By Karamjit Kaur & Serene Luo

RISING fuel prices, a sluggish global economy and inflation are slowing the stride of globetrotters.

A June dip in the number of visitors to Singapore – the first slide in 51 months – mirrors the woes of the embattled global travel industry.

Around the world, the number of airline passengers grew just 3.8 per cent in June, the smallest increase since the Sars virus hit five years ago, said the International Air Transport Association (Iata), which released its traffic figures on Monday.

Last week, the Singapore Tourism Board (STB) reported that Singapore welcomed just 816,000 visitors in June, 4.1 per cent fewer than the same month last year.

Both the STB and Iata have warned that things could get worse before they get better.

Airlines are especially endangered, said Iata’s director-general and chief executive officer Giovanni Bisignani.

They could lose up to $6.1 billion this year, wiping out 2007’s profits. “Falling demand and rising costs are re-shaping the industry,” he said.

“The airline sector is in trouble.”

Fuel prices have jumped by more than 40 per cent since the start of the year. Inflation, which is pumping up prices of everything else from rice to rent, could also be leaching away money people might otherwise spend on leisure pursuits, such as travel.

The average airplane was 77.6 per cent full in June, about 1.2 percentage points lower than in the same month last year.

Hospitality managers are divided.

Although all are looking to big-ticket events to boost occupancy towards the second half of the year – especially with the Formula One race revving up next month – others are worried about the worldwide slowdown in the long run.

A spokesman for Hong Leong Group – whose subsidiaries run five hotels including the Grand Copthorne Waterfront Hotel and Orchard Hotel – said July occupancy rates were down by less than 1 per cent compared to a year ago.

The group is optimistic it will meet its targets for the rest of the year, she said.

Pan Pacific’s public relations manager Cheryl Ng said the September-November period, especially, is looking good with high demand for corporate meetings.

She added that, overall, “there is no sign of regression at present”.

The Royal Plaza on Scotts, which was about 95 per cent full in July compared with 88 per cent in the same month last year, expects occupancy rates to stay strong at between 80 and 90 per cent for the rest of the year, said general manager Patrick Fiat.

Even so, although the Grand Hyatt Singapore expects turnaround to be quick, business this year “may not be on the same level as last year due to the slowdown in overall arrivals into Singapore”, said a spokesman.

Mr Raymond Ang, general manager of Meritus Mandarin Singapore, noted that some companies are booking fewer rooms because of a slowing global economy.

Overall though, Ms Ailynn Seah, director of sales and marketing for Hilton Singapore, expects business travel to hold up although the “leisure sector is more cautious with spending due to inflation and oil prices”, she said.

This article was first published in The Straits Times on August 9, 2008.