2008 has been a tale of two fortunes for the tourism and hospitality industries in Asia and although the subprime crisis began in 2007, the effect of the fallout was only felt in Asia in the second half of 2008.

According to the United Nations World Tourism Organisation, the Asia Pacific region's annual tourism performance growth declined the most in 2008 as compared to the other regions of the world like the Americas, the Middle East, Europe and Africa.

While arrivals in the Asia Pacific region grew 6% in the first half of 2008, the last six months of the year saw a 3% drop-off in arrivals to book an overall 2% growth in the full year 2008 as compared to approximately 10% in 2007. The year will also be remembered for the meltdown in the global financial markets, and commodities, oil price and exchange rate fluctuations.

The tourism industry has been growing in significance in many local economies and receiving greater attention from
authorities. Stimulus packages have been declared in contries such as China, Thailand, Singapore and Indonesia to support domestic and regional travel and shore up the tourism sector.

Looking ahead, we anticipate tourism demand to ease in the short-to-medium term; however, the long-term potential of the region remains buoyant.

On the investment and development front, hotel transactions are few and far between as compared to 2007, while
some development projects are being put on hold due to the credit crunch, which resulted in the difficulty in obtaining financing and refinancing. Despite this setback, notable transactions over the year include the approximate US$700 million acquisition of the Westin Tokyo by the property

investment arm of the Government of Singapore Investment Corporation and the acquisition of a 87% stake in the 435 room Four Seasons Shanghai by Shanghai Industrial Holdings from its parent company for a reported price of approximately US$173 million.

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