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31 Jan, 2012

Thai Professor Alerts Travel Industry to Impact of Attack on Iran

Imtiaz Muqbil & Don Ross

BANGKOK – A prominent Thai economics professor has alerted the Thai tourism industry to the impact of an Israeli attack on Iran, including high oil prices and the dangers of a wider conflict.

Addressing the joint annual meeting of the Thai Hotels Association and Association of Thai Travel Agents on Jan 30, Assoc.Prof. Somchai Pakapaswiwat PhD., who also advises the Thai government via the National Economic and Social Development Board (NESDB), analysed how an Iran attack would pan out, including the possibility of expanding into a wider war involving the United States, China and Saudi Arabia.

It is the first time that the Thai tourism industry has been directly told to be prepared for the business impact of a potentially catastrophic geopolitical crisis. It also answered in advance the question posed by the Pacific Asia Travel Association (PATA) in the marketing pitch for an upcoming series of seminars: “Are you ready for the next crisis?”

A lengthy article, “Will Israel Attack Iran,” was published in last week’s New York Times. The author — Ronen Bergman, a political analyst with the Israeli newspaper Yedioth Ahronoth — concluded: “After speaking to many senior Israeli leaders and chiefs of the military and the intelligence, I have come to believe that Israel will indeed strike Iran in 2012.”

The NYT article came under fire in a critical commentary by writer Peter Symonds on the website countercurrents.org. He wrote: “By recklessly escalating the economic embargo and military threats against Iran, the US, Israel and the European powers are heightening the danger of a slide into war that has the potential to engulf the region and to spread internationally.”

Speaking at the Thai tourism forum, Prof Somchai made his comment within the broader context of three other problems affecting the industry — the after-effects of the recent flooding crisis, travel advisories issued by a number of countries following the arrest of a terrorist suspect and the Eurozone economic downturn.

According to THA statistics, business in Bangkok was badly hit by the floods, although Phuket benefited by dint of diverted business. The discounting that became inevitable as part of the tourism recovery effort has pulled down the average room rates of Bangkok hotels to the lowest in the region’s capital cities.

The professor’s remarks dashed hopes that this would be a crisis-free year. They moved this looming geopolitical catastrophe out of the TV screens to the front-door of the Thai travel industry.

The topic of Prof Somchai’s talk was “An Analysis of Global and Thai Economics in 2012”. Without making any judgment calls, Prof Somchai discussed the implications of a closure of the Straits of Hormuz and the impact high oil prices would have on the global economy, leaving it for the tour operators and hoteliers to consider the damage it would have on their businesses.

Asked later to comment, THA and ATTA executives both voiced appreciation for the professor’s frank remarks. Asked if the industry should mount a preventive protest against what would be a clearly man-made and still avoidable crisis, a THA official said, “What can we do? It’s out of our hands. Of course, we hope that they will not do anything that will create more trouble for all of us.”

That response underscored the inability of the industry to deploy its strength and resources even to save its own skin. Industry executives have maintained their traditional living-in-denial attitude, viz., to worry about a crisis after it has occurred.

Coincidentally, on Jan 30 afternoon, right after the THA-ATTA event, PATA organised an industry forum under theme: “Navigating the Headwinds.” However, there was no discussion of serious “headwinds” such as another Gulf conflict or the Eurozone economic crisis.

Most of the discussion focussed on doing-business issues such as the European air passenger duty. Several of the speakers were more acquainted with Mekong region tourism issues and focussed on their areas of expertise.

Serious “headwinds” are to be handled by the PATA webinars which, according to the marketing pitch, will tackle topics such as crisis management, social media, sustainability, and cross-cultural training.

PATA CEO Martin J Craigs said: “Seismic shocks in the shape of earthquakes, floods, tsunamis, bombs, political uprisings, and diseases do great harm to the travel industry. With due diligence, organizations and destinations can take practical steps to be prepared, minimize impacts and speed the bounce back. PATA’s crisis management webinars will give you insights, procedures and checklists to deal with crises much more effectively.”

All participants will receive a copy of PATA’s “Bounce Back” crisis management booklet.

According to the announcement, key presenters of the first webinar, “Risk Mitigation and Crisis Management in Tourism 101” are Mr Bert van Walbeek (“the master of disaster”), Managing Director, The Winning Edge, and Chairman, PATA Thailand Chapter, and acclaimed tourism crisis management author, Mr David Beirman, Senior Lecturer, University of Technology, Sydney.

Mr Beirman was quoted as saying: “When we in the travel industry deal with crisis, it has to be appreciated that crises can result from actual loss and damage to business and reputation and perceptual loss and damage to business or reputation. The PATA webinars are designed to help tourism industry professionals manage both.”

Mr van Walbeek was quoted as saying: “Many destinations have suffered not only from the immediate personal and economic impact from crisis, but also from the ongoing and residual damage which makes it even harder to restore confidence in the destination as a safe, desirable place to visit.”

“The webinars will offer many practical tips and ideas on how you can reduce risk, be better prepared for critical scenarios, and — most importantly — bounce back quickly,” the announcement says.

In essence, the webinars will dispense treatment to help the industry recover from a sickness, not to prevent the sickness in the first place.

However, Prof Somchai’s remarks will put pressure on local, regional and international travel organisations to shift focus on pre-crisis preventive strategies rather than post-crisis convalescence and recuperation. Having been alerted in advance, ignoring the warnings will leave them open to strong accountability questions should the man-made crisis lead to major losses in terms of income and jobs.

In an age of the Arab spring, the “occupy movement” and explosion of global demand for democratic rights, doing nothing to prevent crises is rapidly fading as a strategy option.