Asia tourism reels as firms cut back business travel

Tue Apr 21, 2009 9:52pm EDT
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By Susan Fenton

HONG KONG (Reuters) - At a plush Hong Kong airport hotel, the only sign of activity comes from the dining-room where a queue of locals fill up their plates at a dinner buffet offered at a promotional rate to Hong Kong residents.

Before the slowdown, the hotel lobby would have been filled with business travelers working on laptops or having a drink at the bar. These days, the empty lobby bears testament to the effects of the global slump on Hong Kong's $20.4 billion tourism sector.

To get through the slump, the airport hotel has had to resort to promotional buffets and cheap spa packages for locals.

As dwindling earnings prompt companies globally to slash travel budgets, Asia has been hard hit with hotel room rates falling for the first time in five years and airlines suffering.

"Companies are now looking at what business travel is revenue generating and are cutting non-revenue producing travel," said Susan Gurley, executive director of the U.S.-based Association of Corporate Travel Executives.

It's not just hotels that are feeling the pinch, long-haul business travel has declined along with business activity.

Asia-Pacific carriers are among the worst affected airlines from the global economic turmoil, according to the International Air Transport Association. They stand to lose US$1.7 billion this year, it said.

Singapore Airlines has cut some of its business-class only flights to the United States, and demand for Japan Airlines' premium cabins has fallen by 20 percent on long-haul routes.   Continued...

<p>A traveller walks past a photograph of a Cathay Pacific 747 passenger jet, at the Hong Kong International Airport, April 16, 2009. REUTERS/Bobby Yip</p>