Currency, oil prices pose challenges for APAC travel and tourism

BANGKOK – Asia Pacific travel and tourism is facing serious financial challenges due to a combination of US currency depreciation, rising local costs and new fuel surcharges, according to an analysis by the Pacific Asia Travel Association (PATA).

PATA’s recently released Asia Pacific Tourism Forecasts, however, suggest core fundamentals remain generally positive, with growth in international arrivals into Asia Pacific forecast at seven to eight percent over the 2008-2010 period.

Since 2005, the US dollar has depreciated by between 14 and 21 per cent against six major Asia Pacific currencies, making some parts of Asia an increasingly expensive choice for US travellers. This in part 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. And as oil prices hit record levels, fuel surcharges have increased substantially.

Despite these issues, PATA’s latest forecasts predict generally positive growth for the region, with China and Korea set to generate strong outbound growth to Asia Pacific destinations.