Commercial Travel Routes Now Link Many Enemy Nations, PricewaterhouseCoopers and Bear Stearns Report.

NEW YORK--(BUSINESS WIRE)--June 7, 1999--

Organized People Flow Can Ease Cross-Border Tensions, Firms Say

New commercial travel routes are uniting more people and places historically separated by cross-border tension and even war than at any time in history, according leisure industry researchers at PricewaterhouseCoopers and Bear, Stearns & Co. Inc. The change comes as new travel service providers at points around the globe seize business opportunities to move people across frontiers once considered by businesses and governments to be closed, the firms say.

"As the new century approaches, peace processes and the lure of commerce are having beneficial effects in a variety of the world's traditionally avoided locales," says Bjorn Hanson, Ph.D., global partner in the PricewaterhouseCoopers hospitality and leisure group, a unit of the firm's Financial Advisory Services (FAS) practice. "We are seeing an unprecedented movement of people across borders once considered closed to travelers," says Jason Ader, Bear Stearns Senior Managing Director for leisure industry research.

For example, a major cruise operator now runs a passenger line between North and South Korea, PricewaterhouseCoopers and Bear Stearns say. Tourists on some cruises departing South Korea are able to travel to North Korea and disembark to enjoy hiking and the beaches of Mt. Kumgang in the eastern province of Kangwon just north of the 38th parallel, say Joseph Toy, director of PricewaterhouseCoopers hospitality and leisure practice based in Honolulu and Neil Haines, PricewaterhouseCoopers hospitality and leisure consultant based in Jakarta, Indonesia.

"It is truly remarkable that even these limited travel arrangements have been created between North and South Korea, two nations technically still at war following the armistice of 1953," Mr. Toy observes. The passenger cruise service began in November of 1998, according to Mr. Haines in Jakarta, and to date, 50,000 South Korean tourists have visited North Korea.

In another example, India and Pakistan are now linked by the first commercial bus service between the two nations in more than half a century, PricewaterhouseCoopers and Bear Stearns report. As of February 20, 1999, bus passengers can travel the 300-mile route between India's New Delhi and Pakistan's Lahore for the equivalent of $19 (US). India and Pakistan have endured years of adversarial relations that thwarted peaceful cross-border travel.

In the Middle East, there is more peaceful movement across borders than at any point in the latter half of the 20th century, according to PricewaterhouseCoopers and Bear Stearns.

"For those carrying Israeli passports, travel options in the Middle East have historically been extremely limited," observes Bernard Delomenie, Budapest-based leader of the PricewaterhouseCoopers hospitality and leisure practice in Europe, the Middle East and Africa. "However, peace agreements over the last 20 years have opened new travel options."

"Today, regular bus or air service connect the Israeli cities of Jerusalem and Tel Aviv with Cairo, Egypt and Amman, Jordan," according to Mr. Ader of Bear Stearns in New York. "Additionally, travel from Israel to China and the former Soviet Union, Morocco, Ethiopia, Tanzania and parts of Indonesia are possible today, although Israel does not currently have diplomatic relations with all of those states," he adds.

Further, the first commercial Lybian Arab Airlines flight recently landed at Amman, Jordan's international airport after the suspension of a seven-year flight ban between the nations, PricewaterhouseCoopers and Bear Stearns say. Meanwhile, Royal Jordanian Airlines said it will soon resume regular flights to Tripoli. Swissair, Lufthansa and Austrian Air have announced plans to begin service to Libya after years of flight bans as well. Additionally, Libya said it plans to open a travel bureau in Japan to offer tourist packages to Japanese travelers it hopes will visit Libya.

In the United States, direct charter air service to Havana, Cuba from Miami, Florida is possible for U.S. citizens traveling with U.S. State Department approval, PricewaterhouseCoopers and Bear Stearns researchers say. The U.S. government makes available special visas for citizens traveling for humanitarian, academic and journalistic reasons.

"With an historically tense relationship between the two nations, U.S.-Cuba travel has always been minimal and tightly regulated," says Scott Berman, Miami-based partner in the PricewaterhouseCoopers hospitality and leisure group. "But since 1994, there has been a 10 percent annual increase in authorized U.S. travelers to the island, and today there are more people-to-people exchanges than ever before."

"For example, the Baltimore Orioles recently played an exhibition game in Cuba. Renowned American musicians Gladys Knight, Peter Frampton, Mick Fleetwood and Jimmy Buffett were in Cuba to perform alongside Cuban musicians at a March 28 concert at Havana's Karl Marx Theater. Two U.S. Senators also visited Cuba this spring. This kind of travel and exchange is unprecedented," Mr. Berman adds.

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