An Asian Contagion.(affect of SARS on Asian travel, economy)

Something is missing at Korea Ginseng Chicken Soup: hungry diners. Until recently, tourists from China, Hong Kong and Taiwan thronged the popular Seoul eatery to savor its signature dish. Nowadays the supper crowd has shrunk to a few dozen each evening, and most ask for disposable chopsticks or request that the meal not come family style to prevent the spread of germs. Among the patrons last week were 10 Taiwanese visitors who sat forlornly amid a sea of empty tables. "We are having the worst time ever," their guide, Choi Dong Soo, said, sighing.

More bad times are certainly on the menu. Across Asia, a region relatively remote from war fears, pestilence is the specter that haunts the economy. Although the death toll from severe acute respiratory syndrome (SARS) remains relatively small, fear that a killer virus is rampaging unchecked has stunted commerce from Seoul to Tokyo to Singapore, with dramatic implications for the rest of the world. Beyond the obvious victims--travel, shopping and the once ubiquitous business lunch--SARS has derailed trade shows, delayed movie releases, shuttered factories and threatened to disrupt the flow of everything from Nike sneakers to Motorola handsets. "It's not just like we got hit by a truck," laments Yu Pang-Chun, chairman of the Hong Kong Retail Association, whose 500 members report sales declines of 30 to 80 percent. "It's like a truck, a bulldozer and a locomotive fell on us. This is the worst crisis we have ever seen."

The economic prognosis is still largely guesswork. Yet analysts across the region forecast losses that, in some cases, approach the magnitude of the 1997-98 Asian financial crisis. Last week BNP Paribas downgraded its GDP forecast for eight Asian countries by 0.4 to 1.5 percent. Goldman Sachs, in turn, warned that losses in Hong Kong, Singapore, Taiwan and Thailand could amount to 31, 25, 20 and 15 percent of GDP respectively this quarter--or roughly $38 billion just in those four economies. "China is the wild card," writes --Morgan Stanley's chief economist in Hong Kong, Andy Xie, who says Beijing's mismanagement of the outbreak could undermine investors' trust in the world's fastest- growing economy. "Ultimately, the potential impact on Hong Kong's economy... is unknowable and essentially impossible to estimate," warns a new report by UBS. "We do not yet know the severity of the outbreak-- are we at the beginning, the middle, or the end?"

Regardless, the damage is being felt now. Japan Airlines entered April believing that SARS would have little influence on its bottom line. The 20,000 cancellations for the month were roughly double the March tally, and those were mostly ascribed to war jitters. Now, Japan Airlines expects further flight cuts are inevitable. Also citing SARS damage, Air Canada has declared bankruptcy, while other North American carriers--chiefly United Airlines and Northwest--are bracing for a crash in transpacific traffic. Singapore Airlines cut 60 flights from its weekly schedule, following similar moves by Hong Kong's Cathay Pacific and Dragonair.

The knock-on effect has hit hotels, tourist markets and restaurants-- even taxis. Singapore driver Law Swee Choon still takes passengers to the airport, but now he returns with an empty car to avoid ...