as is reflected for instance in the record amount of donations collected from both public and private sources.

As a side effect of the tsunami, the awareness of the destinations has increased. The media exposure has made the destinations more known now then before in source markets. 

Charter air traffic to the affected destinations is coming back. Tour operations from a number of long-haul source markets to the affected areas, which are based mainly on charter traffic, were mostly cancelled or were at reduced capacity throughout January. Gradually by the end of January and during February operations have been resumed but at lower than usual capacities for this part of the year. 

Bookings to the destinations hit by the tsunami are still under pressure, but are slowly picking up again. Though a temporary shift of traffic can be noted, this is mostly redirected from the most affected areas to nearby areas within the same countries or within the same region. Patterns differ from market to market. Long haul markets seem to be reacting more promptly than nearby markets and markets such as Japan where security issues are highly considered. In the UK recovery has been stronger in bookings to the Maldives and to Phuket while bookings to Sri Lanka show slower development.

In Germany bookings to Thailand are on the whole 20% down as compared to last year, with the Maldives down 30% and Sri Lanka down 60%. The booking statistics kept by the General Dutch Federation of Tourism companies (ANVR) show a clear pickup in bookings for Indonesia and Thailand made between 16 January and 6 of February 2005. For the coming summer season (April-November) for both destinations already more bookings have been made than in the same period last year. Reservations for Sri Lanka and the Maldives, however, are still very slow and figures still lag considerably behind last years' figures. In Asia, the Australian outbound market is reported to have already recovered fully and no lasting negative impact for the tsunami-affected destinations is present. 

For the affected countries, as with any calamity, it is of utmost importance that travel advisories issued by the authorities in the source markets adequately reflect the situation, i.e. that they be balanced, based on ground observation, and geographically confined. They play a vital role in travel decisions if only for the fact that insurers use them as guidance for whether or not to cover trips. Many generating countries acted with prudence in this respect. As situations are quickly changing and improve every day it is necessary to update travel advisories with sufficient frequency. For the restoration of normal tourism traffic to affected destinations this can be one of the essential factors.

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