Flood cuts tourism budget

Thailand cuts budgets across the board to help fund flood recovery that has brought the country’s economy almost to its knees.

The Ministry of Tourism and Sports reports a budget cut of 3.75% in the fiscal year 2012.

Commenting on the cut, the ministry’s tourism department director general, Supol Sripan, told TTR Weekly that all ministry budgets were slashed to divert funds to tackle floods.

“Our budget was cut 3.75% to Bt6,754 million compared to Bt7,017 million in the last fiscal year.”

Mr Supol added: “ In the Tourism Department alone, the budget has been slashed 17.65% to Bt1,292 million for the  2012 fiscal year from Bt1,569 million in 2011 budget.”

The department also confirmed that the proposed budget for the “Miracle Thailand Year” campaign of around Bt700 to Bt800 million has been cut to Bt289 million.

The ministry permanent secretary, Suwat Sidthilaw, said the ministry would propose that Prime Minister Yingluck Shinawatra lead the campaign to restore foreign tourist confidence and lift the country’s image once floods recede.

“Thailand needs to regain tourists’ confidence immediately, especially in sensitive markets such as China and Japan,” he said.

“We think confidence will recover if the PM gives them a guarantee that Thailand has many tourist destinations that are safe to visit.

“We want to see PM Yingluck talk to governments and the private sector in these sensitive markets to tell them that Suvarnabhumi Airport is fully operational and not flooded.”

The country is dealing with an unprecedented natural disaster that threatens the economy, but travel executives remain confident that once the floods recede, tourism will revive quickly.

But they warn the government should not be complacent. It needs to demonstrate it can deliver a long-term water management plan for the capital and surrounding provinces or the country could face a similar crisis in the future.

Part of the recovery programme will demand a heavy investment  to restore cultural sites seriously damaged by the floods. The Ministry of Tourism estimates it will need Bt4 billion to restore tourism sites and rebuild infrastructure. Over 160 tourism sites in 21 provinces, excluding Bangkok, have been damaged by floods, They have a net worth of Bt380 million.

If the floods recede this month, Thailand will lose 220,000 visits representing a drop of Bt8.5 billion in revenue. If floods remain through December, the country will lose 300,000 tourists and Bt12 billion in revenue.

The Cabinet on 18 October approved an increase in a deficit budget for the fiscal year 2012 by Bt50 billion, raising the overall deficit to Bt400 billion from an initial Bt350 billion.

At Bt400 billion, the deficit accounts for 3.4% of gross domestic product.

In the 2012 fiscal year, the government estimates that its expenditure will reach Bt2.38 trillion, against revenue of Bt1.98 trillion. Of that amount, Bt1.85 trillion or 78% covers standard expenses and another Bt420 billion or 17.8% is for investment.

All ministries agreed to reduce their annual budgets by Bt48,859.8 million.

TAT needs to cut its budgets by at least 10%, while the Thailand Conventions and Exhibition Bureau said its annual budget was slashed by 23%.

Earlier, the ministry estimated the country would welcome 19.5 million tourists arrivals this year and earn Bt700,000 million.

In 2010, there were 15.9 million international visitors contributing Bt590,000 million in tourism-related revenue.

Even after considering the worst-case scenario, officials believe the 2011 performance will improve on what was a disastrous 2010. Red shirt demonstrations and street battles with the army almost wiped out Thailand’s tourism in 2010.

Thailand tourism has reeled from one crisis to the next since 2008 when yellow shirt protestors closed Bangkok’s two airports during the December peak season.

Red shirt protestors wrecked an ASEAN summit in Pattaya and ran amok in bloody riots in Bangkok during March 2009.

Source - ttrweekly