Tourism may need six months

Thailand's tourism sector, hit hard by the red-shirt protests and riots in April and May, may need six months to recover, depending on the success of the government's recovery strategy and the global economy, according to Bandid Nijathaworn, a deputy governor of the Bank of Thailand.

He said statistics showed that it took six months for visitor numbers to return to normal after both the Sars outbreak in 2003 and tsunami in December 2004. The sector also needed seven months to recover after the seizure of Suvarnabhumi and Don Mueang airports by the yellow-shirted People's Alliance for Democracy in late 2008, he added.

However, the tourism revival also would depend on global economic conditions and government policies to stimulate the travel industry and related businesses, said Dr Bandid.

The world economy is expected to continue improving with projections for 3% annual growth this year and next. Locally, the government has announced several measures to help businesses affected by recent unrest.

"If it were only tourism sector [that had been affected], it would not have had a significant effect on the country's economic growth due to its marginal weight to GDP," he said. "But based on the industry and related businesses, the impact would be of more concern."

The private sector generally has not experienced a significant impact from political factors as the unrest was highly localised in central Bangkok.

The Bank of Thailand expects the economic trend in the second half of the year to remain positive, driven by economic and export momentum in the first half, government economic stimulus measures, as well as the slowly improving world economy. The central bank is maintaining its projection for a GDP growth rate of between 4.3% and 5.8% in 2010.

Kosit Panpiemras, executive chairman of Bangkok Bank, said one key to reviving the tourism industry would be the success of government efforts to promote understanding internationally of current conditions in the country.

If the government can create good understanding with other governments, it would improve confidence among both investors and tourists, he said.

Bangkok Bank's corporate customers in the tourism business have been affected by the political turmoil, but it has been offering measures to ease clients' burdens and has been able control distressed debts.

BBL's loan demand for the first five months of the year still showed a positive trend despite sluggish growth during the political uncertainty, and it is keeping a loan growth target at 4-6% for the year, he added.

Sourced=bangkokpost