BANGKOK–Thailand’s lucrative tourism sector may stagnate this year if the latest round of anti-government protests turns more violent or drags on beyond the first quarter, say state and private agencies.
Already the unrest is having an impact on an industry that accounts for as much as 7%, or $24 billion, of national output. Since protests heated up in November, visitor arrivals have waned and hotel occupancy dropped as foreign tourists seeking to avoid the turmoil have put off planned trips.
More than 45 foreign governments have issued travel advisories warning their citizens to exercise caution when visiting the Land of Smiles, Thailand’s famed moniker.
After the government called for a 60-day state of emergency starting Wednesday in response to escalating protests, Hong Kong raised its alert to the highest level, telling citizens to avoid all travel to Thailand. The U.S. and Australia instructed citizens to avoid protest sites and large gatherings following a series of violent attacks on demonstrators.
The Tourism Council of Thailand estimates that the country will lose some 22.5 billion baht ($681 million) during the first three months of the year if the situation does not improve.
Since the start of 2014, the number of foreign arrivals at Bangkok’s two airports has dropped 5% from the same time last year, the council said.
Tourism Targets Down
Tourism Minister Somsak Pureesrisak said on Thursday that the state-run tourism authority had revised down its 2014 tourist arrival target by 5%, to 26.7 million, “the same level estimated for 2013.”
The latest round of political conflict escalated on Jan. 13, when protesters seeking to pressure Prime Minister Yingluck Shinawatra to resign and leave office began occupying major streets and intersections across Bangkok. The protests have choked off important commercial centers in the capital, hurting businesses in those areas and stirring up violence.
Over the past week, several violent attacks took place during protest marches. Around 60 people were injured and one killed following a pair of small grenade blasts.
The protests have escalated as the country moves closer to an election called for by Ms. Yingluck, who is seeking to reestablish her mandate, but deeply opposed by her opponents, who are rallying to derail them.
The government says it implemented the emergency decree to secure order. The measure gives officials the power to censor media, impose curfews and ban political gatherings of more than five people, among other things.
It has come at a most inopportune time for Thai tourism, however. October to January is considered high season for tourism, and many businesses have been counting on the arrival of large groups of Chinese travelers during next week’s Lunar New Year holidays.
Tourists Losing Confidence in Thailand
“More foreign tourists have become hesitant and are losing confidence in Thailand,” said Piyaman Tejapaibul, president of the tourism council.
That’s already leading to a slowdown in advance travel bookings for the second quarter, she said.
Hotels across the Thai capital, particularly high-end ones located near the main rally sites, say they’ve seen occupancy plunge in recent weeks.
“Many of our guests left or checked out early because of the noise, because it was impossible to sleep here,” said Zaki Baz, general manager at the five-star Continent Hotel in central Bangkok. He said the noise from raucous protests and fears about more violence have resulted in a slew of cancellations.
Occupancy, which averages 80-90% this time of year, has dropped by half in the past week, said Mr. Baz.