Thai tourism steadies, readies itself for bounce-back
Wednesday 9, June 2010
Two weeks after a sense of calm and normalcy replaced political tensions on the streets of Bangkok, the Thai travel and tourism industry is pursuing a measured renewal of Asia’s most vigorous tourist market.
While the Red Shirt protests dimmed Thailand’s otherwise longstanding appeal in recent weeks, the challenge for the Thai tourist industry going forward is to help travelers distinguish between the perceived threat and the actual threat.
“When you compare the actual risks of traveling to Thailand today, and compare them to traveling in countries where tourism is routinely affected by violent religious extremism (Bali, Israel), or countries where crime against tourists is somewhat routine in urban centers (South Africa, United States), there really isn’t a comparison at all,” said Mark Siegel, CEO of Bangkok-based tour operator Golfasian Co. Ltd.
The U.S., Britain and other countries have all eased their warnings against travel to Thailand after the political protests in Bangkok came to close. On June 3, the United States canceled the May 27 travel warning for Thailand "due to improvements in safety and security conditions throughout the country." Australia had downgraded its travel advisory, which covered the entirety of Thailand, on May 29. As the Sydney Morning Herald reported in a June 5 story from Phuket: “The Australian government’s travel warnings to the whole of Thailand seemed overkill at best.”
“The divisions in Thai society are real, but they are political and internal and restricted to Thai citizens,” Siegel added. “Tourists were certainly inconvenienced by the difficulties in April and May, but they were never endangered.”
This perspective, Siegel and others admit, may be lost on a critical mass of prospective travelers. “Protest in Thailand is very compartmentalized, and very contained, but that impression is difficult to convey when headlines suggest the worst. And the headlines from May are still with some travelers.”
May’s demonstrations caused losses estimated at 60 to 70 billion Thai baht ($1.9 billion to $2.2 billion USD) in tourism-related revenues, according to Atthachai Burakamkovit, permanent secretary of the Tourism and Sports Ministry. Already, the government has earmarked 5 billion baht ($154 million) to help tourism-related businesses affected by the turmoil and rioting. The package now awaits the Cabinet's approval.
Stakeholders throughout the country are now examining a slew of strategies on how to best communicate the facts and salve the country’s wounded image. Private sector associations are busy with government-backed financial assistance measures, including low-interest loans to small- and medium-sized enterprises affected directly by the conflict.
More controversial has been deep discounting already undertaken by some hotels, which has caused divisions within the tourism sector. Royal Orchid Holidays, the tour division at Thai Airways International, has asked its hotel partners to provide promotional deals to speed up the country’s recovery - a move vocally criticized by the Thai chapter of the Pan Asian Tourism Association (PATA).
“Putting Thai tourism product suppliers under revenue management and cash flow stress does not help Thailand's tourism industry,” said chapter chairman Albert Van Walbeek. “It will only create more post-crisis challenges for tourism organizations that have already suffered low occupancy and demand due to the political crisis over the last eight weeks or so. Thailand already provides services at a much lower rate than most Asian countries. It is arguably the best value destination in Asia now- without price cutting.”
Thailand’s golf sector, which organized last year under a marketing cooperative called “Golf in a Kingdom: The Thai Golf Experience”, fought this same battle during the summer of 2009, when the worldwide economic downturn prompted some courses to cut prices. The anti-price cutting faction won the day, a price war was avoided, and rounds (and revenues) ultimately recovered, according to Siegel.
“Cash incentives to stimulate travel aren’t the answer,” Siegel said. “Thai golf holidays, Thai holidays in general, are already affordable. We need to emphasize that not only is it safe travel here, but it was safe even at the height of the crisis in May.”
While the industry flirts with proposals to drop room rates by 50 percent, PATA’s Van Walbeek preaches caution, arguing it might take up to four years to achieve the same average room rate as 2009/10.
Thailand has indeed established itself over the last three decades as the most popular golfing destination in Asia, including Australia and New Zealand. Golf aside, the country’s beaches, climate and first-world infrastructure are the envy of the region; Thailand’s famously welcoming, Buddhist culture, never colonized by a Western power, was the icing on the cake.
Approximately 63% of Thailand’s 14 million tourists in 2008 were repeat visitors and this loyalty factor was a major reason why, in the past, the country’s tourism sector could ride out economic and political storms more successfully than other countries that essentially compete for these same tourists. This loyalty was sorely tested during May, and will continue to be tested throughout 2010, according to Santi Chudintra, director of the Americas Market Division at the Tourism Authority of Thailand (TAT).
Chudintra was encouraged by one set of numbers released by TAT on June 1. International passengers arriving at Bangkok’s Suvarnabhumi International Airport fell by an average of 20% compared to arrivals in May 2009. However, the number of international passengers arriving at Phuket International Airport, the country’s only other international airport, rose by 61.15% during May 2010, the height of the demonstrations.
“I think this shows pretty clearly a strong desire to work around the inconvenience, and an understanding of how isolated the troubles in Bangkok actually were,” Chudinatra said.
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