To What Extent Does Political Chaos in Bangkok Affects the Tourism in Thailand - Essay Example

How Political Chaos in Bangkok Affect Tourism Thailand Table of Contents 0 Terms of Reference 2 2.0 Procedure 3 3.0 Findings 3 3.1 Political Analysis 4 3.2 Economic Analysis 6 3.3 Social-culture analysis 7 3.4 Technological factors 9 4.0 Conclusion 10 5.0 Recommendations 10 1.0 Terms of Reference The purpose of this report is to ascertain the major factors affecting tourism in Thailand. The report will put more emphasis to the political factors such as the political chaos in Bangkok and their effects on the tourism industry in Thailand. In addition to establishing the extent to which the political chaos in Bangkok affects tourism in Thailand, the report will also cover other social, economic, and technological factors. To accomplish this objective, a PEST analysis of the tourism industry will be conducted. The report will also offer recommendations and solutions to the flaws that will be uncovered after the conduction of the PEST analysis 2.0 Procedure To compile this report, the proponent of this report meticulously conducted a secondary research on the journals related to tourism. In addition, he also made an effort to go through articles written about the political unrest in Bangkok, then related to events to the resultant trends in tourism. 3.0 Findings In the contemporary world, globalisation has had an impact on businesses all over the world. International businesses such as the tourism are the most affected by globalisation. There are many aspects of the dynamic nature to the world that affect international businesses. This is exactly the case when the tourism industry in Thailand is brought into perspective. On this report, the factors that affect the tourism industry in Thailand will be looked into using PEST analysis. PEST Analysis evaluates the Political, Economic, Social-cultural and Technological factors of a business to establish the general environment of the business. A PEST analysis is an evaluation of the external environment of a business to ascertain the factors that have a major impact on the business to help in the management and decision-making of the business.below is a PEST analysis of the tourism industry in Thailand. 3.1 Political Analysis Political factors in a PEST analysis consider the effects of legislative amendments, the constancy of the economy and occurrence of incidences related to the government and political nature of a country. This is because the political climate is very crucial in determining the stability of businesses. Political factors that are likely to major impacts on a business include terrorism, demonstrations/civil unrest, and corruption (Czinkota et al, 2009). Countries usually have law enforcement units to counter political complications such as corruption, terrorism, immigration, and political unrest and if these factors are not looked into, the tourism industry in the country is likely to receive a major blow. For example, the domestic political tension in Thailand has had a detrimental impactimapct on the tourism industry in the country. Political tension is usually mainly caused by the rivalry between two groups by the name yellow-shirt and red –shirt who usually have the Thaiwebsite (2010), reported that the November 2008 yellow-shirt demonstrations which led to the closure of the Suvarnabhumi Airport, led to a massive decrease of the arrival of tourist into the country through that terminus. Around the same time, the red-shirt also conducted a violent demonstration during the East Asia Summit, which was being held in Pattaya. In March that same year, the red-shirt blocked the central junction at the center of Bangkok. The junction connected 3 big department stores as well as other numerous small shops in that and this led to closure businesses at the center of Bangkok. Furthermore, the red-shirt engaged in a fierce combat with the Thai army, where they bombed and fired the department stores. Following these appalling incidences, European and Asian Countries cautioned their citizens not to visit Thailand due to the political instability which Thailand was experiencing (CNNGo, 2010). Consequently, the number of tourists coming into Thailand significantly declined from last year and affected Thai’s economy almost came to a standstill. The tourism industry stopped growing in that period. Figure 1 shows how the demonstrations and unrest by both the yellow-shirt and red –shirt affected the tourism in Thailand in the period between 2007 and 2009 Figure 1 (Source: yawningbread.org, 2009) In the recent past, the political Thailand has been experiencing political unrest, which has caused detrimental effects on tourism. The turbulence in Bangkok does seem that it will abate any time soon. Violent attacks last month at a Bangkok shopping area accentuated mounting fears that the political turmoil might intensify, leading to a further blow to Thailand’s tourism industry and economy in general. The Tourism Authority of Thailand (TAT) cautioned that the fiscal damage that would result from the political turbulence might go up to $2.7 billion over the first two quarters of 2014, especially if the turbulence persists in April and May. This is because the number of foreign tourists arriving in the country could drop by 900,000 if the turbulence persists. TAT reports confirm that it is the Chinese tourists, not Europeans or North Americans, who mostly avoid coming to Thailand when there is political unrest TAT is, however confident that the volume could go back to its forecasted amount during the Songkran Festival in April if anarchistic demonstrations subside. This is because Chinese airlines could reinstate schedules back to pre-protest levels. If the anarchistic demonstrations fail to subside, the TAT warns that Thailand should expect approximately 60 percent less Chinese tourists in 2014 when compared to 2013. Most of the anarchistic demonstrators who have been wrecking havoc on the streets of Bangkok are middle class and upper class citizens, who claim that Yingluck has lost control of her government to her brother who according to them is running the countrys state of affairs. They have wanted Yingluck to resign and be replaced by a “people’s council” which will be appointed to push through electoral reforms. Despite the fact that the anarchistic demonstrators orchestrated a self-styled closure of Bangkok city in February and March, most financial institutions, hotels, conference centers, cafés, and entertainment centers in the city remained open. The same case was applied to tourist attractions centers within and around the city for example the Vimanmek Mansion, Temple of the Emerald Buddha, Siam Paragon, and Grand Palace were all open and accessible to any tourist who may have wanted to visit.Mobility is usually the biggest problem that faces tourists in Thailand whenever political turmoil erupts. 3.2 Economic Analysis Economic factors are major determinants of the success any business. After the occurrence of World War I, the global economy was affected this led to a massive economic crisis. Consequently, all countries businesses all over the world were experiencing predicaments such as the loss of customer confidence, bankruptcy, and high risk in investments. This means that economic factors can cripple and bring down even the biggest of businesses. For example, the 1997 bubble economy was one of the most severe financial predicaments in Thailand. According to Petprasert, (2000) the bubble economy was so severe that it led to the floating of the Baht currency exchange rate. Albeit Thai Government solved this predicament by borrowing from the International Monetary Fund (IMF), scores of domestic businesses declared bankruptcy and global corporations stopped conducting businesses in Thailand because of the country’s unstable currency. The industries that were badly hit by this financial crisis were the export/import industry and the tourism industry because they depended on the exchange rate of Baht currency. Other economic factors that usually affect tourism in Thailand include price of hotels, the price of acquiring a tourist visa and cost of some vacation destinations. The major target groups of the Tourism industry in Thailand can be broken into 3 groups, i.e. the European, Asian and American market. During the global economic crisis, most of the tourists opt to travel only within their continents hence Thailand lost two major markets i.e. the American and the European tourists. The period between 2008 and 2009 recorded one of the lowest numbers of tourists arriving in Thailand. Figure 2 shows the figures that were recorded in that period compared to other periods before and after the global financial crisis 3.3 Social-culture analysis Social factors that affect tourism can be divided into three i.e. dynamic family relations, changing standards of living and health. In this day and age, the improved standards of living are becoming popular. As a result, the tourism industry is supposed to have modern state-of-the-art utilities to attract tourists and make sure they get the best services while staying in their destinations. Such utilities might include organic food, sport activities, a state of the art shopping mall, and a health spa. The tourism industry should also bear in mind that people from different countries have different standards of living. Another thing that should be put in mind is that the environmental factors of a particular region can influence the lifestyle of that region. Failure to consider such factors could lead to can make the country’s tourism industry to suffer dire consequences A good example is the 2004 tsunami. The tsunami has been the worst event ever witnessed by the tourism industry in Thailand for the reason that it led to the demise of a large number of tourists and citizens and the damage of the environs close to the beaches as well as the property such as buildings. Even if the Thai government tried its best to aid those who were affected, a number of tourists are still concerned that history might repeat itself and they would not want to be caught up in such a scenario. Another factor that influences the arrival of tourists in the country is the outbreak of SARS in the Asian continent. Figure 2 shows how tsunami and SARS affected the volume of tourists arriving in Thailand. Figure 2 (Source: Thai website, 2010) 3.4 Technological factors Technology affects the quality of services. In the 21th century, numerous countries, including Thailand have embraced contemporary information technology platforms in a bid to acquire and maintain a competitive stance in the international market. Some of the IT platforms that have been come up with include online booking systems, online shopping platforms, and internet banking, among others (Sadeh et al 2011). The number of tourists that uses internet booking in has augmented significantly. Consequently, the job of travel agents is slowly becoming obsolete. However, the tourism industry in Thailand is yet to fully adopt the contemporary information technology platforms due to lack of support from the government. When compared to European countries, tourism industry in Thailand is much backdated. This makes the tourism industry in Thailand lose out a lot because tourists prefer using new technologies because they are more convenient. 4.0 Conclusion The process of aligning the above factors to produce the best results in the Thailand tourism industry might be a little intricate because some of the factors are very unpredictable. For example, political and environmental tribulations are very hard to predict, let alone control. Political factors should however be scrutinized keenly because they usually influence all the other factors and they have the most detrimental effects on the tourism industry in Thailand. Thailand’s tourism industry has one of the greatest potential in the world. However, this potential can only be tapped into devoid of the factors mentioned above. The government and every other relevant stakeholder should is supposed to become acquainted with these factors, so Thailand can take its lost glory as the greatest tourist destination in Southeast Asia. 5.0 Recommendations As mentioned above, Thailand has one of the greatest tourism potential in the world. However, to be able to tap into this potential, the tourism industry needs an extreme makeover. The most important factor that needs to be looked into is political turbulence because the is the factor disrupts tourism in most occasions and it also has the most detrimental effects. The government should try to make their activities open to the public. It should also try to solve the political issues being aired by protestors without using non-lethal methods because this only leads to more violence. Dialogues should be tried so that the conflicting parties can come up with solutions that will benefit everyone involved and Thailand will reap benefits brought about by peace. Finally, the government and all other concerned parties should embrace new technology to avoid losing tourists to countries that have adopted new technologies. 5.0 References CNNGo. 2010. Outside Bangkok, life goes on, Available at http://www.cnn.com/2010/TRAVEL/05/18/thailand.tourism/ accessed on 4th April 2014. Czinkota, M. and Ronkainen, I. 2009. International Business. Chichester: Wiley (pp. 658.18 CZI). Petprasert, N., 2000, The Crisis of the Thai Economy and the IMF, Reformed World 50. Sadeh, E., L. Mousavi, M. Garkaz, and S. Sadeh, 2011. The structural model of e-service quality, e-customer satisfaction, trust, customer perceived value and e-loyalty. Australian Journal of Basic and Applied Sciences, 5 (3): 532-538. Thaiwebsite, 2010. Thailand Tourism Statistics. Tourist Arrivals 1998-2013. Influence of Political Events, Thailand Floods on Tourist Arrivals. Available at http://www.thaiwebsites.com/tourism.asp accessed on 4th April 2014. Yawningbread.org, 2009. International tourist arrivals at suvarnabhuni airport form January 2007 to May 2009 Available at http://www.yawningbread.org/arch_2009/pic-1051a.gif accessed on 4th April 2014. Read More