Bangkok’s famous Khao San Road may still be filled with tourists buying beer and cheap shirts, but the reality is that business owners across Thailand are struggling as tourism drops to all-time lows, reports Patrick Tombola.

Despite Thailand being one of the wealthiest countries in South East Asia, poverty displays itself in the form of begging along the streets of Bangkok. Image: Patrick Tombola

According to the Tourism Authority of Thailand during the last week of May, while red shirt demonstrators torched shopping malls in Bangkok, the number of arrivals at the capital’s Suvarnabhumi International Airport decreased by as much as 13,000 people per day. In 2008, political unrest caused a drop of 20 per cent compared to the year before.

John, a Scottish expatriate owner of a bar in the northern city of Chiang Mai says intakes have decreased by as much as 30 to 40 per cent since June 2009. He admits that only his Thai wife and their child is stopping him from following the long list of people that have packed up and set up camp in more profitable destinations like Bali.

“[During the unrest] insurance companies in the UK refused to insure people if they went to Thailand, so many decided for Malaysia or Bali,” he says.

“The BBC and the Australian government have all these travel warnings and it hurts, it really does.”

According to Dawn, his business partner, three main factors have contributed in creating the perfect storm for tourism operators.

“Things are going down because of the Thai Baht being so strong, the world economy not doing so well but especially the political situation in Bangkok,” she says.

PHOTO GALLERY – Click to enlarge

Mai, owner of a cafe in Pai shakes her head when asked about her business this year.

“Maybe 40, even 50 per cent, less than last year. The road was full of people [last year], now all cafes are empty”.

While on the surface Mai does not seem too concerned about the current situation, an understanding of Thai etiquette, which requires understated behavior, suggests otherwise.

Amongst South-East Asian countries, Thailand is the most heavily dependent on tourism, which accounts for about six per cent of the country’s Gross Domestic Product. However, for the tropical islands in the south and cities like Chiang Mai, which are more reliant on tourism, the number is most certainly higher.

The Thai Government seems to have taken notice with the Tourism Authority having recently presented a ‘tourism recovery strategy’ to stem the fast bleeding out of tourists. Initiatives aimed at reviving the domestic travel market, which proved crucial for the post Asian crisis recovery will be implemented over the coming months along with festivals and regional fairs.

Additionally, the Authority will tap into the new marketing strategies that adopt social media like Facebook and Twitter in order to promote the image of Thailand as a safe tourist destination.

Other tourist destinations in the region such as Bali have benefited from Thailand’s recent downturn.

Tourism to the small Indonesian island grew almost 19 per cent between January and March compared to 2009, according to the Bali Tourism Board.

However, not all business owners are blaming the recent political clashes for the downturn.

Paul Moorhouse is a property developer in Phuket and a member of the British Business Association. He has been living in Thailand for the last 20 years and says Thailand’s recent troubles have little to do with the clashes in the capital but rather is still recovering from the global financial crisis.

He says, “The red shirt drama didn’t affect the island of Phuket. In some ways, [Phuket] is seen as a separate economy.

“The main reason most business owners are saying it’s quiet is due to the world situation and the strength of the Thai baht prior to that. The biggest issues we are facing is that people aren’t making significant purchases when currency exchange rates are so strong.”

“We used to have a lot of European buyers on the island. But it’s no longer in their best interest to buy at the moment because the baht is so strong. In comparison, the Australian dollar has improved against the baht by almost 20 per cent and that has effectively made the spending power 20 per cent higher. My last three buyers were all from Australia,” he says.

It is still too early to determine with precision the reasons behind the dramatic drop in tourism to Thailand.

However, while the global economy is set to recover and the currency to weaken over the coming year, doubts regarding the long-term political stability of the country are still leaving many sleepless in the “land of smiles”.

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