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11 Jan 2007

Tourism

Bangkok Bomb Blasts: Costing the City THB8 Billion in Tourism Income(Business Brief No.1924)

Bangkok is the most popular tourist destination in Thailand for international visitors. A survey conducted by the Tourism Authority of Thailand (TAT) has revealed that tourist arrivals to Bangkok in 2005 totaled 12.3 million persons, up 5 percent over the year before, generating THB165.946 billion in tourism revenue, rising by 7 percent over-year.
In 2006, tourist arrivals to Bangkok exhibited steady growth, thanks mainly to the grand celebrations for the 60th Anniversary of His Majesty the King's Accession to the Throne on June 9-13, 2006. The event was broadcast live worldwide and activities related to the royal celebrations were subsequently staged in prime tourist venues all year round.
KASIKORN RESEARCH CENTER (KResearch) estimates that the number of tourists visiting Bangkok may have reached some 13.8 million persons in 2006, a year-on-year increase of 12 percent, thus generating around THB200 billion in tourism revenue for the country, representing a rise of 20 percent over-year.
In 2007, bright prospects seem to lie ahead for the foreign tourist market in Bangkok, which can be attributed to the following factors:
- Bangkok was ranked as the third most attractive tourist destination by Travel and Leisure magazine, a leading international travel magazine.
- This year 2007 is officially designated an auspicious year because of commemorating the 80th Birthday of His Majesty the King, such that many related activities will be launched throughout the year.
- The opening of Suvarnabhumi Airport – the new international Airport of Bangkok, late last year will effectively boost our potential to accommodate international tourist arrivals here.
As far as further estimates go, KResearch expects that visitor arrivals to Bangkok in 2007 will reach some 15.0 million persons, up 9 percent over-year, with tourism-related revenue totaling approximately THB220 billion, rising by 10 percent over the previous year.
Still, the New Year's Eve bombings that killed 3 people and injured 36 others, including two foreign tourists, have prompted the governments of many countries, e.g., the US, Canada, Australia, New Zealand, Britain and Japan to issue alerts to their citizens, advising them to avoid travel to Bangkok if no particular mission warrants it. The tightened security measures imposed around the city have undermined the atmosphere for foreign tourists in the capital of Thailand.
If the government can control and resolve the situation, and return to normalcy soon, KASIKORN RESEARCH CENTER expects that tourism in Thailand will be affected by fewer international tourists only over the short-term, or during the first-quarter of 2007. That situation would affect the tourism of Bangkok directly. The foreign tourist venues that will be affected can be classified into three main groups:
- The originating countries that are expected to be most affected – being quite sensitive toward the situation – are Japan, China, South-Korea and Malaysia.
- The originating countries that are expected to be affected moderately are those that have alerted their citizens against travel here, e.g., the USA, Canada, New Zealand and England.
- The tourist markets that are expected to be least affected will be countries other than the above.
Due to the above reasons, it is expected that foreign tourists visiting Thailand in the first quarter of 2007 will decrease 17 percent from the former estimate (before the bomb blasts), or dropping by some 600,000 tourists. As a result, Bangkok stands to lose foreign tourist revenue of around THB 8 billion totally.
The tourism authorities of both the government and private sectors should communicate a fuller understanding about internal safety by making clear the real situation to foreign tourists. This would increase confidence about the safety of tourists and they would return to Thailand sooner. Moreover, the authorities should apply tourism promotion strategies to expand the growth in tourist arrivals over the remaining three-quarters of 2007. Such strategies could compensate for the reduction in the first-quarter tourist arrivals, perhaps fulfilling previous forecasts. Consequently, this would reinstate tourism revenues of THB 220 billion.
In addition, the government sector should take steps to ensure safety continuously in every community (not only during festivals). Meanwhile, entrepreneurs in related businesses should cooperate with the authorities and other citizens in helping watch over their areas and reporting unusual incidents to the authorities. This would help instill confidence about safety for foreign tourists, as well as aid in ensuring overall peace, law and order for the Thai people.

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