Bangkok bombs cast shadow over Thai tourism

Sun-soaked beaches
After SARS, the Indian Ocean tsunami and bird flu in the last few years, Thailand’s tourism industry, which attracts 12 million visitors a year and accounts for 6 percent of gross domestic product, was hoping for a golden year.

But tour operators said foreign travel warnings would make it difficult to hit the growth target of 10-12 percent for 2007.

“Advisories of various countries to avoid Thailand are quite damaging as tour groups that ignore them do not get safety insurance coverage,” said Apichart Sangka-aree of the Association of Thai Travel Agents, which speaks for 350 firms.

The full extent of the impact would only become clear on Wednesday when tour operators reopened after the New Year break, he said, although if the blasts turned out to be a one off, the fallout would not be disastrous.

Economists said an expected loss of revenue in an industry that raked in $13 billion in 2006 -- the fourth biggest foreign exchange earner after electronics, electrical appliances and cars -- could lead to annual growth at the bottom end of forecasts.

Coming so soon after the central bank’s disastrous imposition of capital controls in a bid to stem the baht’s rise against the dollar, the effect could be even greater.

“The economy is getting a double-hit in less than a month,” Somphob Manarangsan of Bangkok’s Chulalongkorn University said.

Singapore-based analyst Leslie Khoo of Forecast Pte, who cut GDP growth forecasts for 2007 to 4.0 percent after the capital controls were introduced in December, said the blasts and political instability only made the outlook less rosy.

“The bombings just increase the probability of the 4 percent growth forecast,” he said. 

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