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REUTERS, BANGKOK- Thailand's political turmoil is threatening its lucrative tourist industry as travelers cancel trips and foreign governments issue travel warnings, while business leaders fear foreign investors will be scared off. South Korea and Singapore told citizens on Tuesday to avoid non-essential travel, while Australia and Taiwan advised nationals to be vigilant after Thailand's prime minister imposed emergency rule.
"It's getting worse. Nobody will enjoy traveling with the state of emergency in place," Maiyarat Peerayanakoses, president of the Association of Domestic Travel, told Reuters.
"Not only foreigners, Thai people also want to stay in a safe place," she said, adding that 90 percent of domestic tours had been cancelled in recent weeks due to the political unrest.
Prime Minister Samak Sundaravej gave the army control of public order on Tuesday after a man died in overnight clashes between pro- and anti-government protesters.
Apichart Sankary, president of the Association of Thai Travel Agents, was worried tourists would turn away from the "Land of Smiles" during the high travel season starting in October.
"Tour bookings from foreign tourists, mainly from Europe, for the high season have already dropped more than 10 percent from the same period a year ago," Apichart said.
"The large number of Chinese tourists we had expected to come after the Olympics are not showing up. If the turmoil drags beyond this month, our industry will be badly hit," he said.
National carrier Thai Airways, already struggling with high fuel costs, said passengers, particularly from other Asian countries, were cancelling fights. Some 10 percent of bookings had been cancelled in the past two days.
"If the unrest is prolonged, tourists definitely won't come," Thai Airways President Apinan Sumanaseni told Reuters.
Protesters blockaded the airport on the resort island of Phuket from Friday to Sunday, stranding thousands of tourists.
TARGETS
The Tourism Authority of Thailand (TAT) said it was keeping its arrival targets for now.
"We expect a political impact but we need to wait and see how big it will be," TAT official Jutaporn Reungronasa said.
The TAT expects 600 billion baht ($17.40 billion) from 15.5 million foreign tourists this year, up from 14.46 million last year.
Tourism brings in the equivalent of 6 percent of gross domestic product and accounts for almost 11 percent of the economy, making it a significant driver of growth.
Home to some of Asia's premier beaches and resorts, Thailand has remained a top tourist draw despite the SARS epidemic, the Indian Ocean tsunami, bird flu and a military coup in 2006.
Foreign investors, especially new investors, are bound to be alarmed by the uncertainty.
"A state of emergency is just the contrary of stability and predictability and a lot of uncertainty is around," said Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, which represents 10,000 foreign companies.
"For new investors who have to make a decision whether to invest in Thailand or one of the competing economies, a state of emergency declaration will be for sure a big hurdle to convince them that Thailand is stable and worthwhile to invest in," he said.
But he doubted that emergency rule would lead to the relocation of existing investments to other countries.
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