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27 Oct, 2003

Security Companies Salivate at Opportunities From Terrorism

Security companies are salivating at the prospects of generating billions of dollars in business from travel & tourism as a result of the overwhelming anti-terrorism focus of the final statement issued by last week’s APEC summit.

The leaders made a direct reference to travel & tourism when they agreed in the communiqué to “strengthen our joint efforts to curb terrorist threats against mass transportation.”

The two more specific references included the commitment of APEC leaders to help combat the threat of weapons of mass destruction by “adopting and enforcing export controls” and supporting the “implementation of the Advance Passenger Information (API) System pathfinder initiative and efforts to explore development of a regional movement alert system to protect air travellers.”

While export controls will mean higher costs for the cargo side of the aviation industry via the STAR (Secure Trade in the APEC Region) initiative, the API system will mean increased surveillance of airline passengers, especially those traveling on the trans-Pacific sectors.

Effectively, the communiqué has cleared the way for the controversial transportation-related provisions and regulations of the Department of US Homeland Security to be rolled out in the APEC region.

Not only has Asia-Pacific travel & tourism industry not been consulted on any of these provisions, it will soon be in a no-choice position due to an ‘audit’ scheme being introduced by the International Civil Aviation Organization under which global airports will have to pass stringent checks in order to be ‘certified’ for operation.

So far, the only global travel grouping to have seriously questioned who is to pay for these additional costs is the International Air Transport Association whose Director General Giovanni Bisignani says governments should pay for for security in the air just as they pay for security on the streets.

Whoever pays, the costs of installing all the new equipment and gadgetry are expected to be astronomical. Just one X-ray machine to secure cargo costs in the vicinity of US$ 3.5 million, excluding training, upgrading and future expenditure on spare parts and maintenance.

The primary beneficiary of these contracts are expected to be American and Israeli security consultants who own and operate companies which were among the major sponsors of last February’s APEC meeting that discussed the STAR initiative.

US aerospace contractors are also forecasting more revenues from military and defence-related contracts than civilian. At the end of 2002, Boeing generated 53pc of revenues from civilian aircraft sales and 47 % from military.

Says the Boeing annual report for 2002, “The commercial aviation market is experiencing its most severe downturn ever, and recent airline announcements confirm that recovery in the United States will be slower than many had expected. Conversely, our defense, intelligence and non-commercial space markets remain strong, with significant growth expected in several key areas.”

The travel & tourism industry is facing additional hassles as frontier formalities are tightened via smart-cards, electronic visa systems, machine-readable passports, fingerprint-, face- and iris-recognition technologies.

In addition to aviation, hotels too are coming under pressure to buy millions of dollars worth of surveillance and monitoring equipment.

Security consultants are also polishing up their marketing skills. At a regional hotel conference in Hong Kong earlier this month, a panel of security executives used all the classic marketing buzzwords to convince sceptical hoteliers that this should be seen as an “investment” not a “cost.”

The consultants say this “investment” is necessary to build up the “trust” that customers will need to have in the hotels they use. They say that multinational companies will not use “insecure” properties for their business travel clients nor meetings and conventions, nor will multinational insurance companies extend cover unless the hotels have passed a “security audit.”

One of the speakers, Alan Orlob, Vice President of Loss Prevention, Marriott International Inc., came armed with video clips of the scenes recorded by the electronic surveillance cameras before and during the explosions at the JW Marriott hotel in Jakarta last August.

Mr. Orlob admitted that meetings like APEC and the recent ASEAN summit in Bali are yielding security agents a treasure trove of intelligence about the police and military apparatus in the countries concerned, including cultural issues.

Said Mr. Orlob, “We are learning who makes the decisions in these countries, who pushes the button to engage, who is the point man.”

Even as the travel & tourism industry worries about the blurring distinction between “building security and building fortresses,” security companies say there is no 100 % guarantee even after all the latest equipment is installed.

Their view is that continued vigilance and expenditure is necessary in order to ensure that “hard targets do not become soft targets”, i.e., the better fortified a place is, the less likely it is to be targetted.

They claim that hotel owners “realise that in the old days, security meant only ensuring proper fire-protection devices. Those days are gone…..Guests are wiling to pay more for peace of mind. They are saying, “Now I feel better that your hotel is doing its best to take care of me’.”

As for those who still need to be convinced, “I suspect there will be a court case that will cost someone serious money,” said Mr. Orlob.

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