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Travel slump hits tsunami areas

By Nick Easen for CNN

The travel industry is using new images to promote destinations previously affected by the tsunami.
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(CNN) -- Travel and tourism spending in countries hit by the December 26 tsunami is experiencing a renewed slump, after an initial recovery two months ago.

The economies of the areas that were hit still remain fragile and are likely to take a lot longer to recover, according to fresh data from credit card firm Visa International.

Spending by cardholders fell in April and May in Phuket, Maldives and Sri Lanka compared to last year -- all destinations that were hit by massive waves that killed an estimated 273,800 people and left thousands missing.

The drop in spending coincided with the earthquake on the Indonesian island of Nias on March 28 and the resurgence in tsunami fears.

Travel industry experts at a recent World Tourism Organization (WTO) conference in Bali also concluded that the recent spending slump corresponded with a drop in media coverage and interest in the affected areas.

Figures released at the conference showed that credit card spending at Phuket in the week ending May 8 was 37 percent lower than the same week in 2004, despite being up by six percent in March.

A similar picture occurred in the Maldives, where a recovery between February and March was followed by a 35 percent year-on-year decline in May.

"We found that $3 billion is likely to be lost from the tourism industry in the region -- but that is turning out to be a conservative estimate," James Murray, Visa's executive vice-president for Southeast Asia, told the conference.

According to a Visa survey conducted in March, travelers are still concerned about health and safety, as well as the state of the infrastructure in the affected areas.

The data suggests that travelers from some countries were also more traumatized than others -- spending by U.S. tourists increased in May while spending by Taiwanese was down significantly.

"Tourists need more information about the impact the tsunami has had on tourist facilities," said former U.S. president and special U.N. envoy Bill Clinton in a video message to the WTO conference.

"Some potential tourists simply do not know that many of the resorts in the region are fully recovered and open for business."

Jero Wacik, the Indonesian Minister of Culture and Tourism added that, "this confusing perception is already having a dramatic effect on the tourist arrivals in all regions in Indonesia."

Tourism experts at the conference likened the impact of the tsunami to other problems that have hit the region, such as the SARS outbreak in 2003 and the Bali bombing of 2002. The travel industry took months to recover from both of those tragedies.

According to data from Visa, the Indonesian island of Bali has shown 18 consecutive months of positive growth in credit card spending since November 2003.

The conference highlighed the fact that many areas in Asia did not suffer from the tsunami, yet they have experienced a slump in tourism due to people's perceptions about the region.

Many in Asia's travel trade also realize the importance of leisure and business travelers to the region's economy.

"The average tourism worker supports five other people in Asia," says Deborah Luhrman, a WTO consultant.

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