The longer Thailand's instability lead others to plan elsewhere, the more years it will take its diverse tourism market to recover.
Thai anti-government protests that have shut down parts of Bangkok may cost the nation’s tourism industry as Chinese visitors cancel trips during the lunar new year holiday that starts this week.
Arrivals will fall by half to 1 million this month, Minister of Tourism and Sports Somsak Phurisisak said Jan. 23, with some hotels in the capital and nearby Pattaya and Hua Hin 30 percent full. The revenue loss could amount to 22.5 billion baht ($685 million), the Tourism Council of Thailand said, with China last week warning its citizens to avoid protest sites and rethink non-essential travel.
“I first planned for a week-long trip to Bangkok to visit my friend there for Christmas, but I had to postpone because of the unrest,” said Jia Yanfen, 38, a Beijing-based Chinese language teacher who has never been to Thailand. “I waited and waited hoping to go for Chinese New Year,” Jia said. “I had to cancel the trip now. Of course I was a bit disappointed, but safety comes first.”
Prime Minister Yingluck Shinawatra imposed a state of emergency in Bangkok Jan. 22 as attacks on protesters escalated and demonstrators blockaded Bangkok’s busiest intersections. Concerns about a slump in tourism, which contributes about 10 percent to gross domestic product, sent the Stock Exchange of Thailand’s Tourism and Leisure Index down 3 percent last week, the worst performer among the bourse’s 27 industry groups, according to data compiled by Bloomberg.
“The biggest concern now is the prolonged protest begins to significantly affect the tourism industry, which was the only bright spot for the economy in 2013,” said Porranee Thongyen, the head of research at Asia Plus Securities Pcl. “With sluggish consumption and investments, a slump in tourism revenue would further worsen the overall economy,” she said by phone.
Bangkok attracted almost 4.2 million visitors from China, Hong Kong and Taiwan in 2013, a 46 percent jump from the year before, according to government data, and Somsak said about 300,000 Chinese tourists traditionally visit the country during the lunar new year holiday, which begins Jan. 31. “We expect to see more flight reductions by airlines, especially from China,” he told reporters in Bangkok.
Singapore Airlines Ltd. will cancel 43 flights between Singapore and Bangkok between Jan. 14 and Feb. 27, and Thai Airways International Pcl plans to scrap 25 flights between Hong Kong and the capital, the carriers said last week.
Tourist arrivals will decline by 7.3 percent to 6.5 million in the first quarter compared with a year earlier, the Tourism Council said in a statement Jan. 23. Bangkok arrivals have fallen 5 percent in January from a year earlier, it said. Since the protests began in October more than 550 people have been wounded and nine killed.
Advance bookings have been crimped by travel warnings from countries such as China, Malaysia, Hong Kong, Australia, the Philippines and the U.S., whose authorities have warned citizens to avoid Bangkok’s protests hotspots. The Philippines said Jan. 23 its citizens in the capital should prepare to be evacuated if violence intensifies.
Tour guides from China are in close contact with counterparts in Thailand, Ying Chang Tian, a spokesman for Shanghai-based travel agency Ctrip.com International Ltd., said by phone. “Our local agency in Bangkok will report to our company if the situation affects our schedule.”
The tourism industry rebounded from protests that shut the main airport for almost two weeks in 2008 and turned inner Bangkok into a war zone in 2010, as well as from disasters such as the Indian Ocean tsunami that devastated beach resorts in 2004 and floods in 2011.
“Politics aside, Thailand’s fundamentals are exceptionally strong,” Elena Okorochenko, managing director for Asia-Pacific sovereign ratings at Standard & Poor’s in Singapore, said at a conference. “Its external debt position is still very sound, its monetary policy is extremely credible.”
People are still visiting other parts of Thailand, according to Philip McNicholas, a Hong Kong-based economist at BNP Paribas SA. “Reading into just the impact for Bangkok and extrapolating that across the country is probably taking it a little bit too simply,” McNicholas said in a Bloomberg Television interview last week.
“In 2010, 70 percent of tourists went in through Bangkok, now it’s down to 60 percent,” he said. “It may prove somewhat more resilient than people expect.”
Thailand’s government imposed the state of emergency in Bangkok after bombings and shootings in the capital left one person dead and 70 injured. The Constitutional Court Jan. 24 ruled that a delay in the Feb. 2 election was possible.
Suthep Thaugsuban, an opposition politician leading the protests, has vowed to continue the blockades that began Jan. 13 until Yingluck resigns. Suthep wants the government replaced with an unelected council that would change laws to prevent parties linked to former premier Thaksin Shinawatra, Yingluck’s brother, returning to power.
The violence has been mostly restricted to well-defined protest zones, and the city’s temples, markets, malls and nightspots have remained open. The elevated rail system, known as the Sky Train, as well as the subway and river taxis have increased capacity to cope with demand from commuters and tourists.
Bookings to Thai destinations including Chiang Mai in the north, and beach resorts including Koh Samui and Phuket have helped offset a decline in demand in Bangkok, said Bill Heinecke, whose Minor International Pcl has 18 hotels in the country, including Bangkok’s St Regis and Four Seasons and the Anantara group of resorts.
“Of course our hotels have been affected, but Thailand as a whole still continues to welcome visitors from across the globe,” Heinecke said Jan. 23 by e-mail. “Today’s traveler is very resilient as economic challenges, political difficulties and natural disasters happen all over the world.”
Still, with tourists from China, Taiwan and Hong Kong making up almost a quarter of all arrivals to Bangkok’s two international airports, salvaging the city’s traditional tourist high season will be a challenge, according to a group that represents the nation’s travel agents.
“The second quarter and the third quarter are the low season, so the next chance for Thailand to boost tourists is the fourth quarter,” said Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents.
Ryan Ruan, a 28-year-old bank employee in the central Chinese city of Wuhan, canceled his late-January trip to Phuket and Bangkok. ‘After all I’m bringing my fiancee with me — the instability in Thailand makes me worried,’ Ruan said. Instead they are going to Hong Kong.
With assistance from Supunnabul Suwannakij and Chris Blake in Bangkok, Sharon Chen and Shamim Adam in Singapore, Rachel Butt in Hong Kong, Bonnie Cao in Shanghai and Penny Peng in Beijing. Editors: Tony Jordan, Rosalind Mathieson. To contact the reporters on this story: Anuchit Nguyen in Bangkok at [email protected]; Suttinee Yuvejwattana in Bangkok at [email protected] To contact the editors responsible for this story: Rosalind Mathieson at [email protected]; Tony Jordan at [email protected]
Photo credit: Thai protesters block poll stations in Bangkok. Associated Press