Asean’s Growth Driver
Yet, while there is great uncertainty about the present situation there is a lot of contradictory information – either exaggerated or alarmist. The crisis is certainly real. The fact is tourism proved incredibly resilient in the past, and if the downturn is expected to be dramatic, the recovery could prove to be even more so.
Globally, tourist arrivals grew two percent last year to more than 900 million although the growth was negative in the second half. Asia and the Pacific remained the world’s second best performing region in terms of arrivals in after the Middle East although there were signs of slowdown in the last quarter.
Southeast Asia, the decline in arrivals began to hit destinations from Manila to Singapore late last year. Visitors to the region totaled 58 million, down from 62 million a year earlier.
Yet, there are chances of an early recovery provided that economies, boosted by stimulus packages, return to growth. The danger, however, is the over reaction to the global crunch by both individuals and businesses whose belt-tightening unnecessarily hurt the economies and the travel industry as well.
Prospects for Southeast Asia could be brighter than one could possibly see. Prompted by the global crisis impact, the ten-nation Association of Southeast Asian Nations (Asean) is launching a slew of tourism promotional campaigns while individual members have their own plans to boost arrival numbers. Thanks to plummeting exports, the drive to boost tourism revenue tops the agenda of every Asean government. Visa-free access and one-priced tourism campaigns are among the group’s aggressive moves to attract tourist dollars.
The drop in oil price, delayed by hedging, finally came. The revival of tourism industry, particularly in Asean, should come faster for it is now the main driver of growth.
Opportunity Amidst the Crisis
In Thailand, US hotel-management firm Marriott International has signed management contracts with 10 properties in Thailand scheduled to open between this year and 2011.
The group will manage 10 new hotels with 1,751 rooms located in major tourist destinations. The first two properties - Marriott Executive Apartments with 300 units and Sathorn Vista Marriott Executive Apartments with 187 - will open in Bangkok this year.
The group is also set to manage another Renaissance in Bangkok's Sukhumvit Road area and a Marriott Executive Serviced Apartments in the capital in 2011 for a combined 350 units. Besides, the group is also looking to manage hotels in Chiang Mai, Chiang Rai, Cha-am and Hua Hin.
In Vietnam, Moevenpick Hotels and Resorts is making its mark with the upgrade of its properties in Ha Noi and Ho Chi Minh City. The Moevenpick Hotel Saigon, located close to the Ho Chi Minh International Airport and the city’s new E-Town business cluster, will begin a major refurbishment of rooms and public areas next month. In Ha Noi, the Swiss hotel management group has almost completed a $9 million renovation after closing the hotel for five months.
In the coastal city of Nha Trang, central Khanh Hoa province, Sheraton Hotels Group is building an international hotel & spa which will be put into operation in mid-2009. This is Sheraton's third luxury hotel in Vietnam, after two facilities in Hanoi and Ho Chi Minh City.
In the city-state of Singapore, the $5.4 billion Marina Bay Sands is on target to open by year-end. The construction of its hotel towers has passed the halfway mark and is due to be “topped out” in July.
With the current downturn and parent company Las Vegas Sands running into money problems, there were concerns about the impact on the Marina Bay project. But the company said funding is not an issue.
Marina Bay Sands said at least half of the property will be operational by year-end. It is in discussions with Singapore authorities on the timeline.
The distinctive hotel towers - that slope at a 26-degree angle - with 2,600 rooms have reached the halfway mark at about 28 floors, with hotel rooms being fitted out in tandem.
The hotel towers may have reached their halfway mark, but Marina Bay Sands has yet to face its biggest construction challenge - that is, when the floors go up all the way to the 55th level and they have to construct a sky park across all three levels.
When completed, the sky park, which is about the length of four and a half A380 airplanes, will have pools, gardens and a rooftop club. But will all these facilities bring in the crowds that the Singapore government is banking on?
The company plans to make Marina Bay Sands a global attraction, but the markets it is targeting first are China, India, Indonesia, Malaysia and Thailand, as well as the Middle East and Russia.
Those are the developers that defy the downturn but believe in the bounce-back of tourism.
Winners: Value-for-Money Destinations
Though certainly not immune to economic woes, tourism has so far resisted the economic downturn better than other industry sectors, such as car manufacturing or construction.