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Thailand Crisis

Thailand tourism hopes from the new government’s decision

Stéphane Hanot, eTN Staff Writer  Dec 19, 2008

BANGKOK, Thailand (eTN) - With Thailand’s tourism and air transport industry sink into a deep crisis, all players from the travel sector now wait for the newly elected government of Abhisit Vejjajiva to define priorities to revive a collapsing industry.

The mood is rather somber in the streets of Bangkok; almost two weeks after protesters to the previous Thai government lift their siege on both Bangkok’s airports. Hotels report occupancy rates being down at 30 percent, even less for some properties; the number of daily flights recorded at Bangkok airport fluctuate around 500 per day, compared to over 700 prior to the crisis. Many restaurants already closed their doors as they lack customers. And hundreds of shops might soon follow. Last Saturday night on Silom Road, Bangkok’s most famous nightspot, looked rather empty with just a couple of tourists looking at the selling booths along the road.

Of course, both the Tourism Authority of Thailand (TAT) and airlines are looking to work out plans to smoothen the impact of the recent political turmoil. But the damage done to the country’s image seems long-lasting this time around.

“We have to boost again confidence into our country. I believe it should be a priority task for the new government. An apology at highest level for what happened should be internationally conveyed as well as a promise that such things will not happen again,” said Juttaporn Rerngronasa, TAT deputy governor for Marketing Communication.

So far, only TAT and the former tourism minister sent an apology to stranded travelers. TAT is even thinking of sending a personal letter to all stranded passengers with an invitation to come back to Thailand at discounted prices next season.

Although TAT stresses that there was no casualties against any tourist and that they were all safe, the lasting image around the world will be foreign visitors being like “hostages” as they were trapped into the country with little possibility to leave. An airline executive based in Bangkok even indicated that Thai Airways and Airports Authority of Thailand (AOT) employees fled away from their work on the night when protesters seized the airport and left passengers stranded.

“We immediately delegated our own staff to help with passengers. We were 24 hours a day available to support foreign visitors stranded at Suvarnabhumi. And the Association of Travel Agents as well as hotels did a great job to help,” Rerngronasa added.

TAT predicts that Thailand tourism woes will now last between four and six months with the country losing over US$ 2.8 billion in tourist revenues. “We forecast that total international tourist arrivals will only reach 11 million in 2009 compared to earlier forecasts of 15 million. We expect a reduction of foreign travelers in a range of 2.5 to 2.7 million,” Rerngronasa said.

Most affected markets will be Japan, China, Korea. “Japan will definitely the worst affected incoming market. For Europe, the recovery should take approximately six months. However, we still see chances for Australia, the Middle-East and Scandinavia to bounce back quicker,” the TAT deputy governor of Marketing Communication said.

What will be the next steps? TAT is revising its marketing plans. With the new administration in place TAT will now ask for extra budget to mount up a new information and promotion campaign. For the time being, TAT is focusing on the domestic market. “We already launch a campaign based on the slogan “travel for your nation” as it will help to ponder the economic impact from lost international tourism revenues. We also work with our creative agencies for a slogan for our international markets with the idea that Thailand still cares for its visitors,” Rerngronasa said.

The TAT deputy governor also confirmed that TAT is in talks with the aviation industry as well as hotels to launch special priced last minute packages. “With our partners from the private sector, we want to talk to the new Abhisit government to see if VAT on hotels and restaurants could be lowered or look at reducing charges for airlines flying into Thailand,” she said. First packages on domestic flights are already offered with major airlines such as AirAsia, Bangkok Airways and Thai Airways International.

Airlines confirm in fact that they are also looking for some support to revive collapsing figures. According to AOT, the average number of daily passengers at Bangkok airports is down to 56,000 compared to 100,000 last year.

“We already opened the dialog with AOT to look at compensation measures following the airports seizing. We would like to see a reduction in charges or some financial incentives to balance the incurred losses during the one-week closure of the airport,” explained Brian Sinclair-Thompson, president of the Board of Airlines Representatives in Thailand (BAR). “However, we now have to wait for a decision from the new Minister of Transport and we can’t speculate about the outcome.”

The International Air Transport Association is also aking the government to compensate airlines for the financial damages and look for a solution to be sure that losses of revenues for the airport’s authority will not be passed onto airlines.

According to a report from the Bangkok Post, Thai Airways estimates that the one-week closure of the airport translated into some US$ 575 million losses in revenues.

Thailand tourism hopes from the new government’s decision
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