Bangkok Dangerous

Thailand's violent political turmoil to slam economy, already reeling from global slump

MALCOLM FOSTER, AP Business Writer - 4:05 AM PDT, April 13, 2009
BANGKOK (AP) —


The violent showdown between protesters and security forces in Thailand's capital will slam the country's tourism industry, dealing another blow to an economy already bruised by the global slowdown, business leaders and officials said Monday.

With Bangkok, the capital, under a state of emergency and thousands of anti-government protesters roaming its streets, Australia, China, France, Britain, South Korea, and the U.S. warned citizens in Thailand to stay indoors or cautioned against traveling to the country.

Major shopping malls in central Bangkok were closed Monday as soldiers at various points around the city advanced on red-shirted protesters loyal to ousted premier Thaksin Shinawatra, firing weapons into the air.

The turmoil, combined with the fallout from the airport shutdown late last year, will likely slash tourism revenue by a third from 2008 — or 200 billion baht ($5.6 billion) — as foreigners shun the country, said Kongkrit Hiranyakit, chairman of the Tourism Council of Thailand.

That could lead to 200,000 jobs lost at hotels and other travel businesses, he said. All told, Thailand's tourism industry directly employs about 2 million people.

"This is very serious," Kongkrit said. "I've never seen anything like this."

The upheaval is the latest blow to Thailand's economy and international reputation, coming just five months after rival protesters — clad in yellow to symbolize devotion to Thailand's king — occupied Bangkok's two main airports for about a week, stranding tens of thousands of tourists and blocking shipments.

"This is our first time here, so coming into this mess, it's shocking," said Georg Brandmayr, a 29-year-old Austrian who arrived with his girlfriend Sunday. "We saw a burning bus and lots of soldiers with guns."

They were moving to a hotel further away from the chaos, but still planning to travel to the northern city of Chiang Mai and return to Bangkok later this week.

Despite the crackdown, authorities had only partial success in dispersing the protesters, who are demanding the resignation of Prime Minister Abhisit Vejjajiva just four months into his rule. More than 70 people have been injured.

Dozens of Western tourists were seen rushing out of Bangkok hotels with their suitcases Monday morning and piling into taxis to flee.

The turmoil is also likely to give pause to foreign businesses considering building factories or making other investments in the country.

"New industries such as automobile, auto parts, electronic parts, and food may look at other countries," said Santi Vilassakdanont, president of the Federal of Thai Industries. "It's possible that they may change the manufacturing base."

Santi said he was fielding many calls from investors, including from China and Japan, about the government's policies and country's stability and security.

Thailand's export-dependent economy, Southeast Asia's second-largest after Indonesia, is already contracting as demand dries up for autos, electronics and other goods. The World Bank earlier this month projected that Thailand's economy would contract 2.7 percent this year after growing 2.6 percent last year.

Thailand's long-running political crisis intensified over the weekend, when more than 1,000 anti-government protesters stormed a convention center in the beach resort of Pattaya, forcing the abrupt cancellation of a 16-nation Asian summit.

Asian leaders, who were evacuated by helicopter from the venue, are from nations that represent about 60 percent of Thailand's visitors, said Kongkrit.

Already, "there are a lot of cancellations, and those (tourists) in Bangkok want to move to the countryside," said Apichart Sankary, president of the Association of Thai Travel Agents.

Some travelers are heading home early amid concerns that the airport might be closed again, he said.

Apichart called for political reconciliation — and for a nationwide apology from the Thai people to the nations at the Asian summit.

"If we don't have unity, people don't want to come," he said.

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200,000 jobs at risk as tourists cancel bookings - Excerpt From Bangkok Post

By: afp
Published: 14/04/2009 at 04:29 PM

Thailand's battered tourism sector could shed up to 200,000 jobs this year, industry experts warned after the violent street battles in Bangkok triggered mass cancellations.
Apichart Sankary, president of the Association of Thai Travel Agents, said that television images beamed around the world of troops firing volleys of gunfire to disperse protesters had alarmed potential visitors.

"Layoffs are inevitable. We may lose up to 200,000 people this year if the situation is not resolved," he said.

Bewildered tourists in Bangkok said they feared for their safety, while others were irritated that major shopping centres were shuttered as protesters loyal to former premier Thaksin Shinawatra rampaged through the capital.

It was not exactly the "Land of Smiles" many visitors had expected.

Thailand's tourism industry accounts for 5% of gross domestic product and employs two million people, or up to 7% of the country's total workforce.

The industry has already been worn down by the SARS epidemic in 2003, the 2004 Asian tsunami, a 2006 coup and last year's devastating closure of Bangkok's two airports by a separate protest movement.

Continued instability will wreak more havoc on the tourism sector, which is already bruised from the impact of the global economic crisis.

"The question is how far and how long this situation will go on," said Robert McIntosh, a specialist in the hotel sector with property consultancy CB Richard Ellis.

"The declaration of the state of emergency and the issuance of travel advisories by other countries can be very detrimental to international travel," the Singapore-based McIntosh told AFP.

"People will redirect their holidays to places like Bali and Vietnam."

Australia, China, Russia and Hong Kong have joined governments around the world in urging their citizens to avoid or reconsider travelling to Thailand as the protests raged.

Mr Apichart said that 1,000 people booked to travel on a cruise ship from Singapore to Thailand had opted to stay in the city-state.

"Our overseas partners know that Thailand is split... They are scared of what's happening," he told AFP.

Mr McIntosh said that Thailand's tourism sector had shown it was "resilient", but John Koldowski of the Pacific Asia Travel Association said the damage could be long-lasting.

"The longer this uncertainty continues, the more businesses will close and more people will be laid off not just in the travel and tourism industry but across the board," Koldowski told AFP.

The challenge is "how to restore Thailand's image internationally," he said. "It has been battered on many fronts and the impact has been cumulative. That could take some time."

Mr Koldowski said even if the situation settles down, "there will always be the fear that things could boil over again very quickly and people will avoid Thailand because of that".

In its latest report released this month, the World Bank said Thailand's economy is expected to contract 2.7% this year from a growth of 2.6% in 2008.

But it said "significant downside risks remain," including the threat of political instability.