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23 Nov 2007

Tourism

Loy Krathong Spectaculars: Reviving Tourism at Year-End(Current Issue No.2004)

Thai tourism business has been lackluster since the end of 2006 in light of a series of bombings in Bangkok on December 31st of last year. Other downsides dampened the growth of Thailand's inbound tourism this year, as well. In particular, East Asian tourist arrivals – that account for over half of Thailand's total inbound tourists – have dropped. Evidently, tourist arrivals from the East Asian region (where the top five markets have been Malaysia, Japan, South Korea, China and Singapore – together accounting for 52 percent of the East Asian tourist arrivals) during the first half of 2007 has recorded a contraction of 4 percent, over-year. Meanwhile, the number of foreign tourists from other regions saw an increase, except for American arrivals that dropped one percent, year-on-year.

As a result, tourist arrivals to Thailand during the first half of 2007 totaled 6.95 millions, a year-on-year rise of 3.3 percent.

During the latter half of this year, tourism in Thailand will gradually pick up thanks to numerous favorable factors, e.g., a clearer political situation after the general elections that are scheduled for December 23, 2007. There will also be a grand celebration jointly staged by the private and public sectors to commemorate the auspicious occasion of the King's 80th Birthday on December 5, 2007, as another plus to the year-end tourism agenda. Events include:

- A Royal Barge procession as part of the Royal Krathin Ceremony along the river at Wat Arun (the ‘Temple of the Dawn') on December 5th.

- The huge fireworks display to honor His Majesty the King entitled, ;Krirkfa Kongpatapi Sadudee Maharaja” (‘The Earth and the Sky honoring His Majesty the King') presented through December 4-8, 2007.

Moreover, TAT has joined with state agencies and entrepreneurs in the tourism business to organize activities to stimulate tourist volume in all parts of Thailand during this year-end high season (November-December), two highlights of which will of course be the Loy Kratong Festival and the upcoming New Year festivities. These affairs will all be aimed at boosting the tourism market that has fallen into sluggishness for most of the year.

Apart from Bangkok, where extensive Loy Krathong celebrations have been organized throughout the city with the key site being the Chao Phraya River, there are also other important tourism venues that have also been staging fascinating Loy Krathong events over many years. Their fame has spread to abroad and attracts throngs of foreign tourists each year, especially to the events being held at Sukhothai, Chiang Mai, Tak, Phra Nakhon Si Ayutthaya and Hat Yai.

Although Loy Krathong is a good opportunity for many tourism-related businesses, the present unfavorable economic atmosphere amid rapidly increasing oil prices has deteriorated the overall purchasing power of Thai consumers and resulted in most Thai tourists having to become more frugal. Therefore, the market for foreign tourists with high purchasing power has become the key target for tourism businesses during Loy Krathong, this year.

Nevertheless, in 1H07, many favorable factors indicate that better days are ahead for Thai tourism. One evident indicator is the growth to be seen in foreign tourist arrivals during November and December, receiving a major boost from European tourists, as Europe is a major tourism market for Thailand that exhibits a decided preference for our seaside resorts along the Andaman coast (Phuket, Krabi and Phang Nga). It is expected that the number of tourists visiting Phuket and Krabi in 2007 will be higher than in 2004 (before the Tsunami Disaster). However, we feel that Phang Nga – which was the most severely damaged locale – needs more time for recovery.

As it were, the foreign tourist market, which expanded slightly in 3Q07,should show outstanding growth in the final quarter of this year. It is expected that there will be around 7.2 million foreign tourists having visited Thailand during 2H07.

KResearch forecasts that there will be 14.2 million foreign tourists traveling to Thailand over the entirety of 2007, rising 3 percent over-year and generating tourism income for Thailand of around THB500 Billion, rising 10 percent over 2006.

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