Tourism sector wary of impact

On Tuesday, the baht closed slightly below 29 to the US dollar for the first time. Some say the evidence is clear that inbound tourism will start to feel a direct impact from the situation. Foreign visitors will have to pay more for their tour packages. Also, they will be more careful with their spending as their home currencies buy them fewer baht.
The Tourism Authority of Thailand yesterday said there was no sign yet that the burgeoning baht had hit the industry. So far, the number of foreign tourists is still on the rise. “The stronger baht has not yet led foreign tourists to keep away from Thailand. In fact, it is only one part of their decision. Thailand is still a tourism destination in the region, remaining popular as a place with value for money,” the TAT said.
Yuthachai Soonthronrattanavate, president of the Association of Domestic Travel, said some local tour operators had been hit slightly because they earn income in US dollars. Coupled with the rise in the minimum wage to Bt300 a day, small or medium-sized enterprises could go out of business if they cannot manage currency fluctuations.
He also worried that the baht’s appreciation would lead Thais to travel overseas increasingly to take advantage of cheaper tour packages. If that happens, the domestic tourism industry will suffer. He thinks the exchange rate suitable for business is Bt30 against the dollar.
Piyaman Tejapaibul, president of the Tourism Council of Thailand, said the organisation would take a closer look at the situation. In general, advance hotel bookings are quoted in baht. So far, the industry has not felt any negative impact.
Piyaman, who also runs a hotel at Cha-am Beach in Phetchaburi province, said the tourism outlook had been positive so far. Its good performance is attributed to an influx of Asian tourists from such places as China and South Korea, as well as Russians.
The baht’s appreciation has not yet hurt travellers’ sentiment, especially Asians. The bigger problem for Thailand is that it has to prepare facilities to serve a rising number of foreign tourists while also looking for ways to reduce congestion in major tourism destinations.
Supawan Tanormkieatipume, chairman for marketing at the Thai Hotels Association, believes that tourism operators can survive the currency movement. The stronger baht will cause Thailand to lose some competitiveness over regional rivals, but “the higher prices fuelled by the baht’s appreciation are not a major factor in foreign tourists making the decision whether to come here”.
She is most worried about a possible epidemic of bird flu in China. Its impact would be far worse than the baht’s appreciation if it spreads outside that nation.