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9 May 2014

Tourism

Hat Yai 2014 Inbound Tourism could Lose THB0.9-1.8 Billion from Bombings (Current Issue No. 2497 Full Ed.)

Aside from being a major city in southern Thailand, “Hat Yai” is also the top tourist attraction for ASEAN tourists there, especially those from Malaysia. Malaysian tourists total about 75 percent of the foreign arrivals into Hat Yai, followed by Singaporean and Indonesian travelers. Already renowned as a shopping paradise crammed with nightlife entertainment, the city has also been promoted as a destination for the surrounding natural scenery, which is another reason why Hat Yai never ceases to be a popular tourist town.
Over the first four months of 2014, Hat Yai saw a constant rise in foreign tourist arrivals over 2013, bolstered by activities organized to promote the Songkran Festival, not to mention being free from political demonstrations, prompting many tourist arrivals during the Thai New Year holiday. However, growth has been at a slow pace owing to the fact that Thailand is now receiving fewer foreign vacationers overall.
Unfortunately, two bombings there on May 6, 2014, have caused foreign visitors to be concerned toward public safety. KResearch has evaluated the impact of that incident on foreign tourist arrivals into Hat Yai, viewing that this disaster will probably have a short-term psychological effect, on the condition that no other major violence takes place again.
KResearch has arrived at two assumptions on this:
  • Case 1: If the turmoil settles within 2Q14, Hat Yai will probably lose THB900 million from its tourism revenues for the year. In such case, it would not take long for foreign vacationers to regain confidence toward it, provided that relevant parties take action and no further incidents occur.
Hat Yai inbound tourist market would then likely improve and recover strongly during 3Q14 and through to the yearend. We project that total tourist arrivals for 2014 would be 1.2 million, inching up minimally 0.4 percent YoY. Total revenues would be around THB11.1 billion, thus a 5.7 percent gain YoY.
  • Case 2: If the turbulence settles by 3Q14, the city's tourism revenue will likely lose some THB1.8 billion. In this circumstance, it is expected that foreign holidaymakers would begin to rebound late in 3Q14. KResearch then estimates around 1.1 million foreign arrivals into Hat Yai in 2014, dipping (-)7.9 percent YoY. Total tourism revenues might then be THB10.2 billion, sliding (-)2.9 percent YoY.
We expect the effect of the bombing incidents to be limited because some tourists may simply change their destinations to other nearby resort towns such as Krabi, Phangnga, Phuket, Surat Thani or Satun.

In summary, all relevant parties – government agencies, private businesses, media and the public in the area – should collaborate toward making sure that the highest security measures are in place for public safety, and be stringently enforced to lower any losses that could be inflicted to tourism in Hat Yai.

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