A recent crisis in tourism in Thailand - Essay Example

? A recent crisis in tourism in Thailand A recent crisis in tourism in Thailand College Thailand stood as the second –largest player in the tourism sector in the region and one of the top 30 destinations in the globe both in indirect and direct contributor to GDP and in absolute terms. In 2010, 15.8m foreign tourists visited Thailand. However, the arrival of the foreign tourist sharply declined by 12.9% in May 2010 as contrasted the corresponding period in 2009. In the last two decades, Thailand had witnessed one after another worst crisis. The decline in numbers in 2010 was due to long-run street protests in Bangkok that dispirited the foreign tourists. In the fag end of the year 2011, Thailand met with another crisis – unprecedented flood, which devastated its economy and tourism sector. This research essay will analyse the various crises witnessed by the Thai’s tourism industry and recent havoc flood in 2011 and how it has impacted the tourist industry of Thailand and suggest means to devise suitable strategies to mitigate the future crises from impacting the Thailand’s tourists industry. Introduction Thailand has been regarded as one of the South-East Asia’s largest economies and has been reckoned as one of the regions’ preferred destination for investments. In the background of global economic downturn and political turbulence it witnessed in 2010, the country is slowly recovering on strong phases. While the tourism industry prolongs to contribute a major part of its export revenues and is set for further growth in 2012 as well and there has been a visible increase in its export revenues but in the fag end of the year 2011, Thailand met with another crisis – unprecedented flood, which devastated its economy and tourism sector (Oxford Business Group, 2011, p.2). Tourism has been regarded as one of the largest sectors of the Thailand’s economy and a major foreign-currency earner. For instance, as per the World Tourism and Travel Council (WTTC), in the year 2009 alone, the tourism industry contributed about $ 16bn to Thailand’s GDP, which is 6.5% of its aggregate GDP. Further, tourism industry has offered employment to about 1.86 m people, which symbolised about 5.1% of its aggregate employment. (Oxford Publishing Group, 2009, p.131). This research essay will analyse the various crises witnessed by the Thai’s tourism industry and recent havoc flood in 2011 and how it has impacted the tourist industry of Thailand and suggest means to devise suitable strategies to mitigate the future crises from impacting the Thailand’s tourists industry. Analysis In 2010, 15.8m foreign tourists visited Thailand. However, the arrival of the foreign tourist sharply declined by 12.9% in May 2010 as contrasted the corresponding period in 2009. The decline in numbers in 2010 was due to long-run street protests in Bangkok that dispirited the foreign tourists. As WTTC report 2011, tourism industry directly contributed BT 617.7bn or 5.8% of its economy. (Oxford Publishing Group, 2011). If one look at the above graph, Thailand’s economy had performed since Q4/2008 moderately when compared neighbouring nations like Hong Kong and Singapore but its performance was poor as compared to Philippines, Malaysia and Indonesia. (Jitsuchon & Patanarangsun, 2009, p.2). The number of foreign tourist visited Thailand was at its peak in January 2008 but dipped to very low level in 2009. Despite the fact that the Thailand’s very positive future outlook for long-run growth , both 2008 , 2009 and 2011 were the toughest years for the Thai’s tourism industry due to political turmoil that occurred both in Pattaya and in Bangkok in April 2009 and devastating floods in 2011. (Jitsuchon & Patanarangsun, 2009, p.6). WTTCs benchmark estimations of Thailand’s tourism effect on its economy which has taken account of the wider input of tourism both indirect and direct across all sections. Hence, it is estimated that the tourist industry’s net contribution to Thailand’s GDP will be around14.7% of its aggregate GDP or $37bn thereby an upward increase in the provision of jobs of 4m jobs which would be 11.1% of aggregate of employment and sharing of $5 bn of aggregate of all capital investment and $1 billion of expenditure of Thai government in 2009 alone. In the global level, tourism industry contributes about 3.2% of global GDP, which includes both indirect and direct contribution. Thailand stood as the second –largest player in the tourism sector in the region and one of the top 30 destinations in the globe both in indirect and direct contributor to GDP and in absolute terms. (Oxford Publishing Group, 2009, p.131). (Jitsuchon & Patanarangsun, 2009, p.8). The above table indicates that both restaurant and air and ocean transport contribute the 35% of tourist income of Thailand. As per Vogt and Wittaykorn (1998), tourism remains as the chief export of services for Thailand. According to EIU ViewsWire (2003), Thailand’s gross domestic product (GDP) consists of about 6 to 7 percent tourist income. From the beginning of the 21st century, Thailand has witnessed a chain of crises, which have had a tremendous outcome for many business and individuals in Thailand. The crises that happened during 2008, where new Bangkok Suvarnabhumi International airport was closed for more than a week by Thai opposition parties was specifically detrimental. One another major crisis faced by Thailand tourist industry was the Indian Ocean Tsunami that happened on 26 December 2004 that destabilised its’ tourist economy. Just after the airport closure, during March-May 2010, Thailand witnessed political turmoil, including “Red Shirt” protest (Laws et al, 2011, p.91). As per a tourism journalist (Mugbal, 2010, p.1), in the last five decades, Thailand witnessed more than 30 military coups d'etat that kindled other transformations in governments, image issues, a communist uprising, the economic crash that shook the Thailand in 1997, an over-blown and explosion of the Aids epidemic, environmental issues, a tsunami, airport closure, SARS epidemic, unprecedented flood in 2011 and many other issues that would have long slaughtered any other ordinary nation (Laws et al, 2011, p.92). As per Kontogeorgopoulos (1999), some crises, like Asian economic meltdown and Tsunami, were not internal to Thailand but in retort to it, and to buttress the nation’s competitiveness and to vie with rival tourist spots, Thailand had to take immediate steps to correct it. Responding to the Asian economic meltdown, Thailand had once again introduced the concept “the Amazing Thailand “slogan drive so as to depict the best of its tourism services and products. (Laws et al, 2011, p.92). As per Tourism Authority of Thailand (2009), one another crisis that Thailand faced was the issue of Muslim separatists particularly in the south border that impacted chiefly the Malaysian tourists visiting to Thailand. To redress this issue, the Thailand’s tourism authority has had to engage in briefing for tour operators and for the media in Malaysia. (Laws et al, 2011, p.92). As per Tourism Authority of Thailand (2005) in the case of the outbreak of SARS and the tsunami that occurred in 2004, officials of the Thailand had to communicate with the respective stakeholders both in overseas and in Thailand, mainly to revive the confidence of the tourist in the security and the safety of the nation (Laws et al, 2011, p.92). Crises witnessed by Thai Tourism – Effects and Responses from 2001 -2009 Period Details of the Crisis Impacts Response from the Thai Government 2001-present Economic Crisis For visitors from US, Asia Pacific became more expensive. Escalating inflation International Economic meltdown Fuel Surcharges Financial assistance and stimulation -reduced fees and deposits -Tax Credits 2001- present Eruption of violence in southern provinces Some nations had issued travel advisories caution declaring Thailand as “dangerous” destination for tourists. -Rural poverty to be alleviated -To nourish the potential of tourism -Risk assessments by local TAT 2003 SARS -There was a decline of 8.3% by MICE visitors - There was a decline in revenue by 4.39% and a decline of 8.3% in arrivals. -In marketing and promotion, there was a public –private partnership. - To attract international visitors, pricing measures were introduced. -through hosting of the APEC Conference, travel securities were presented by the Thai government. 2004 Tsunami Tourist revenue declined by 10% immediately after Tsunami i.e. first quarter of 2005 For cultural reasons, many Japanese and Chinese travellers refused to visit Phuket There was decline of 88% of movements of international passengers at Phuket Airport in January 2005 and there was a decline of 44% of domestic passengers. In the first half of the year 2005, there was decline in figures by 65% and 14% respectively. Many relief measures were initiated by Thai government. Rehabilitation initiatives were undertaken. Restoration and rehabilitation of infrastructure facilities in affected areas was carried over on war footing. (Laws et al, 2011, p.93). Despite the fact that the Thailand’s very positive future outlook for long-run growth , both 2008 ,2009 and 2011 were the toughest years for the Thai’s tourism industry due to political turmoil that occurred both in Pattaya and in Bangkok in April 2009 and havoc floods in 2011. As per Tourism Authority of Thailand (TAT) statistics, tourist arrivals fell down by 1.5% in 2008 which is down to 14.2 m, which was well below of the target of 15.7m. (Oxford Business Group, 2009, p.31). Thai government is spending heavily on development of the tourism sector in Thailand. About $77 million is being allocated on enhancing the image of Thailand. About$ 12.2 is being spent on tourism marketing and about $10.7 m is being spent on tourism campaigns. Violence is south Thailand had a great impact on its tourist revenues. As per TAT estimates that there has been a perceptible fall in the tourist visits to the affected provinces in the last few years, ranging to just 758,842 in 2005 from 1.4 million in 2003 and just 685,439 in 2007. Further, there had been a considerable fall in tourist revenue in the South which stood at just BT 1.4m ($42,840) in 2007 from that of BT 4.7 m ($143,820) in 2003. Due to closure of several airports in Thailand, it was estimated that about 300,000 travellers were got struck in Thailand in 2008. (Oxford Business Group, 2009, p.132). Thai government earmarked BT 214m ($6.5m) funds, mainly to support tourist business. Some other concrete steps initiated by Thai government during 2009 to support the tourism industry initiated measures like a three- month waiver on visa fees, reduction in landing charges, a reduction of 50% in charges for the entry to nation’s visitor attractions. (Oxford Business Group, 2009, p.132). One of the main reasons for the turmoil in Thailand’s tourism industry is the global economic downturn which has witnessed the tightening of their belts by the households and reduced their spending on holidays. Both North America and Europe which have been Thailand’s niche tourism market have been worst impacted the international economic crisis. Further, strength of bhat against British pounds and dollar may be upsetting the people to visit Thailand. Inflation in key Asian markets including Thailand has also eroded the spending power of tourist. (Oxford Business Group, 2009, p.132). As per Richter & Waugh (1986,p.238), political stability is regarded to be an essential for preserving and developing a triumphant tourism industry, although , this sector is susceptible to other factors like flood , international terrorism , economic crisis , prevalence of epidemic , tsunami and ethnic violence. As per Hall & O’Sullivan (1996, p.120), the perception of various analysts is that it may be impracticable to detach tourists completely from the impacts of global instability. (Carrier, 2010, p.92). As per Hall & O’Sullivan (1996, p.107), many tourism promotion boards around the world also offer their insight that tourism is very sensitive to crises, and it is popularly viewed that media has a specific role to assist to remove the unjust fears of travellers. In this regard, media has been regarded as being a major power in the creation of images like political stability, safety in the destination provinces. As per Higham (2000, p.133), it is not , nonetheless , direct perils to tourism like crime, terrorism and infectious diseases , that are viewed as a cause for panic , but negative reporting by media is expected to bring much harm to the tourism industry. For instance, during the start of the Asian monetary crisis that engulfed in 1997, Thailand became so nervous about the prospect of its tourism industry, mainly due to adverse publicity by press that it endeavoured to counteract the torrent of bad news by indulging in positive promotion of the nation as a cost-effective tourist destination. Thus, the cost effective publicity promoted by the Thailand at the time of crises is popularly acknowledged as a success story. (Carrier, 2010, p.92). The Recent Flood Crisis that Impacted Thai Tourism Industry As per TAT, the unprecedented flood in Thailand during November and December 2011 has cost the exchequer about $ 500 to 607 million mainly due to loss of tourist revenues. The devastating flood in Thailand had stopped the arrival of about 400000 to 750000 tourist visitors to Thailand. According to TAT, Thai tourism industry witnessed one another worst crisis due to unprecedented flood as foreign travellers have either delayed, cancelled or postponed their visit to Thailand as many countries around the world had issued travel advisory to travel in Thailand, due to flooding of Don Muang airport and the spreading of rumours of occurrence of contagious diseases due to floods. Due to recent havoc floods that haunted Thailand, the quantum of foreign tourist arrival had declined to just 1.2 million from 17.5 million- year –on-year basis. (CNNGO, 2011). Raksakulthai (2003) emphasised the fact that there had been development of a number of coping strategies for dealing with the climate variability by tourism industry in Thailand. One of the strategies is to increase the prices of the services and products to tourists during peak season and closing down the shutters for the monsoon season. This strategy will help to minimise the operational costs so that it is still lucrative to operate with only six-month income. Climate –resistant tourist attractions and other guises of product differentiation are being employed to minimise inequalities in tourist demand between off-seasons and peak seasons. Some of the strategies are cultural and medical tourism, convention centres, entertainment parks, indoor pools, spas, entertainment parks, tennis courts, convention centres, and shopping malls. To ensure the safety of water supply, reservoir capacity has been enhanced. Further, through the introduction of integrated coastal zone management, there has been an enhanced cooperation and coordination among various stakeholders and between the private and public sectors with a focus on safeguarding the natural resources, including sandy beaches, coral reefs, hygienic water supply and clean seas. (Becken & Hay, 2007, p.257). Burkett et al. (2005) recognised some ways to manage unprecedented flood havocs in the future, which would have helped in minimising, but not altogether avoiding, the damage due to havoc floods as happened in the fag end of the year 2011 in Thailand. Some of the strategies recommended are upgrading the drainage systems and levees to survive future devastating floods; planning and maintaining flood safeguard system on the footing of projected and historical rates of local rainfall ,subsidence and sea-level rise; reducing the drain –and-fill activities , to shallow subsurface liquid extractions and other human assistance that would increase the subsidence; to enhance the evacuation routes ; safeguarding and restoring coastal defences ; to support for the construction of flood proofing of premises and infrastructure ; designing flood-probable maps that assimilate local elevations , drainage capabilities and the design of ordinances , improving green belts and other flood-damage minimisation strategies. (Becken & Hay, 2007, p.257). Conclusion In the last two decades, Thailand had witnessed one after another worst crisis. As per Fouchier et al (2000), in 1996, Thailand was impacted due to Asian Financial Crisis, and then its tourism industry was affected by the Bird Flu in 2004 and also by SARS in 2004. Thailand’s tourism industry was also worst affected due to eruption of violence in southern provinces and tsunami in 2004. Again, during 2011, it witnessed a devastating flood which is said have inundated several regions and also Bangkok province, thereby causing both income and property losses aggregating to 1.3 trillion bhat or $420 Billion. As per TAT, the unprecedented flood in Thailand during November and December 2011 has cost the exchequer about $ 500 to 607 million mainly due to loss of tourist revenues. The devastating flood in Thailand had stopped the arrival of about 400000to 750000 tourist visitors to Thailand. The worst past crises that Thailand witnessed including the recent havoc flood emphasises that there should be an improved crisis management planning in existence to lessen damages, to stay away from future crises and the last but not the least, the need to have a strong political willingness from all those who are associated to have a conciliation and ready to reach a consensus at the time of crises. (Barnes, 2009, p.14). References Barnes J. (2009). Restoring Thailand’s Tourism Destination Image in the Wake of The Recent Political Crises: A Few Proposals. Retrieved January 11, 2011, from http://gsbejournal.au.edu/2V/2V.html Becken, S & Hay, JE. (2007). Tourism and Climate Change: Risks and Opportunities. Singapore: Multilingual Masters. Bishvili.elgg.com. (2011). Thailand floods caused economic losses of more than $420. Retrieved January 11, 2011, from Billionhttp://bishvili.elgg.com/pg/pages/view/2629/ Carrier, J G. (2010). Tourism, Power and Culture: Anthropological Insights. New York: Channelview Publications. CNNGO. (2011, November 28). Thailand’s Tourism Industry Set to Lose Billions. Retrieved January 11, 2011, from http://www.cnngo.com/bangkok/visit/thailand-floods-crisis/thailands-tourism-industry-counts-flood-costs-129386 Jitsuchon, S & Patanarangsun, P. (2009). Trade and Tourism Impact of the Global Economic Crisis on Poverty and Vulnerability in Thailand. Retrieved January 11, 2011, from www.adb.org/.../Poverty.../employment-impact-tha-Jitsuchon-paper... Laws, E., Richins, H., Aurusa, E., Scott, N. (Ed.). (2011) Tourist Destination Governance: Practice, Theory and Issues. New York: CABI. Oxford Business Group. (2009). The Report: Thailand 2009. Oxford: Oxford Business Group Publishing. Oxford Business Group. (2011, April 22). Thailand: Tourism Faces Down Obstacles. Retrieved January 11, 2011, from http://www.oxfordbusinessgroup.com/economic_updates/thailand-tourism-faces-down-obstacles Read More