Tourism and the Political Crisis
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Tourism and the Political Crisis


Tourism has been hit hard by Thailand’s political crisis, which has seen the prime minister removed from office, a state of emergency imposed and lifted, key airports shut down by demonstrators and tenacious anti-government protesters occupying the grounds of the prime minister’s office for three weeks.

Parliament’s scheduled selection of a new prime minister Wednesday seems unlikely to put an end to tensions, as the protest alliance has already rejected the choice of Somchai Wongsawat, who currently holds the job in a caretaker capacity.

Many fear a prolonged crisis could further weaken the tourism sector, which brought in roughly $16 billion in revenue last year, about 6.5 percent of Thailand’s gross domestic product.

Governments overseas have issued warnings about traveling to Thailand. Hotel occupancy has fallen by 40 percent, according to the Thai Hotels Association. International arrivals are down 30 percent from this time last year, said the Association of Thai Travel Agents.

Thai Airways is flying with 20 percent fewer passengers than the same period last year, company officials said. The Mandarin Oriental Bangkok, the city’s most famous hotel, has vacancy rates around 50 percent, the manager told reporters.

A weak global economy was already expected to take a chunk out of tourism. The political chaos, which has left one dead and dozens injured, has only made things worse.

“We’re worried, of course, but what can we do?” said Apichart Sankary of the Association of Thai Travel Agents. “We have had crises before … but this is the first time it’s been really bad.”

A&F Tour, a travel agency in Bangkok, has had three groups cancel their trips for November, costing the company nearly $12,000.

“We’re a small company so that’s a lot,” said Franz Dobersberger, the managing director.

If the chaos drags into the key holiday season, the Tourism Authority of Thailand fears the number of tourists this year will fall nearly 8 percent to 14 million. The group has been holding weekly “crisis management meetings” with trade leaders since last month.

While the protests have been mostly limited to the prime minister’s compound and nearby areas in the capital, Bangkok, the ramifications have been felt elsewhere in the country.

Protesters briefly shut down airports in the popular southern beach resorts of Phuket and Krabi, and threatened action at the capital’s main international airport, but never followed through.

The caretaker government is well aware of how badly the unrest has hurt tourism.

Acting Prime Minister Somchai lifted a state of emergency Sunday, 12 days after it was imposed, to “bring back the smile to the country once again, as we are called ‘The Land of Smiles.'”

“We have to restore outsiders’ confidence, especially tourists, that we are a peaceful country and have no more conflict,” he said.

Prakit Chinamourphong, president of the Thai Hotels Association, ticked off other blows the industry has weathered: the downturn after the Sept. 11 attacks, the SARS epidemic in 2003, the tsunami in 2004.

“We have never had business as bad as it now,” he said.

BP: My point of this post is that some seem to believe that the state of emergency was the problem and things would all be rosy after it was lifted. Case in point:

University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Centre director Thanawat Palavichai said he expected the Stock Exchange of Thailand (SET) will react positively to the lifting of the decree.

He said that confidence in tourism and investment would be restored and boosted to a normal level following the end of the decree.

BP: Travel advice for most countries is largely unchanged – see here, here, and here. When protesters can seize of airports and go unpunished delaying travel plans and leaving tourists stranded, as per the typical news story blurb, this has a much greater impact than a state of emergency. It is also the current political crisis and the uncertainity on what might happen which has a greater affect.