Asia’s Economic Crisis Is a Boon for U.S. Travelers

When Ritz-Carlton is renting rooms for less than $90 nightly, you know something is amiss.

That was the case last week when I called to check rates at the luxury chain’s hotel in Kuala Lumpur, Malaysia. Part of the low price can be blamed on this being rainy season; part on the reality that K.L. is less glamorous to tourists than, say, Bali. But the big news is Asia’s economic crisis. As it stretches from weeks to months, American travelers and tour operators are benefitting from plummeting foreign currencies, especially in Southeast Asia. In Malaysia, Indonesia and Thailand in particular, exchange rates can be as attractive to outsiders as they are alarming to political leaders.

Between early 1997 and Jan. 7, 1998, the dollar’s purchasing power nearly doubled against the Malaysian ringgit. It did double against the Thai baht. And it nearly quadrupled against the Indonesian rupiah. Since then, many currencies, especially the rupiah, have fallen substantially further.

But not all travelers there are going to get deals. If you’re taking a tour you reserved six months ago (at the higher, old prices) and you buy in tourist shops rather than local markets, many of the key savings may pass you by. Similarly, if you stay at a global chain hotel that sets its rates in U.S. dollars--as an increasing number are attempting to do--you’ll probably save less.

The travelers who save most amid the currency gyrations are those who a) negotiate hotel rates in local currency; or b) rent rooms or buy packages through tour operators who are passing along some of their deep savings to clients.

If you’re booking hotels directly, or your travel agent is, it’s crucial to recognize which businesses have abandoned local currencies and are holding to prices set in dollars. Tourism professionals say many Indonesian hotels, especially on the heavily touristed island of Bali, already were quoting prices in dollars (rather than Indonesian rupiahs), so their rates haven’t changed much.

But many lodging rates have tumbled in Thailand and Malaysia, where even global hotel chains had been routinely setting rates--and signed contracts with tour operators--in Thai baht or Malaysian ringgit. Bangkok’s renowned Oriental Hotel saw its bottom-end rates halved to $180 a night before it stopped quoting prices in Thai baht and switched to a dollars-only policy.

Veteran Asia-watchers say they expect restaurants to adapt more slowly than hotels to currency changes. Times foreign correspondents cite fine dinners in Jakarta for $4, in Manila for $12 (compared to about $20 a year ago) in recent days. Many agree that the best bargains are likely to be local services and locally produced products such as gems, silk and custom-tailoring in Thailand.

Airline tickets bought in local currency can be cheap, too. Times correspondent David Lamb reports that at least one Asian entrepreneur has seized on Thai Airways’ low baht-based prices in Bangkok (a Bangkok-California round-trip fare for $450) to stock up on tickets for future business trips.

Coco Quisumbing, a news anchor for Asia Business News Television, said that on a recent five-hour layover in Bangkok she got round-trip limo service and a massage for a total of about $25 in baht--less than the price of a bottle of nail polish in the airport’s dollars-only duty-free shop.

Tourists do need to keep in mind the possible side effects of local currency afflictions. On Jan. 9, noting the instability of currency, the U.S. State Department warned that travelers in Indonesia should “avoid demonstrations and other situations that could turn violent.”

Checking international hotels on Jan. 13 for a hypothetical February stay, I was quoted bottom-end rates of $76 at the Kuala Lumpur Hilton International, $78 at the Bangkok Hilton International. For an ocean-view room in the current low season at the year-old Ritz-Carlton on Bali (where brochure rates begin at $176), the rate was $118. The Kuala Lumpur Ritz-Carlton’s rates were even lower: 288 ringgit per night, which that day translated to just $87.

Ken Fish, president of Absolute Asia, an 8-year-old New York company that specializes in assembling customized leisure travel packages, is among the many who expect this strange interlude to be brief. He notes that as his contracts with hotels come up for renewal, hoteliers now ask to switch the terms to dollars from the local currency. But for now, Absolute Asia and many other tour operators can pass along bargains--if they choose.

Consider the Regent Chiang Mai hotel, a luxury resort in northern Thailand. Absolute Asia, which negotiated rates there in baht, has been offering its customers rooms (through March) for about $200 nightly, down from about $350 nine months ago.

At J&O; Tours, a San Diego-based operator that specializes in Asia, vice president for business development Kurt Bodmer says top officials are deciding now how much to cut the Southeast Asia prices they set in brochures three months ago. For instance, Bodmer expects to cut by at least 10% the price of a $1,148 package that included round-trip air fare between LAX and Kuala Lumpur and four nights’ lodging. Also, the company has a new, crisis-fed Thai special available through May. Round-trip air to Bangkok on Thai Airways plus five hotel nights: $998 per person.

“This is a short window of opportunity,” Bodmer says. Before the year is over, he says, “all this is going to adjust itself.”

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. He welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053 or e-mail chris.reynolds@latimes.com.