Board incentives urged from all concerned
Thailand's tourism industry is bracing for a tough time in 2009 as the number of tourist arrivals is expected to drop 10 per cent if the domestic political conflicts continue even as travellers worldwide are tightening their belts amid the global economic slowdown.
The Tourism and Sports Ministry, the Tourism Authority of Thailand, and private business operators have agreed to join hands to launch pro-active measures to draw as many visitors as possible, or many businesses would have to shut down, leaving a million workers jobless.
Chanin Donavanik, chief executive officer of Dusit International, urged hotels and airlines to offer discounts to lure tourists back. He also urged Airports of Thailand, the operator of international airports, to cut fees levied on airlines.
"Despite troubles in the past years, 2009 would be the worst for Thailand. TAT must revise marketing strategies if it wants to achieve the visitor target," he said.
"Looking around, only China and India would be the most promising markets. The situation of all others would be negative due to various factors," he said.
In his view, most European markets will face financial troubles while the US market depends largely on the stimulus package. Japan's economy has shown signs of deterioration, like Russia. Australians may avoid Thailand as their currency has weakened by 30 per cent against the baht this year.
As short-term remedial measures, TAT offices abroad have been instructed to negotiate with travel agencies for the launch of more packages to Thailand. TAT would also attend more international trade shows and increase the frequency of roadshows in potential markets.
As recession eats into many parts of the world, Thailand is not alone to witness a drop in tourism.
In 2009, globally, passenger traffic is expected to decline 3 per cent after growing 2 per cent in 2008, according to the International Air Transport Association. This is the first decline in passenger traffic since the 2.7-per-cent drop in 2001.
Airlines are expected to post combined losses of US$2.5 billion (Bt86.5) and all regions, except the US, are expected to report larger losses in 2009 than in 2008.
Aside from unfavourable factors overseas, tourism operators in Thailand expected the negative impact from the closure of the Suvarnabhumi Airport to linger in the first quarter of next year. The Tourism Council of Thailand estimated that during December and March, about 3 million visitors would keep away. This would bring the total tourist arrivals next year to 12 million, from the 14.2 million target. The new figure shows a flat growth from 2008.
Aside from the 10-day airport shutdown, which left 450,000 foreigners stranded in Thailand, travellers would be more concerned about fluctuation in exchange rates and oil price uncertainties.
"The tourism industry is being affected by many negative issues. All players need to adjust marketing plans by turning their focus to short-haul markets particularly in Asia instead of Europe and other remote markets," said TCT President Kongkrit Hiranyakit.
The TCT expected tourist arrivals to drop 10-15 per cent on year in the first half if no more political conflicts prevail, and an 18-per-cent growth is expected in the latter half. Tourism revenue for the year is estimated at Bt516 billion.
"It's recommended that Prime Minister Abhisit Vejjajiva joins a roadshow to restore tourist confidence. There, he could reveal security measures to prevent the industry from any future turbulence," Kongkrit said.
The TCT also urged the government to allocate a Bt10-billion budget to encourage meetings and conferences, which would boost domestic travelling.
"Only the PM has the power to drive the industry at a difficult time like this. The tourism minister alone cannot ensure smooth cooperation from other government bodies."
Apichart Sankary, president of the Association of Thai Travel Agents, warned without an urgent recovery plan from the government, Thailand would soon be off of tourists' map.
A drop in tourist arrivals even in the high season has already hurt small and medium-sized hotels and tour operators, said Prakit Chinamornpong, president of the Thai Hotels Association. He said these operators urgently needed financial support or a million jobs – employed by tourism operators and those in related industries like spas and restaurants – would be at risk.
To help them, the annual fee of Bt80 per room that hotel owners must pay should be waived or cancelled, while the Thai-Chinese Tourism Alliance Association asked for a waiver of the visa fee for Chinese tourists for six months.
The good news is so far, five-star hotels under construction have proceeded as planned, to complete 3,000 extra rooms next year. During the airport closure and a week after that, some operated with a single digit occupancy rate.
The TCT said the occupancy rate was reportedly 19-per-cent lower than the same period last year in the first week after the airport closure ended. Hotel occupancy rate is 15-per-cent lower than last year. The average 2009 occupancy rate is also expected to drop 15 per cent year on year.
However, if the conditions take a turn for the worse, new investment could be shelved and the tourism industry, which now employs 3 million workers and generates about 6 per cent of gross domestic product, would be at grave risk.
As the tourism sector of many countries has been affected by the declining number of visitors, more proactive campaigns are needed to motivate people to make bookings.
"In this most difficult time there is only one choice to help airlines survive: by offering more packages at low prices. This could motivate them to grab some of the offers," said Tony Fernandes, group chief executive officer of AirAsia.
He said despite the economic crisis and political turmoil, if the prices are attractive, they would consider it.
Another key point to reach customers is networking. The operators must offer passengers more destinations so that they would stay loyal to the airline.
Moreover, easier travelling is also an important factor to achieve the goal. AirAsia always initiates new services as well as marketing tactics such as online check-in, waiving fuel surcharge and uses its own low-cost terminal to avoid chaos, he said.
The AirAsia Group is planning to add four or five long-haul destinations over the next year, set to spread into big cities across the region.
