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
reconsider non-essential travel to the country.
“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.
Tourists walk past beach chairs on Patong beach in Phuket, Thailand.
Tourists walk past beach chairs on Patong beach in Phuket, Thailand. Close
Open
Photographer: Brent Lewin/Bloomberg
Tourists walk past beach chairs on Patong beach in Phuket, Thailand.
“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,
head of research at Asia Plus Securities Pcl. “With sluggish
consumption and investments, a slump in tourism revenue would
further worsen the overall economy.”
Flights Canceled
Thailand’s benchmark SET Index slid 1.4 percent as of 10:13
a.m. local time, headed for its biggest drop since Jan. 15. The
baht has slipped almost 6 percent in the past three months, the
worst performer after the Indonesian rupiah among 11 most-traded
Asian currencies tracked by Bloomberg.
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 (THAI) plans to scrap 25 flights between Hong
Kong and the capital, the carriers said last week.
Advance Bookings
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 10 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.”
‘Exceptionally’ Strong
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.”
The central bank unexpectedly held its key interest rate
last week, even as it cut its economic growth forecasts for 2013
and 2014. The nation’s economic fundamentals are strong enough
to weather “short-term risks,” Governor Prasarn Trairatvorakul
said.
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.
More Resilient
“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 limited to well-defined
protest zones, and the city’s temples, markets, malls and
nightspots remain 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.
Hotel Bookings
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 (MINT) 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 at 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.
To contact the reporters on this story:
Anuchit Nguyen in Bangkok at
anguyen@bloomberg.net;
Suttinee Yuvejwattana in Bangkok at
suttinee1@bloomberg.net
To contact the editors responsible for this story:
Rosalind Mathieson at
rmathieson3@bloomberg.net;
Stephanie Phang at
sphang@bloomberg.net
Thai Tourism Hurt as Protests Dent Lunar New Year Trips: Economy
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