'Not all gloom and doom'

5 October 2001

As the travel industry reels from cancellations, industry leaders are calling for cooler heads to prevail in what is possibly the most difficult global business climate to affect the Asian region.

Tinged with that call however are huge doses of reality.

Said Hans Lerch, chief executive officer of Kuoni Travel Group, Switzerland, "Things will calm down and get back to normal. 'Normal', however, might not be the levels we saw earlier and before we reach there, many a 'name' will have gone belly up. The rest of us will adjust their respective costs and keep on existing - not thriving, not in the short term, to be sure."

Lerch said, "I advise everybody to look at their cashflow and forget the P&L in these difficult times. It is a survival exercise for weak balance sheets, no doubt, and even strong ones better know what they are doing. Sitting back and hoping that everythingwill be as it was before could be suicidal but panicking is equally suicidal."

From the US, Bruce Tepper of Joselyn, Tepper & Associates, who is due to speak at the Travel Agents Exchange 2001 in Singapore this week, said, "Bad news always outsells good news but it's not all gloom and doom.

"A survey conducted during the week of September 17 by YPB found that 77 percent of American business travellers were not altering their travel plans. Granted, 23 percent is a big minority, however it is still a minority."

He offered a few predictions from the perspective of "someone who's a veteran observer of the travel and tourism industry."

1. Within the US, domestic tourism will take a sharp rise in the coming months and outbound international tourism will increase much more slowly. We're already seeing a shift to holidays and some business travel moving to trains and cars. AMTRAK, the national railway system reported a substantial increase in bookins in the past few weeks.

International travel will begin to come back but at a much slower pace. Some are afraid to fly at all and more are afraid they'll get stuck somewhere in the event of further military action.

2. The cycle of business growth will begin to accelerate by the end of October. Americans have a great capacity to move on following horrific events and every effort by government, business and the media will be focused on doing so. With the holidays approaching, people will begin making holiday plans.

There is also a great desire for escape right now. It's a bit numbing to see the news day after day. Video rental outlets reported a surge in bookings for comedies and musicals in the past two weeks.

3. Though much of the world is concerned about a retaliatory military attack with no particular target, that appears doubtful. I don't have any contacts in Washington or inside information, however if you listen the words of US Government officials today the focus is on:

o penetrating terrorism organisations and destroying them from within
o financial strangulation
o improved intelligence
o and a long protracted struggle with no big events, decisive victories or public celebrations."

Said Tepper, "I would suspect any military actions are likely to be very limited in scope and probably not well publicised...by design.

"If you look at American history, you'll find that events of this nature create a fierce determination to move forward and so quickly. If you depend on American visitors, the next few months will be very difficult. But be ready! Things may turn around more rapidly than you think."

In this Special Edition, TravelWeekly East brings you reports that share some ideas on how you can turn crisis to opportunity, show how the business community at large is assessing the impact and vowing to get on with business, how an entrepreneur sees opportunities amid the crisis and how an agency boss used to crisis advises, "Stay calm and positive."

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