The protracted domestic political instability that flared up into violence in late 2008, and the most recent riots during the Songkran holiday, would potentially set our tourism industry back four or five years. Back in 2004-2005, Thailand's tourism was catastrophically affected by the Tsunami crisis, eventually earning only around THB380 billion in tourism-related income. KASIKORN RESEARCH CENTER (KResearch) forecasts that tourist arrivals to Thailand in 2009 may experience a worse deterioration due to the political unrest that may cost the country some THB50-THB100 billion in revenue lost versus prior estimates.
v If the political discord is resolved soon, Thailand may lose THB50 billion in tourism income:
If the political strife ends soon, and there are no further outbreaks of violence from protesters over the remainder of this year, KResearch forecasts that tourist arrivals during 1H09 may decline only 20 percent YoY, before experiencing an improvement in 2H09 – equal to a decrease of only 4 percent YoY. This would put tourist arrivals over the full-year at some 12.7 million, a decrease of 13 percent YoY, thus generating around THB430 billion in tourism revenue for the country, down by 17 percent YoY.
Our projection made before Songkran riots showed that tourist arrivals to Thailand might drop by 1.3 million (from 14 million earlier projected), which would cost the country around THB50 billion in lost revenue from the previous projection of THB480 billion to be earned in 2009.
v If the violence is prolonged: Thailand may lose tourism income around THB100 billion.
If the conflict from Thai political polarization intensifies and leads to further violence during the remainder of 2009, it would affect Thailand's image of peacefulness and safety so drastically that tourist confidence toward personal safety would be hard to recover within a short period of time. Therefore, it is possible that Thailand will lose more of our foreign tourist market share to rival countries in the region. In this case, KResearch expects that in 1H09, foreign tourists traveling to Thailand will fall 25 percent YoY, and contract 12 percent during 2H09. Therefore, throughout 2009, foreign tourists traveling to Thailand would total around 11.7 million, down almost 20 percent from 2008, generating tourism income to around THB380 billion – a 27 percent contraction. The number of tourists and income earned from them would thus be close to the figures for 2004-2005.
Our projection made before Songkran riots showed that, in this case, foreign tourists traveling to Thailand would fall more than 2 million (from the prior forecast of 14 million), which would cost the country around THB100 billion in lost revenue from the THB480 billion as earlier forecast.