Submit Press release  eTN Team ·  Advertising  ·  eTN Awards  - Worldtourism Events    

Threat To Thai Tourism Recovery

Stiff competition from neighboring countries can hinder Thai tourism recovery

ERIC BELLMAN  May 27, 2010

BANGKOK — As the Thai government launches a campaign to woo back tourists after recent rioting here, its world-renowned hospitality industry is facing another threat: stiffer competition from neighboring countries working to increase their visitors.

Thailand's tourism industry is suffering from the recent two-month-long antigovernment protests, which ended on May 19 with 88 people dead and some of the capital's most popular shopping areas in flames. Hotels across the country are reporting less than 50% occupancy after many tourists changed their holiday plans to avoid the trouble.

The Thai travel business has a history of bouncing back from crises. It did after the 2003 outbreak of Severe Acute Respiratory Syndrome, or SARS, the 2004 tsunami that hit Phuket and nearby beach areas and a 2008 protest that shut Thailand's main international airport for days.

This time, however, the rebound could be weaker and take longer.

"It's much worse this time because people saw the city burning" after battles between antigovernment Red Shirt protestors and the military, said Apichart Sankary of the Association of Thai Travel Agents. "This has never happened before."

International tourist arrivals and revenues could fall between 10% and 20% this year, analysts said, depending on whether the protests flare up again. Such a decline would present serious problems for the country's economy, which relies on tourism for roughly 6% of gross domestic product and for more than 15% of its jobs.

Current woes also could affect a number of international brands developing new properties in Thailand, including Starwood Hotels & Resorts Worldwide Inc., which plans to open in October a St. Regis hotel in the central Bangkok area recently occupied by protesters.

Thailand also will have to deal with stronger competition from its neighbors. Singapore now has two casinos, at Resorts World Sentosa and Marina Bay Sands. Singapore had its best April ever, as tourist arrivals rose 20% from a year earlier, to 938,000. Malaysia also is in the middle of a strong push to bolster its tourism industry, including allowing more international carriers to fly into its airports.

Singapore and Kuala Lumpur are hubs of fast-growing low-cost carriers, making both places ideal as springboards into the region. AirAsia is based in Kuala Lumpur, while Tiger Airways uses Singapore its hub.

"Instead of making Bangkok their first stop, long-haul travelers could choose Singapore or Kuala Lumpur," said Annuar Aziz, an analyst at Credit Suisse in Kuala Lumpur. "You spend a few days at the new resorts and casinos then you say, 'Let's go to Angkor Wat.' "

Mr. Annuar expects tourist arrivals to slide in Thailand this year and continue to climb in Malaysia. Visitor arrivals in Singapore could rise more than 20% for all of 2010, he estimates, and nearly double over the next six years.

People within the tourism industry in Thailand say they intend to fight back. The government is planning to make more than five billion baht ($150 million) available to tourism-industry businesses in low-interest loans with two-year grace periods. it also intends to waive visa fees for some countries and lower the landing fees for airlines.

To promote a more positive image of Thailand, Bangkok will have a street fair in one of the affected areas this weekend dubbed the "Together We Can" Grand Sale with 700 booths and performers to show the city streets are safe again. On Wednesday, the city held an official blessing ceremony and gathered 1,000 monks to accept merit-making offerings.

The government is even considering bringing a big international soccer match to Bangkok to spur excitement and confidence, said Attachai Burakamkowit, permanent secretary of the Ministry of Tourism and Sports.

"The first step is an image restoration plan, then we have a foreign-guest stimulus plan and then a domestic tourism plan," Mr. Attachai said. "We are going to have more commercials to promote the product of tourism."

The government's measures, years of brand-building and a deep reservoir of travelers that keep returning will power the recovery, local boosters say.

"Thailand is still hot, the Thai people are still warm and it's still great value for money if you are comparing it to other countries," said Mr. Apichart of the Association of Thai Travel Agents. "The people will come back as long as the government can stop the emergencies" and end a nighttime curfew in Bangkok.

But if prolonged protests do return—as some political analysts expect—the damage to the image of Thailand may become permanent and more potential customers will choose other destinations in the region.

Thailand's recent instability "has been stretched out for so long that a lot of people have given up on Thailand and are saying this place is just a mess," said Christopher Bruton, the Bangkok-based executive director of risk consultancy Dataconsult Ltd. "Thailand may well be cut out of some travel brochures."

Stiff competition from neighboring countries can hinder Thai tourism recovery
Image via


Premium Partners