The remarkable resilience of the hospitality industry is facing its sternest challenge yet.
When Thailand's new deputy prime minister overseeing economic and
foreign affairs, Somkid Jatusripitak, delivered his first major public
policy address last week, the news was far from good.
Investigations had so far proven unsuccessful in finding who was behind
the bombing at the Erawan Shrine, and the short-term economic
consequences continue to be felt. More than 20 nations and territories
have issued travel advisories or warnings for their citizens traveling
to Thailand. Hotels, as well as tour operators, are reporting
cancellations.
And now, the latest economic data has Thai exports shrinking for the
seventh consecutive month. Overall exports from Thailand from January to
July are now down 4.66 per cent. In June, the country had the worst
monthly contraction since 2011 - a 7.87 per cent year-on-year decline.
Yet in this nation famously known for looking on the bright side,
Somkid has declared that the economy is merely weak, not in crisis. This
is to be no repeat of the Asian financial crisis of 1997.
Five years since violent street protests and the worst floods to hit
Thailand in 50 years brought about dire predictions for the nation's
tourism industry, the purveyors of economic doom are back. Pessimistic
views compete with images from the nation's longstanding "Amazing
Thailand" tourism promotions.
Worries continue about the impact of the bombing on the all important
inward bound travel market. Chinese travellers now make up about a
quarter of all foreign tourists in Thailand annually, with the Erawan
Shrine and the surrounding shopping district a popular destination. More
than 4 million visitors from China travelled to Thailand in the first
six months of this year alone, and those numbers were expected to
continue to rise.
In the immediate aftermath of the bomb attack, equities related to
tourism, transport and distribution, given Thailand's key role as a
regional logistics hub, were particularly hard hit. The Stock Exchange
of Thailand Index experienced its worst one-day decline in more than a
year. The baht also has fallen to six-year lows to the US dollar.
Responsible for about 10 per cent of Thailand's gross domestic product,
the nation's vital tourism industry had been one of the few economic
bright spots for Southeast Asia's second-largest economy. And yet amid
the gloom and the near-term chill on Thailand's markets, one lesson from
past crises in this Land of Smiles is that the Thai tourism sector will
survive and once again thrive.
CEO Kevin Beauvais of GLOW Hotels & Resorts, with operations in
Thailand and Malaysia and other properties under development in China,
Vietnam and the Maldives, underscores this view.
"Thailand is amazingly resilient and still offers some of the best
tourism values in the world," says Beauvais, who has lived and worked in
Thailand through floods, political turmoil and a succession of
governments. "In spite of Monday's [August 17] incident, Bangkok remains
one of the safest cities in the world," he adds. "People will always
come back for the sun, sand [and] sea."
Bouncing back
Tourism numbers in recent years support this view. Bangkok has
continued along with London to take one of the top two spots in the
MasterCard Global Destination Cities Index for the last five years. That
index ranks 132 destination cities around the world in terms of total
international overnight visitor arrivals and cross-border spending.
Bangkok's draw remained despite some of the worst street violence in Thailand's recent history.
In May 2010, large parts of Bangkok were paralysed by weeks of
anti-government demonstrations. Rioting and violence spread, leading to
the declaration of Bangkok's first night curfew in 15 years.
Thailand's largest shopping complex was set ablaze. A television
station and the stock exchange, among others, were attacked. More than
70 people lost their lives.
Then, as now, dire warnings followed about the nation's tourism industry. Today, a gleaming new and expanded
CentralWorld shopping mall complex has emerged from the embers as one of Bangkok's most visited destinations.
And, just a few months later, in October and November 2010, Thailand
was hit by one of the worst calamities in five decades. Floods killed
hundreds, inundated homes and factories, closed airports and roads, and
stranded tourists and residents across the country. Dire predictions
about the tourism sector also ensued as hotel occupancy rates plummeted
and expenditures by visitors declined.
Few international visitors also may now remember that four years
earlier, on December 31, 2006, during the New Year's countdown, bombings
in Bangkok left at least 40 dead or injured.
So, what lies ahead for Thailand's enduring travel and tourism industry?
Dan Fraser, co-founder of Smiling Albino, a leading luxury adventure
tour company in the Kingdom, says: "Bookings will take a very short-term
hit, like the markets, but will bounce back. Thailand is resilient and
has a history of bouncing back… so we don't expect anything more than a
temporary blip."
Short of a sustained campaign of bombings, which would wreak havoc with
any nation's tourism sector, Thailand will more than recover from the
Erawan Shrine tragedy. That event is unlikely to have a long-lasting
impact on the nation's still lacklustre economy or investor sentiment,
already weighed down by Thailand's continued political uncertainties.
Other major travel destinations have withstood much worse attacks -
including the resort island of Bali, the focus of bombings in 2002 and
2005, and New York in September 2001. The Erawan Shrine has reopened,
vigilance is up, and the nearby Grand Hyatt Erawan Bangkok hotel, which
experienced some minor damage in the Monday explosion, is in full
operation at this time, says Hyatt area vice president and hotel general
manager Gordon Fuller.
With exports continuing to contract, falling consumer sentiment, a
drought-stricken agricultural sector and a persistent political divide,
the resilience of the nation's tourism sector should be among the least
of the worries facing Thailand's newly installed economic team.
Indeed, that so much focus has been placed on the Erawan Shrine
bombing's possible impact on tourism is itself a testament to the
sector's ability to bounce back. It has done so in the past, and will do
so again.
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