The region is split between the haves and the have-nots. On the one hand, cities like Hong Kong and Singapore are creaming it. On the other, tsunami-affected destinations are dreaming of the day when tourism will be back in full swing. The question is, what will bring the travellers back to the affected places? Is it price? Can price overcome guilt and consumer resistance, Yeoh Siew Hoon wonders.

Lately, I have found myself living between two zones.

First. there's the no-tsunami zone where business couldn't be better – cities like Hong Kong, Beijing, Shanghai, Singapore and Bangkok are doing better than they've ever done.

When I was in Hong Kong two weeks ago, the place was buzzing, never mind the grey pallor that constantly hangs above the city these days. One hotelier joked, "There is no low season anymore, just full and very full."

By the same token, room rates in Hong Kong are either high or very high.

Then, there's the tsunami zone where business is really quite bleak – Phuket, Sri Lanka, Maldives and parts of Malaysia, notably Penang and Langkawi.

When I was back in Penang for the Chinese New Year, I learnt that one hotel alone lost 4,000 to 5,000 room nights in cancellations in January. And at a time when hotels are usually running full during the festive season, the top hotel on the beach was doing 70 percent on an average rate of under RM300 (less than US$100).

CNN, right after the tsunami, had lumped Penang in with other worse-affected places such as Khao Lak, Phuket and Sri Lanka and was showing footage of devastated beaches while mentioning Penang in the same reports.

Truth is, the coastline of Penang was largely unscathed. The only sign of the aftermath right now is the temporary housing across from Miami Bay which bore the brunt of the waves.

A Baywatch team posted on the Batu Ferringhi beach sounded an early alert and there were no casualties on this popular stretch of beach, something that should be considered by all beach destinations.

Like other destinations suffering from a slowdown in tourism post-tsunami, Penang is keen to get on with business and convince visitors to return.

In Langkawi, during the recent ASEAN Tourism Forum, close to 50 top tour operators and suppliers turned up for a lunch event organized by SHY Ventures, and sponsored by the Thailand Tourism Council.

The "Lunch With A Purpose" was aimed at brainstorming for solutions to tackle the challenges and issues in identified markets.

From the discussion, it was clear there was one overpowering issue that had to be tackled – that of perceptions formed due to poor knowledge of geography, mis-information and conflicting reports and messages.

Perceptions that all of Phuket was damaged, that all of Sri Lanka was affected, that major portions of Penang and Langkawi were hit and that there were risk of diseases associated with travelling to these areas …

There was also the guilt factor of course. How can I take a holiday in a place where there's been so much suffering?

During the lunch, there was also much discussion over whether there should be price cuts by the affected destinations.

A handful of tour operators (from Holland, in particular) said price incentives would help Dutch travellers overcome their resistance – and guilt presumably.

If Singapore is anything to go by, price can help overcome guilt. A Tiger Airways special saw thousands of customers snap up tickets within hours of its launch.

A Swiss operator however cautioned against extensive price cuts, saying the Swiss would not be lured by price. In that respect, the Swiss are not like Singaporeans even though both countries are pretty similar in other respects.

Oliver Bonke, vice president-marketing of Starwood Hotels & Resorts, was adamant against extensive price cuts. Any price incentives, he said, should be fenced in. Bali, he said, had still not recovered from the price cuts it gave post-the October 12 bombing.

Which is why I read with amusement a report saying a group of British travel agents were seeking cuts of up to an additional 30 percent for hotels in Phuket because they were displeased with the half price rates already offered.

The Association of British Travel Agents told the Nation newspaper that hotels and resorts in the Phuket area should come up with aggressive promotional offers to get their guest numbers back to pre-tsunami levels. Another travel agent warned that if hotels can't cut the rates a bit more, they might have to offer destinations such as China instead.

I don't know about you but I'd like to see this agent offer his customers destinations in China as an alternative to Phuket.
Customer: "I'd like to go to Phuket."

Agent: "Phuket is too expensive. How about China? We can offer Sanya. It has everything Phuket has."

I am not sure what the rates in Sanya are but I don't think you can get a decent room there for under US$15 which is what Phuket hotels would have to quote if they heeded ABTA's request.

Me, I say, be careful how you cut those rates.

Because as anyone will tell you, it is harder to raise ‘em once you've lowered ‘em.



The SHY Report
A regular column on news, trends and issues in the hospitality industry by one of Asia's most respected travel editors and commentators, Yeoh Siew Hoon.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her company's mission is "Content, Communication, Connection". She is a writer, speaker, facilitator, trainer and events producer. She is also an author, having published "Around Asia In 1 Hr: Tales of Condoms, Chillies & Curries". Her motto is ‘free to do, and be'.
Contacts: Tel: 65-63424934, Mobile: 65-96801460

Five Reasons Why You Should Sponsor The SHY Report ~ Click HERE.