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16 Jun 2006

Tourism

Biting into Tourism from Europe ... Thailand Losing THB2 Billion

The 2006 World Cup, hosted by Germany between June 9 and July 9, 2006, is dealing a blow to Thailand's inbound tourism. Most foreign tourists who are also football enthusiasts have already put off their overseas travel plans to watch the greatest football tournament on earth in their home countries, while others may even travel to Germany to attend their favorite matches right at the pitches.

Among those inbound tourist markets that are most likely to be affected by the 2006 World Cup is Europe. Normally, Thailand receives fewer European tourists during this period already, regarded as the low season for their tourism, who nevertheless account for around half of the arrivals during the peak in January.

However, during this great 30-day long sporting event, European tourist arrivals to Thailand are expected to drop substantially from the same period of last year, when the number of travelers from Europe neared 180,000 persons.

KASIKORN RESEARCH CENTER (KResearch) estimates that European tourist arrivals will likely total some 140,000 arrivals, down by 22 percent, or around 40,000 persons, year-on-year. Of this, more than half would be tourists from Thailand's key markets in Europe, i.e., Britain, Germany and France.

The falling number of European tourists will likely cause Thai tourism related businesses to lose income of around THB2 billion during the World Cup, and much of this amount, around THB580 million, approximately 29 percent, will be lost to accommodation businesses, i.e., hotels and resorts, due to a falling number of European tourists arriving this year compared to the same period of last year.

However, most hotels and resorts whose incomes are expected to drop have actively organized special promotions to welcome the World Cup tournament to boost income from other sources, i.e., food and beverages in restaurants and other entertainment venues within the hotels to substitute for the forecast fall in income from accommodation.

This situation has resulted in the average occupancy rate of hotels and resorts in tourist venues across the country to remain around 45 percent, similar to the same period of last year while Thai tourism was still plagued by the tsunami crisis.

However, the 320 or so hotels in Bangkok with rooms totaling more than 60,000 are expected to have higher average occupancy rates than hotels in other parts of Thailand because the major market for hotels in Bangkok is business travelers, who are not likely to vary in number due to the World Cup as will be group tours and MICE visitors, which are the key markets of hotels and resorts upcountry. Moreover, luxury hotels in Bangkok have also benefited from His Majesty the King's Diamond Jubilee celebration where twenty-five royals and their accompanying entourages had traveled to Bangkok to join the royal ceremony, June 12-13, 2006, not to mention the large contingent of foreign press who came to Thailand to report on the event to the entire world.

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