Thursday, November 27, 2008

Thailand's tourism industry foresees mass layoffs by first quarter

Thailand's hospitality industry will see massive layoffs in the first quarter of next year due to the political crisis. The closures of Suvarnabhumi Airport on Tuesday and Don Mueang the following day have already wiped away the meeting, incentive, convention and exhibition (Mice) business with estimated losses of 11 billion baht.

The move will exacerbate unemployment, which was expected to worsen next year in any case. The jobless rate in the industrial sector has been forecast at up to 1.3 million or around 12% due to the global recession.

Natawut Amornvivat, the president of Thailand Convention and Exhibition Bureau (TCEB), said the political impasse had prompted the bureau to revise its Mice revenue target from 77 billion baht to 52 billion this year, with estimated delegates cut to 636,000 from 947,000.The airport closures would cause damages up to 200 billion baht to the tourism industry, according to operators.

In the fourth quarter, arrivals of Mice delegates would fall by 68% to 58,000. The crisis has also affected 31 events scheduled for this quarter, he said.

Six events were cancelled yesterday including the seventh CNBC Asia Business Leaders Awards, the 2008 IOF World Congress on Osteoporosis, Taiwan's Hotai Group and India's Epson Group.

Three meetings were postponed indefinitely: the ninth Asia Groups 2 meeting 2008, Japan's Amway Group and Yum International Foods.

Mr Natawut said the TCEB had tried best to provide Mice participants with the best convenience and safety. ''Some of them understand the current situation but others are very concerned and wanted to leave Thailand.''

He said 200 VIP guests and thousands of others were stranded yesterday. For guests wanting to leave Thailand, the bureau would provide transport to other international airports such as Phuket and Chiang Mai for departure.

Apichart Sankary, the Thai Travel Agents Association president, urged the government and the People's Alliance for Democracy to end the turmoil and seek solutions in the short term. They could be the dissolution of the House or the resignation of the prime minister.

He said that when the airports in Krabi, Phuket and Surat Thani were closed and a state of emergency proclaimed earlier this year, the association hoped the growth in the first half would help entrepreneurs keep their workers until the second quarter of next year.

''But if the political problems and airport closures are prolonged, the impact on the industry would be substantial and layoffs are possible in the first quarter of next year,'' he said.

There are around 4,000 travel operators, both inbound and outbound, with 200,000 employees, excluding those in the hotel sector. Currently, some companies have no business activity at all.

Mr Apichart said that if layoffs were inevitable, ripple effects would be felt across several industries since tourism creates millions of jobs in related fields.

Fortunately, chartered flights from many countries to Phuket and Krabi are still continuing to arrive.

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