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3 Aug, 2009

Thailand At Forefront Of Tourism Slump

As statistics on the tourism industry from all sectors begin to flow in for the first half of 2009, Thailand appears to be at the forefront of the slump, reporting some of the worst industry declines in arrivals and hotel occupancies.

Hotel statistics released last week by Smith Travel Research indicated that Bangkok and Phuket were among the Asia Pacific cities reporting highest declines in occupancies and average room rates in June 2009 over June 2008.

Of the four Asia Pacific markets which reported occupancy decreases of more than 20 percent in that period, Bangkok was ahead with a fall of -31.6 percent to 46.3 percent; Hong Kong (-24.8 percent to 59.7 percent); Phuket (-24.8 percent to 36.4 percent); and Osaka (-21.5 percent to 58.5 percent).

Of the four Asia Pacific markets that experienced RevPAR (Revenue Per Available Room) decreases of more than 35 percent, New Delhi was first (-41.5 percent to US$80.31) but Bangkok came in second (-41.3 percent to US$41.64), followed by Mumbai (-39.3 percent to US$95.12); and Hong Kong (-36.2 percent to US$88.91).

With a few exceptions like Bali, Beirut, Cape Town, Stockholm and Rio de Janeiro, both hub and resort cities worldwide are reporting declines in occupancies and room rates. Popular tourist and business travel cities like Dubai, New York, Vienna, Zurich, Istanbul, Mexico City are among those on the losing side.

Another set of figures on airline passenger movements came from Airports Council International (ACI) which monitors movements of both domestic and international traffic via its member airports. It reported that global traffic in June 2009 was down by 5 percent compared to June 2008, which it called “a clear improvement” over the 8 percent slump in May.

However, figures reported by Airports of Thailand for the first half of 2009 indicated much higher levels of decline.

International aircraft movements in Jan-June 2009 at all international airports in Thailand were down 11.2% to 99,792 and international passenger movements (arrivals, departures and transit) were down 18.23% to 15,635,892. Domestic passenger movements were down 11.49% to 9,941,956 in the same period.

At Bangkok Suvarnabhumi airport, international passenger movements were down 18.16% to 14,385,152 in the same period. At Phuket, the figure was down 11.44% to 1,665,903.

Interestingly, international passenger movements on the low-cost carriers appear to have been less affected. The AoT, which monitors statistics for LCC carriers separately, reports that international passenger movements on LCCs at Suvarnabhumi in totalled 1.70 million in Jan-June 2009, only a marginal decline over the 1.76 million in Jan-June 2008.

International movements on LCCs through Phuket airport were also down marginally from 272,895 in Jan-June 2008 to 271,540 in Jan-June 2009.

The biggest hit on the LCC airlines has been on domestic passenger movements which were down at all airports from 5,285,070 in Jan-June 2008 to 3,469,635 in Jan-June 2009.

Thai Airways international is also reporting declines in passenger numbers and load factors.

In June 2009, the airline carried 1,276,000 passengers, down 17.7% over 1,551,000 in 2008. In Jan-June 2009, total passengers carried fell 14.3% to 8,799,000. Cabin factors in Jan-June 2009 fell 15.3% on Australia routes, 10% on both Asian and European services but increased 7.1% on the North Pacific routes.

Although the jury is still out on the impact of the swine flu, the global travel & tourism industry is already clutching at straws about the prospects for a recovery.

ACI’s Director Economics Andreas Schimm was quoted as saying, “In all six regions, the worldwide traffic growth percentages in June are less negative than the results for the first half of the year, which is a positive sign of improvement and a possible indicator that the beginnings of a more durable turn-around are in the making.”

Just to be on the safe side, he added, “But persistent negative factors, including on-going economic uncertainty, tight financial markets, concerns about a global health threat, and geopolitical disruption in some nations, are likely to restrain the prospects of a rapid rebound.

“In May, airports saw how quickly the H1N1 virus undercut demand with lingering effects in June, and as always the industry remains vigilant yet vulnerable when it comes to external factors that impact our business. As a result, it is unlikely that we will recover the flat growth rate before the fourth quarter of the year.”

One of the interesting trends to emerge from this massive global shift is expected to be a boost in cross-border road travel.

For example, Cambodia which is becoming increasingly connected by road with its neighbours, China, Thailand, Laos and Vietnam, reported total visitor arrivals in Jan-June 2009 at 1,098,236, a minimal decline of 1.1% over the same period of 2008.

While arrivals by air at both Phnom Penh and Siem Reap airports were down 13.3% and 18.4% respectively, arrivals by land were up 18.5%, especially from Laos and Vietnam.

This growth is expected to continue as the Asian Highway system takes shape.

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