The fallout of the Suvarnabhumi airport blockade
on Thailand's tourism industry

By Jon Fernquest

As the blockade of Suvarnabhumi airport dragged on it was silently exacting an economic toll on Thailand's economy. 

The effect on Thailand's sizeable tourism sector is now beginning to be felt.

Ranked 18th in the world in terms of arrivals, Thailand is one the highest ranked emerging market tourist destinations (See rankings).

Now arrivals are down and employees in the tourism industry are losing their jobs. How long will it take for Thailand to recover this lost business? Columnist Imtiaz Muqbil surveys the situation (Photo on right shows Suvarnabhumi airport in more peaceful days)


Travel MONITOR

Downsizing starts in earnest

IMTIAZ MUQBIL
Monday December 15, 2008

The Thai tourism industry has begun to downsize big-time as visitor arrivals plunge in the aftermath of the Bangkok airport closures. Even as promotional packages are rolled out to entice visitors, staff, operations and marketing budgets are beginning to feel the cost-cutting knife.

Hotels are being most affected. Staff are being asked to take unpaid leave. Underperforming staff are being laid off entirely, as well as temporary staff and those who did not pass probation.


Outsourcing and advertising contracts are being pared back. Participation in trade shows and roadshows is also set to be cut back, unless the government can help subsidise them.

In-house training programmes are being stepped up and some industry executives are taking advantage of the downturn to start lecturing at local universities.

Many tour operators, which carry a much lower staff burden, are asking staff to take pay cuts in order to avoid retrenchment.


The Tourism Council of Thailand (TCT), the umbrella grouping of various industry associations, is to meet tomorrow at the Centara Grand to assess the damage, finalise recovery programmes and set up more permanent crisis management systems, said the TCT secretary-general, Phornthip Addie Samerton.

Opas Netrumpai, secretary-general of the Thailand Incentive and Convention Association, said that restoring confidence in Thai tourism was now even more important than getting the numbers up again.

He said the fallout from the airport closures and continuing domestic political issues would certainly hurt the industry but the situation would be made worse by the impact of the continuing international financial crisis. Both are expected to have a long and drawn-out impact on Thai tourism well into 2009.


Mr Opas said the situation had been complicated by the judicial decision to disband three political parties, which had led to the immediate departure of Weerasak Kohsurat as the Sports and Tourism minister and affected decision-making.

However, he praised the ministry's permanent secretary for stepping in and ensuring that all the government efforts to help stranded visitors were expedited without getting tripped up by legal or budgetary minutiae.

"We were sorry to see the minister go," said Mr Opas. "I'm not interested in his party affiliation. But he was doing a good job in terms of getting things moving in the travel industry."


Mr Opas said the last of the more than 300,000 stranded passengers only left Thailand on Dec 9. He noted that there would be a big impact on the lucrative Mice (meeting, incentive, convention and exhibition) sector, especially with the cancellation of the Asean summit in Chiang Mai.

The Tourism Authority of Thailand last week issued two statements to the travel trade and individual visitors to calm tempers and stress that thousands of individual staff had done their best to help under some very difficult and totally unpredictable situations.

Tour operators pointed out that Thailand's geographical location had helped as many travellers were able to get in and out of Thailand by using the road links with neighbouring Phnom Penh, Vientiane, Penang and Kuala Lumpur.


Meanwhile, in another development, the UN Economic and Social Commission for Asia-Pacific (UN Escap) is preparing to shut down its tourism unit in January. The unit is attached to the Transport Division. Ryuji Yamakawa, who has headed it for the past 20 years, is to retire.

The closure is part of the major restructuring at Escap being carried out by executive secretary Noeleen Heyzer, who reportedly could not see how tourism fitted in with the wider objectives and activities of Escap.

Vain efforts were made to convince her that tourism, as a major job creator and foreign-exchange earner, was better placed than any other industry sector to simultaneously contribute to the UN Millennium Development Goals: alleviate poverty, create jobs for women, protect the environment and narrow the urban-rural economic divide.


Although it kept a very low profile, the Tourism Unit played a historic role in many projects that have today become mainstream.

It was the first in the Asia Pacific to initiate studies on measuring the economic impact of tourism. In the 1990s, after peace returned to the former battlefields of Indochina, it worked with the Asian Development Bank and the Pacific Asia Travel Association (Pata) to develop the framework for tourism promotion in the Greater Mekong Subregion.

Recently, it had begun focussing on meetings to enhance the role of tourism in poverty alleviation, develop tourism along the Asian Highway and improve accessibility for the physically challenged.

The unit began to lose importance and influence after the Japanese government, one of its major donors in the early days, cut back on funding.

The only remaining UN-related tourism grouping will now be the UN World Tourism Organisation (UNWTO) which is based in Madrid but has an Asia-Pacific office in Japan.


Imtiaz Muqbil is executive editor of Travel Impact Newswire, an e-mailed feature and analysis service focusing on the Asia-Pacific travel industry.

(Source: Bangkok Post, business, 15-12-08,  Downsizing starts in earnest, IMTIAZ MUQBIL, link)

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