Rush Is On to Asia and the Pacific

After months of trying to decide where he wanted to go on his vacation, a friend finally settled on a trip to Asia. He would fly to Bangkok and Hong Kong for two weeks.

But when he called his travel agent he got a surprise. The flights he wanted were all sold out, as were the flights the day before and the day after.

So he went three days later and had a great time, and he’s already planning a return trip next year.

My friend’s experience was not an isolated one.

Asia is booming.

According to a forecast by the Federal Aviation Administration, the biggest growth will be international travel. And the biggest growth in foreign travel will be in Asia and the Pacific region, increasing 8.4% a year to 21.6 million passengers by the year 2000.

You don’t need the FAA forecast to see the growth trends. Just try to get a seat on a plane heading to Asia.

In 1986 United Airlines recorded a $61-million loss for its Pacific operations, but last year boasted a $200-million profit. As of June 1 the airline will offer a staggering 220 transpacific departures a week.

American Airlines recently filed with the Department of Transportation for the rights to fly nonstop service between San Jose and Tokyo. And the airline ordered long-range MD-11 aircraft to handle its expected new long-haul Asian and Pacific routes.

Expansion Into Asia

There are good reasons why United, American and Continental slugged it out recently for the rights to fly from Seattle to Tokyo. The route, which Continental won, is looked upon as another opportunity to expand into Asia.

Within the next few months Northwest Airlines, which already operates nonstop flights from Asia to seven U.S. cities, will begin service from Tokyo to Minneapolis, from Osaka to Los Angeles and from Tokyo to Saipan. Tourism to Korea is up more than 20% from last year. And travel to the Philippines is staging a comeback.

Nowhere is this surge more evident than in Hong Kong. One longtime Hong Kong resident likes to joke that when the Chinese take over from the British in 1997, they will find themselves in the hotel business.

Bill Marriott, president and chairman of the board of Marriott Corp., laughs when he thinks about the Hong Kong market, where he just opened his newest hotel.

“Know how much time and money I spent researching the potential there?” he asks. “About five minutes and $5. That’s how rich this market is. And you can only say that about very few markets.”

Indeed, Hong Kong is bustling, almost beyond anyone’s projections. Despite the fact that nine hotels opened in Hong Kong last year, hotels achieved an average occupancy of 92%, a figure unheard of in most other places in the world.

“The growth curves in Asia are astounding,” said Bob Burns, chief of Regent hotels. “A few years ago we could tell the low and high seasons of travel. They don’t really exist anymore.”

How did this happen? You can thank the bizarre combination of the weak U.S. dollar and Middle East terrorism.

“In 1985 and 1986, when Americans were afraid to go to Europe,” says one hotelier, “they discovered us by default. And they were spoiled by the standards of Asian service.

“They went back to America and told their friends. Asia has always had a sense of mystery. But now we were suddenly accessible to a large portion of the American market. They returned, and are still returning.”

In the next three or four years 35 more hotels will be opened in Hong Kong, adding 15,000 rooms. “And those rooms will be filled,” Marriott says.

“But there are problems,” said Rudolf Greiner, general manager of the Regent Hotel in Hong Kong.

Vacancy for Workers

Hong Kong does not have enough qualified people to fill the new jobs that will be created when those hotels open. At hotels such as the Regent, management has embarked on an aggressive training program to try to keep up. The hotel sponsors a host of service courses for prospective employees as well as intensive English-language instruction.

Bangkok has a similar problem. “We are thought of as a great hotel,” said Kurt Wachveitl, general manager of the legendary Oriental Hotel. “And our service standards are certainly at the top. But no hotel can rely on its reputation to provide its future.”

In addition to continued staff training, the Oriental just completed a major renovation.

Two years ago average room occupancies in Bangkok hovered around 35% to 40%. Last year more than 3.5 million foreign tourists spent almost $2 billion in Thailand. Now, getting a room in Bangkok at most hotels is often a problem.

And hotel construction is also booming in Thailand. Sheraton is considering six projects there over the next five years. Training schools are also being designed to handle the need for more staff.

Asia also may soon become a major cruise hub. Slowly but surely, more cruise ships are calling at Asian ports. The difference is that many are stopping there more than one time a year. And the Port of Singapore Authority has announced plans to build a $20-million passenger terminal for the ships.

Already one ship, the Ocean Pearl (formerly the Pearl of Scandinavia), is permanently based in Asia, cruising China in the summer and Bangkok, Bali and other ports in the winter months. But other cruise lines, from Royal Viking to Cunard, make Asia a frequent destination now.

Deals Available

As the word of mouth about Asia makes its rounds, the only thing limiting further travel expansion are the capacities of Asian airports.

Tokyo’s Narita Airport is at capacity. Singapore projects an 11% increase in air traffic this year, and 20% in 1990. At Hong Kong’s Kai Tak Airport the combination of planes and people has reached the saturation point. In the arrival hall the number of immigration counters has zoomed from 40 to 96, four baggage belts have been added and airline check-in desks have jumped from 116 to 176.

The new airport facilities in Bangkok are fast becoming outdated as thousands of American tourists flock in.

Does all this mean you can’t get there from here?

Hardly. Cheap airplane tickets are still available. You can still buy a ticket to China from New York City for $900. Similar deals can be had between other U.S. gateway cities and Korea, the Philippines, Bangkok and Hong Kong.

Although room rates are increasing throughout Asia, Thailand remains a bargain by U.S. standards, as does the Philippines, Singapore and, to a lesser extent, Hong Kong.

And reasonable cruise air/sea packages are available. But as is almost always the case in the fluid travel business, that may not be the case for long.