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Thu, May 01, 2003 - Page 12 News List

Hong Kong, Singapore's conference market dying

AVOID PUBLIC GATHERINGS Both cities have spent over a decade trying to cobble together an industry for conventions. SARS may have landed it a death blow


A student stands in front of a poster which reads `Love Hong Kong Wholeheartedly' during a campaign against SARS at the University of Hong Kong yesterday. Hong Kong residents have recently demonstrated solidarity in the face of the outbreak, which has killed 157 people in the territory and has infected a total of 1,589.


The deadly severe acute respiratory syndrome (SARS) virus is threatening Hong Kong and Singapore's US$13 billion conference industry, halting conventions ranging from microchip equipment and precision machinery shows to Asia's biggest food-fest.

For the two cities, first and third in deaths from SARS, the losses will slow growth in economies struggling to recover from recession, hitting a niche business both have spent more than a decade building. Convention-related business accounts for 5 percent of the economies of Hong Kong and Singapore, analysts estimate.

"We're not just talking about conventions -- these are people who spend a lot more than your average tourist," said Nizam Idris, deputy head of research for Asia outside Japan at IDEAglobal Ltd in Singapore. "They stay in premium hotels and they spend a lot more on restaurants and entertaining clients." That business, already slowed by the Sept. 11 terrorist attacks and crippled by a bomb attack in Bali that killed about 200 people, has collapsed as business travelers dodge the virus that's killed more than 300 worldwide.

Singapore said yesterday visitors to the island fell 71 percent in the third week of April. Hong Kong said tourist arrivals probably slumped 70 percent this month.

Though the World Health Organization (WHO) said this week Vietnam has contained the disease and cases in Singapore and Hong Kong are decreasing, analysts said the region won't attract many business travelers for at least six months. Asia accounts for at least 90 percent of the more than 5,000 confirmed SARS infections worldwide.

"People are risk-adverse to travel," said Song Seng Wun, regional economist at G.K. Goh Research Pte in Singapore. "People are grounded and the whole convention business is coming to a standstill."

Luxury hotel occupancy in Hong Kong has plunged to as low as 5 percent. In Singapore, the government said about one hotel room in five is filled. Analysts estimate occupancy rates may have fallen to as low as 8 percent.

Singapore cut its economic growth forecast to between 0.5 percent and 2.5 percent, from an earlier estimate for the US$88 billion economy to expand between 2 percent and 5 percent. Hong Kong also said it will cut its previous 3 percent growth forecast for its US$163 billion economy.

The Singapore government spent S$220 million building the Singapore Expo. Opened four years ago, the convention center said it's the largest in Asia outside Japan. Hong Kong's government in December agreed to provide HK$2 billion (US$256 million) to help finance the construction of a 100,000 m2 International Exhibition Center at the airport.

Now, the Grand Hyatt Hotel -- adjacent to the Hong Kong Convention & Exhibition Center, built for the city's 1997 return to Chinese rule -- has closed three restaurants and some floors.

In Singapore, organizers of the annual Semiconductor Equipment and Materials International, which draws about 10,000 visitors, put the trade show on hold. Likewise, the 14th International Exhibition on Precision Engineering, Machine Tools and Metalworking Technology at the Singapore Expo, was pushed to September from May.

"Some keynote speakers from the US pulled out," said Karen Koh, a spokesman for the trade group representing semiconductor equipment makers.

Singapore Exhibition Services Pte, which is organizing CommunicAsia 2003 in June, said it polled exhibitors last week on whether they preferred the convention postponed. A decision would be made by the end of the week for the show, which it said is Singapore's biggest for technology, drawing more than 50,000.

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