The Irish travel industry is watching the escalating SARS crisis with increasing concern. Having suffered the double whammy of an economic downturn and the war in Iraq, which dented consumer confidence in international travel, industry leaders are now worried that SARS may spread into the crucial summer holiday season.

Already agents specialising in flights and packages to south-east Asia, Australasia and Canada are reporting a drop-off in advance bookings and long-haul stopovers as people heed the recent Government health warnings to stay clear of SARS hotspots.

Sino-Irish Travel, which employs three people in Dublin, said forward bookings for its key destinations of Beijing, Shanghai and Hong Kong are down by 50 per cent, while more than 120 people have cancelled tours departing in April and May.

Sino-Irish Travel managing director Mr David Hoe has been so concerned about the effect of SARS on his business that he decided to accompany the current Irish travel groups to Beijing and Shanghai.

Twenty teachers from a school in Maynooth and another 10 Irish holidaymakers are touring northern China, despite advice from the Department of Health to avoid "non-essential or elective" travel to Beijing.

But Mr Hoe claims there is little evidence of the epidemic in China's bustling capital. Speaking to The Irish Times from a crowded market place in rush-hour Beijing, he described the atmosphere in the city as "normal" and said only a handful of Chinese people were wearing the facial masks.

"The Irish are very worried about this disease but there is no concern here. Really it is very normal. I think travel to Beijing and Shanghai is quite safe," he said.

But, in the travel industry, it's perception that counts.

According to Mr Peter Conway, marketing manager for Atlas Travel, which employs 40 people in Ireland, SARS was the "last thing the travel business needed after Iraq".

He said: "Sales have been sluggish for the last six to eight weeks because of the ongoing Iraq crisis. Now we have the SARS epidemic just when we were looking for an upturn in travel bookings."

Atlas Travel has featured the US and Canada as key holiday destinations for more than 30 years. But the company is now focusing its attention on popular short-haul destinations in Europe, such as Croatia, Italy and Spain.

"Sales for the US have been sluggish this year. We had hoped that strong bookings for Canada would pick up some of this shortfall, although at this stage it seems SARS has put a stop to that. Now we are focusing on European destinations."

However, UK-owned travel agency Trailfinders, which primarily serves Australasia, south-east Asia and the US, said stopovers in Singapore and Hong Kong have plunged since the SARS crisis but stressed there was no substantial impact on direct flights to Thailand, Australia and New Zealand.

Trailfinders assistant manager Mr Matt Lama, said: "People have become more resilient to global crises after September 11th. Our direct sales to Australasia are still good. The only difference is few people will stopover in Singapore or Hong Kong. If they do fly there, they won't leave the airport. We are also getting a lot of requests for re-routed flights through Bangkok or Kuala Lumpur."

This week, the World Health Organisation's disease expert, Dr David Heymann, indicated that SARS had the potential to become a worldwide epidemic.

This week also, the SARS crisis took a sinister turn, with Hong Kong reporting the highest number of fatalities from the disease in one day.

Despite the rash of bad news, the Irish Travel Agents Association remains up beat. Its Chief executive, Mr Brendan Moran, said he wasn't aware of any serious downturn in sales as a result of SARS.

However, he conceded that any escalation of the crisis into the summer holiday season "could cause a problem" for many businesses.