Asian travel-related stocks such as Genting, which trailed regional indexes during the past two years, may outperform as the industry bounces back from setbacks such as last year’s tsunami.

Growing incomes in countries such as China and India and the emergence of discount airlines such as Malaysia’s AirAsia are encouraging people to take vacations abroad. Tourist arrivals in Southeast Asia may rise by as much as 10% this year and the next, an industry group forecast last week.

“Travel is a big theme,” said Teng Ngiek Lian, chief investment officer at Target Asset Management in Singapore. “There’s rising affluence, younger consumers are now traveling, and low-cost carriers; all these are contributing.”

The Bloomberg Asia-Pacific Travel Index, a measure of 27 hotel, gaming, and airline stocks, has fallen less in the past month than Morgan Stanley Capital International’s Asia-Pacific Index. The travel index has lost 4.8%, compared with a 5.6% decline in the regional benchmark.

Governments are seeking to capitalize on increased tourism. Singapore lifted a four-decade ban on casinos last week and has received bids for two sites. In Hong Kong, Walt Disney will open a $3.5 billion theme park in September that the government helped finance.

“As China in particular grows and spurs growth around it, the number of people wanting to travel in the region will increase substantially,” said Marc Faber, managing director of Marc Faber Limited in Hong Kong.

While the Bloomberg travel index rose 15% last year and 21% the year before, the MSCI Asia-Pacific index outpaced it in both years. The war in Iraq, outbreaks of diseases such as SARS, and terrorist acts reduced tourist travel in Asia.

International tourist arrivals fell 9.2% to 119 million in 2003 after more than doubling between 1990 and 2002.

Last December’s tsunami ended a year in which arrivals rebounded, climbing 29% to 153 million.

“The region is recovering,” said Bryan Yip, who helps advise on $3 billion in stocks at Standard Life Investments in Hong Kong.

The Pacific Asia Travel Association, at a conference in Macau, forecast that total tourist arrivals in Asia may rise at almost double the rate projected for the Americas. For the five years ending in 2007, the group forecast that Malaysia would have the region’s highest annual growth rate, 21%.

China will have the region’s fastest growth in outbound travelers during the first half of 2005, according to a 12-country survey that MasterCard International published last month. The company projected a 34% increase.

Last year, 28 million residents went abroad, according to the China National Tourism Administration’s Web site. That’s a 40% increase from 20 million the year before, as compiled by the World Tourism Organization. China began easing travel restrictions in 2003.

“Everyone is salivating over the number of Chinese tourists,” said Alan Richardson of Baring Asset Management in Hong Kong.

Rising incomes have contributed to the growth in tourism. China had 1.97 million households with assets of more than $100,000 in 2003, according to a report from Boston Consulting Group, up 8.2% from 1.82 million the previous year.

The number of Indian households defined as wealthy grew even faster. India had 349,000 in 2003, a rise of 44%, according to Boston Consulting Group.

Mr. Yip of Standard Life said he favors hotel companies and has shares of Hongkong & Shanghai Hotels, owner of the luxury Peninsula chain, and Genting.

Hongkong & Shanghai Hotels’ profit rose 64% to HK$574 million ($74 million) in 2004, it said last month.

Shares of Genting, based in Kuala Lumpur, have risen 5.2% this month after falling 9% in the first quarter. The company is among 13 bidders to develop casinos in Singapore. The city-state’s prime minister, Lee Hsien Loong, said gambling will be allowed at two resorts that will open around 2009.

Hong Kong’s government has a 57% stake in the Hong Kong Disneyland theme park.

Disney said last month that it had accepted 10,000 reservations for its two hotels at the Hong Kong park since February. The company expects to attract 5.6 million visitors to the park in its first full year of operation.

Discount airlines have reduced the cost of reaching cities such as Hong Kong. To compete with national carriers on short-haul flights, they offered promotional fares as low as S$1 (61 cents) and regular domestic fares of 9.99 ringgit ($2.63).

AirAsia shares are among those recommended by CLSA Limited’s Christopher Wood, last year’s top-ranked strategist in a survey by Asia money magazine. The Kuala Lumpur-based airline made its initial stock sale in November and has risen 37%.

Shares of Asia’s national carriers have been held back by higher oil prices, which have increased the cost of jet fuel and hurt profits.

Richard Evans at Martin Currie Investment Management in Edinburgh, Scotland, isn’t deterred. Mr. Evans said he sees potential for gains in low-cost airlines as well as tour operators.

Travel-related stocks are “a play on disposable income,” he said. “We’re huge bulls on the sector.”