Tourist Arrivals Plummet in Thailand Amid Credit Crunch

BANGKOK ~ Sitting outside his Thai kickboxing equipment shop in Bangkok, Soombut Yinglap says he has a plan for coping with the global financial downturn – eat less and hope the tourists eventually arrive.

“Now there are not many tourists. Before in the high season it would be full,” he said, gesturing to the nearly empty pavement where vendors try to sell holiday-makers everything from fake DVDs to knuckle dusters.

“I cannot do anything, just wait and see. Eat little, spend little – try and save some money,” the 37-year-old said outside his shop selling shorts, shin pads and headguards in the downtown Nana district.

Up the road at Boss Avenue tailor shop, 28-year-old Peter Geri says his store will cope by marketing cheaper fabrics.

Fewer tourists in need of a new suit are coming through his doors this year, a slowdown he blames on “the business crash down all around the world.”

Thailand’s high season has just begun and runs to February, but the signs for one of Southeast Asia’s top tourism destinations are worrying.

Rising fuel costs pushed international arrivals at Bangkok’s main airport down to about 600,000 in August – a 33-percent drop from a year earlier after a jump of 5.5 percent in July, Ministry of Tourism figures show.

In September, arrivals were down 21 percent, and industry experts say numbers are expected to remain low as the global credit crunch prompts consumers worried about their jobs and mortgages to stay at home.

“We will probably have a very bad high season,” said Oliver Martin of industry body the Pacific Asia Travel Association (PATA).

“You’re going to have it across the board. It’s going to be everyone – from the luxury resort right down to a small tour operator, a mom-and-pop shop or a restaurant,” he added.

Thailand is suffering from what Martin calls a “double whammy,” as bloody anti-government street protests in Bangkok also make the news worldwide, worrying potential holiday-makers.

Adding to the woes, a territorial dispute with Cambodia erupted into a deadly firefight in October affecting border arrivals, while a separatist bomb attack injured 74 people near Thailand’s frontier with Malaysia.

Kongkirt Hiranyakit, chairman of government body the Tourism Council of Thailand, warned that the perfect storm of factors could lead to the loss of up to 70,000 tourism industry jobs.

An estimated one million people work in the tourism business and around 700,000 in small and medium enterprises, he said, adding: “The current crisis could hit around 10 percent of those or around 60,000 to 70,000 people.”

Although the Tourism Authority of Thailand (TAT) has been trying to lure luxury travellers, seen as more immune to global downturns, one of the problems with that strategy is that the kingdom still relies on mass-market package tourists, Martin said.

“This is your middle-income and middle-class market and this is very much the market that’s been affected by their mortgages, potential jobs losses,” he said.

PATA had forecast Thai tourist growth at four to five percent this year. The first nine months of the year were on track, but now the group is expecting growth to fall to about two or three percent.

Tourism businesses will also be lowering prices to lure thrifty holidaymakers, which may keep numbers steady but impact profit.

From the small stallholders at Nana to the five-star resorts stringing Thailand’s beaches, businesses are finding ways to cope.

Debbie Dionysius, marketing director at Laguna Phuket, a resort complex on the southern holiday isle, said they had seen a 12-percent slowdown in revenue so far in the last quarter of 2008 compared to last year.

To counter falling numbers from long-haul destinations such as Europe and the United States, the company is looking to the Middle East and China.

“The economies of these regions have not experienced the same impact from the downturn as western economies, and potentially serve as more positive markets,” she said.

The TAT, meanwhile, is trying to entice tourists from Southeast Asian markets like Singapore and Malaysia, which have so far managed to avoid any serious impact from the financial woes.

“Thailand is generally better suited to weather this kind of storm. Because the economy is so dependent on tourism they were very relatively quick to react,” said Martin.

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