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Fri, May 16, 2003 - Page 12 News List

UN says SARS will kill millions of jobs

ECONOMIC TOLL A recently released report estimates that over five million people will lose their jobs in the tourism and travel industries as people stay home scared

BLOOMBERG , UNITED NATIONS

Five million people will lose their jobs this year in the worldwide tourism industry because of the SARS epidemic and the economic slump, with Asia by far the hardest hit region, the UN said in a report.

"The capacity of the travel and tourism industry to create employment seems severely damaged by recent events," the UN's International Labor Organization said. "The estimate dampens optimism that began early in 2003 that the worst of the aftermath of the Sept. 11 terrorist attacks on the US might be over."

The travel and tourism industry, which employs about 80 million people, has lost 11.5 million jobs since late 2001, according to the UN.

Travel and tourism employment in China, Hong Kong, Singapore, Taiwan and Vietnam, the countries most affected by SARS, will decrease by as much as 30 percent, the report said.

Fifteen percent reductions are forecast for Australia, New Zealand, Indonesia, Malaysia, Fiji and Kiribati. The rest of the world will average 5 percent reductions, according to the UN.

SARS has killed at least 587 people worldwide and infected 7,628 people in 32 countries, according to the World Health Organization (WHO), a UN agency. China, Hong Kong and Taiwan are the three most infected countries.

Two positive developments came on Wednesday, when the Centers for Disease Control in Atlanta said events involving people traveling from areas affected by SARS should go on as scheduled.

The WHO also removed Toronto from a list of areas where the disease is spreading and canceled a recommendation that travelers be screened when leaving Canada.

The World Tourism Organization, another UN agency, said SARS has reduced tourism more than last year's terrorist attack on Bali or the war on Iraq. Instead of growing by up to 2 percent in 2003, as previously forecast, tourism income worldwide is expected to decrease by 7 percent, the UN said.

The UN cited reports of decreases in occupancy or cuts in service from seven Asian airlines. The list includes Cathay Pacific Airways Ltd, Air New Zealand Ltd, Singapore Airlines Ltd, Asiana Airlines, Garuda Indonesia, Bangkok Airways and Malaysia Airlines Capital.

Business travel in Asia, which represents a fifth of the US$250 billion global total, will decrease by 5 percent this year after experiencing double-digit growth in each of the past four years, the UN said.

The occupancy rate in the most fashionable Hong Kong hotels is down to 14 percent and the nation may lose 6 percent of GDP as long as the outbreak continues.

Four major hotels in Shanghai have closed for three months because of a lack of guests, according to the UN.

Francesco Frangialli, secretary-general of the UN tourism organization, said in a statement that a "wave of paranoia" is causing areas not seriously infected with SARS to suffer losses.

He cited India, Indonesia, Malaysia, Cambodia, the Philippines and Thailand.

He warned governments and the travel and tourism industry against overreacting to SARS, noting that only five cases of the disease are believed to have resulted from transmission in an airplane and that those occurred before security measures went into effect.

Singapore Airlines, Asia's most profitable carrier, announced its fifth round of flight cuts, taking its total capacity reduction to 31.5 percent of services, or 358 weekly flights between April and June. It previously said it would cut 298 flights, or 29 percent of total capacity.

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