Tibet unrest dents Shangri-la tourism, but temporarily

By John Ruwitch

SHANGRI-LA, China (Reuters) - Excusing himself from the banquet table, Liao Chunlei stood up, wine glass in hand, and belted out a traditional folk song with colleagues as his face turned red with drink.

"In these parts," said Liao, head of the tourism bureau in this ethnic Tibetan mountain town in southwestern China, "if you can talk you can sing and if you can walk you can dance."

The singing and countless toasts of two dozen tourism officials celebrating a deal to develop a remote mountain park seemed to belie the fact that 2008 was likely to be a write-off for tourism in Shangri-la and other Tibetan areas.

Tours were halted across the Himalayan region after anti-Beijing protests rippled across Tibetan-populated parts of China and devolved into rioting in Lhasa on March 14, just as the peak travel season should have been starting.

Even when tourism eventually picks up -- and almost everyone here believes that is inevitable -- the tensions that some say led to the unrest may continue to go un-addressed.

Since the rioting, most Tibetan areas have re-opened, although security remains tight and many travelers remain wary -- even of Shangri-la, where there were no protests or violence.

On a narrow cobblestone street in the old part of town, Nepalese chef Bhaskar Diyali stood outside with his hands in his pockets one evening during what should have been the dinner rush.

"I never had free time like this last year," he said. "Many shops, they close. Even many restaurants close."

Elsewhere in the old quarter, Liang Fuhua's friend tried to persuade him to close his camping shop early and go for a beer because so few people were about. Liang estimated that about half the number of last year's visitors had come so far this season.

"I'm not very optimistic about the prospects for us ahead of the Olympics," he said. The Beijing Games run from August 8-24. "And then, by October, it's getting cold."

This month there were three flights a day arriving at Shangri-la, situated in the Himalayan foothills at an altitude of 3,200 meters (10,500 ft) in the northwestern corner of Yunnan province. Last year there were many more, one official said.

The devastating May 12 earthquake centered in neighboring Sichuan province, killing nearly 70,000 people, also put off tourists.

TOURIST TAKE-OFF

But the pain will likely be short lived here in Shangri-la, which was built for tourism -- literally -- and the momentum behind its growth as a tourist destination is substantial.

The hill covered county was called Zhongdian until it was re-named in 2002 after the mountain valley community in James Hilton's 1933 novel, "Lost Horizon". The re-branding transformed the landscape.