Southeast Asian tour operators are diversifying their markets with offers to exotic destinations like Mongolia and Indochina to cushion the blow of a war in Iraq, an industry group said today.

Malaysian Association of Tour and Travel Agents (Matta) president Tunku Iskandar Tunku Abdullah said war jitters have led to a shift from long-haul travel to shorter flights to Asia, Australia and New Zealand.

But he said the industry was more prepared now than it was during the 1991 Gulf war which led to a slump of more than a year. Tour operators have also become more innovative after the Sept 11, 2001 terrorist attacks in the United States.