Currency and inflation join oil as key concerns for Asia Pacific travel and tourism, says PATA – 04/07/08

ASIA PACIFIC. The rising price of fuel is not the only serious concern for the Asia Pacific travel and tourism business, according to an analysis by the Pacific Asia Travel Association (PATA). The depreciation of the US Dollar, combined with inflation and rising local costs, also poses major financial challenges to the industry, PATA’s Strategic Intelligence Centre has said.

“Since 2005, the US dollar has depreciated by between -14% and -21% against six major Asia Pacific currencies, making some parts of Asia an increasingly expensive choice for US travellers,” said PATA. “This in part at least is fuelling a shift in destination choice even within the region.

“At the same time inflationary pressures across the region have been pushing local costs skywards. For example, since 2006 average daily rates at 5-star hotels in six major Asia Pacific cities have jumped by between +10% and +39%, measured in local currencies.”

Allied to fast-rising fuel surcharges and airline costs, these factors could slow growth in the region’s tourism market. “According to media reports,” PATA said, “one major airline in the region is likely to become the first carrier to charge more than US$1,000 for a fuel surcharge on its popular Sydney-London route from 1 July.”

“Operators which quote in US Dollars have been playing a desperate catch-up game, continually increasing rates as the Dollar has fallen,” said PATA Strategic Intelligence Director John Koldowski. “But at the same time they have been hit with the double whammy of increased local operating costs.”

Despite this, PATA’s recently released “˜Asia Pacific Tourism Forecasts’ report suggests core fundamentals remain generally positive, with growth in international arrivals into Asia Pacific forecast at +7% to +8% over the 2008-2010 period.

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