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Disease may cost Malaysia's travel agencies billions

Malaysia's travel agents expect sales in the industry to decline by as much as 10 billion ringgit (US$2.6 billion) this year, even as new cases of the virus that's caused hotel rooms and malls to empty continue to fall in Asia.

"The worst may be over but we are not out of the hole yet," said Tunku Iskandar Tunku Abdullah, president of the 1,650-member Malaysian Association of Tour and Travel Agents, in an interview in Kuala Lumpur. Industry sales may not return to "anywhere close to pre-SARS levels" until the end of the year, or early next year, he said.

Iskandar's comments suggest that Malaysia's tourism industry, the second largest foreign exchange earner after merchandise exports, will suffer negative perceptions because of SARS for several months to come.

Even if SARS has peaked and terrorism alerts are targeted at threats elsewhere in Southeast Asia, tourists will be deterred from visiting Malaysia, the association said. Business from China, Hong Kong and Taiwan, which together provide the third most visitors to Malaysia after Singapore and Thailand, has "almost dropped to zero," Iskandar said.

Tourist arrivals this year will be 25 percent to 30 percent lower than last year's 13.3 million visitors, translating into a loss of between 9 billion ringgit and 10 billion ringgit in sales, Iskandar said. Tourists spent an estimated 37 billion ringgit in Malaysia last year, he said.

"Anything that impacts our neighbors will have a direct impact on us," said Iskandar, referring to Australia's recent alert to its citizens that Australians in Thailand are under threat.

Tourists arriving in Malaysia fell by as much as 65 percent in the January to mid-May period from a year ago, while outbound travel has slumped some 45 percent to 55 percent, the travel association said.

Tourist arrivals in Malaysia plunged as much as 50 percent in April from a year ago and the government expects similar declines for this month and last, Tourism Minister Kadir Sheikh Fadzir said last month.

Besides the China-Taiwan-Hong Kong market, SARS is also deterring visitors from the Middle East.
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