Thailand’s Tourism Sector in Crisis

November was not a good month for Thailand. Legions of protesters took over two commercial airports in the capital Bangkok for 8 days practically shutting them down. The world …

November was not a good month for Thailand. Legions of protesters took over two commercial airports in the capital Bangkok for 8 days practically shutting them down. The world was treated to images of trapped tourists venting their frustration while protesters steadfastly tried to get their message across to anyone who would listen.

Ultimately, the protesters got what they wanted: The Thai Constitutional Court broke up the ruling party and prohibited the then prime minister, Somchai Wongsawat, from participating in politics. The protesters went their way pleased with the results only to wake up to the long-term economic damage the blockade has brought.

Winter is supposed to be the high tourist season in Thailand when visitors from all over, but especially from the colder parts of the world, descend on the country in search of sunshine and warmth. However, the blockade chaos resulted in a huge number of tourists canceling already scheduled trips and many who may have otherwise gone to Thailand choosing different destinations. The country has been depressingly empty and the hospitality industry is beginning to panic.

Tourism officials expect the numbers to be worse than after the tsunami in 2004, according to the Associated Press.  Airlines and hotels are advertising deep discounts to attract visitors. Government economic predictions are grim, with a 1 percent contraction in the first quarter and zero growth in the second. There are fears that the severe slowdown in tourism, which makes up about 6.5 percent of Thailand’s GDP, coupled with the global economic slowdown may push the country into recession.

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The number of tourists is expected to decrease by some 2.5 million over the next six months, costing Thailand’s economy about $3 billion. In an effort to mitigate these losses, the Tourism Authority of Thailand is planning a series of actions to restore the tarnished image of the country. It has collected email addresses of visitors that were stuck in the country during the airport blockade to send out an apology, according to the Associated Press. It has also asked airlines to reduce fares and is coming out with a revamped advertisement campaign: "Amazing Thailand, Amazing Value."

While tourism is undoubtedly one of the hardest hit sectors, but any industries that are highly dependant on functioning airports to do business are also suffering. The country’s electronics, car, flower and fruit industries all registered severe losses because of the blockade, according to the Washington Post. Standard and Poor’s and Fitch have already lowered Thailand’s economic outlook in response to the political turmoil.

Thai Real estate

The real estate sector hasn’t escaped the effects of the country’s political instability either. Hotels that generally have solid occupancy rates during the high season are now faced with bleak numbers.
Recently released statistics from, a hotel comparison search engine, showed that hotel reservation requests through its website dropped by more than 50 percent initially and leveled off at about 30 percent below the volume before the airport protests. "It is clear that the political instability in Thailand is negatively influencing travelers’ decision making with prospective travelers seeking substitute travel plans,” said the company in a statement released on its website. The result is a huge loss of hotel revenue in a high tourist season. "This coupled with the global financial turmoil which may well put the Thailand travel industry into crisis mode." 

Looking ahead

"The current political uncertainties will not help attract investment into Thailand’s real estate. Growth in Thailand real estate market will depend on continued strength of the tourism industry, along with government initiatives to encourage investment," according to Asia Property Consultants. 

However, most analysts choose to remain optimistic. After all, Thailand has managed to bounce back from the tsunami and earlier political crises. Others, on the opposite side, warn not to take the country’s good fortunes thus far for granted.


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