Q+A: Has the Bangkok violence scared away tourists?

By Apornrath Phoonphongphiphat

BANGKOK (BestGrowthStock) – A political rally in the Thai capital descended into violence on Saturday, with 21 people killed in clashes between security forces and protesters, some in crowded tourist areas in Bangkok’s old town.

There has been an immediate effect on tourism, which accounts for 6 percent of the $264 billion economy and directly employs 1.8 million people out of a population of 67 million.

Comparisons with data last year are tricky. Tourism was dealt a blow in April 2009 by that year’s “Songkran riots”, involving the same “red shirt” group. The sector was only just recovering from a blockade of Bangkok’s airports by a rival political group in late 2008.

HAVE TOURISTS BEEN SCARED OFF?

Surapol Sritrakul, president of the Association of Thai Travel Agents (ATTA), said tourism was bound to suffer, especially as the violence came just before the Thai New Year holiday, or Songkran, running from April 13-15.

“We expect this year’s Songkran to be quiet after the clash. My rough estimate is we should be down about 1 million tourists this year … against the Tourism Authority of Thailand’s target of 15.5 million.”

The Tourism Authority of Thailand, a state agency, is sticking to that target, which compares with 14.1 million last year. It said 4.6 million tourists arrived in the first quarter of 2010, up from 3.6 million in the same period last year.

“We expect the protest will have a minimal impact on tourism as the number of arrivals in April is still up 4 percent so far compared to last year,” said Deputy Governor Prakit Piriyakiat.

Prakit Chinamourphong, president of the Thai Hotels Association, said 15.5 million was a tall order.

Reservations at hotels in Bangkok’s upmarket Rachaprasong shopping district, occupied by the protesters for more than a week, have dropped sharply, he said.

Kasian Watanachaopisut, secretary-general of the Thai-Chinese Tourism Alliance Association, said 100 charter flights from China and 10 from Hong Kong to celebrate Songkran had been canceled.

“Last year there were 1-1.2 million Chinese visiting Thailand, but this year we may hope for only 700,000 — if the situation returns to normal quickly.”

Streets near Bangkok’s Khao San Road, a magnet for budget tourists, saw some of the worst violence on Saturday. Media said many tourists checked out quickly on Sunday and around 80 shops were closed.

The Songkran festival, during which Thais and tourists soak each other with water to mark the New Year, has been canceled there.

WHAT ABOUT SHOPS AND HOTELS?

The “red shirts” have occupied a district full of five-star hotels and plush malls since April 3, forcing several top stores to close. Some reopened on Friday only to close again when violence flared in the city on Saturday.

Central World, the second-largest shopping complex in Southeast Asia, has been closed since April 3.

Central Plaza said occupancy its Centara Grand at Central World hotel — in the middle of the mall district occupied by the red shirts — had dropped 30 percent after Asian visitors canceled and seminars and other events were postponed.

Minor International said it had not shut its Four Seasons Hotel and that it had seen no cancellations.

However, even last week, well into the month-long rally but before the violence, the Thai Hotels Association said bookings at hotels around the occupied area stand at just 20-30 percent of capacity. Normally bookings at Songkran are about 60 percent.

HOW HAVE CONFERENCES BEEN AFFECTED?

Central Plaza Hotel says it has lost 4-5 million baht a day since the occupation of the shopping district, the result of canceled bookings for hotel rooms and business events at its hotel at Central World.

Thailand Convention and Exhibition Bureau says the protests had prompted the cancellation of a few business events scheduled for April, with the damage put at about 800 million baht so far.

The operators of the Queen Sirikit National Convention Center, which hosts many major events and seminars, says it has had just one cancellation so far for an event expected to attract around 2,000 visitors.

HOW MUCH WILL IT AFFECT THE ECONOMY?

Before the violence, Finance Minister Korn Chatikavanij said the protests might cause growth to be significantly worse than the ministry’s 4.5 percent forecast.

Kim Eng, Thailand’s biggest broker, is comfortable with its far lower forecast. “We don’t believe the political mess can do much damage to our already low GDP growth forecast of 2-3 percent,” it said in a note on Monday.

Consumer confidence fell in March, depressed by the unrest. The central bank says politics is becoming a bigger factor in deciding whether to raise interest rates.

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(Additional reporting by Saranya Suksomkij, Orathai Sriring, Nopporn Wong-Anan; Writing by Alan Raybould; Editing by Nick Macfie) Keywords: THAILAND TOURISM/

Q+A: Has the Bangkok violence scared away tourists?