11 years later, nation is stronger, but still facing global and local challenges

Extracts from an article by Polya Lesova, MarketWatch

Arriving in this capital city after a long-haul flight from New York can be disorienting, as visitors face frantic traffic surrounding a jumble of modern skyscrapers, busy street markets and ancient Buddhist temples. New York is on the other side of the world, and reminders of this are everywhere: in the traditional Thai wai, the tuk-tuks, the magnificent Buddha sculptures and the countless billboards with the images of the Thai king and queen.

Yet, although Thailand is half a planet away from the epicenter of the current financial crisis, any notions that emerging markets have decoupled from the developed world don’t take long to disintegrate in the tropical heat.

Eleven years ago, Thailand was ground zero for the Asian financial crisis that began with the collapse of its currency, the baht. While the country has dramatically improved its fundamentals, it still faces both internal and external challenges. In addition to ongoing domestic political unrest, it must contend with the effects of the current global financial crisis that originated far away.

Lessons learned during the past crisis have served the country well. Most of the banks here have very little exposure to the toxic collateralized debt obligations and other exotic financial instruments that have been the bane of many venerable Western financial institutions.

“We’re still vulnerable, but I will say that with the current situation, compared with other regional countries, I think Thailand is in a good position,” said Thanawat Patchimkul, executive director of Seamico Securities. “The government is more prudent. I can’t rule out that we won’t feel any trouble, but I think we are safer than 10 years ago, much safer.”

Still, as the global economy slips into a recession next year, Thailand’s export-driven growth will inevitably suffer as well.

Global market turbulence and risk aversion have also hit Thai stocks. Foreign investors have been selling local shares hard — from June through late October, foreigners were net sellers of about $3.2 billion on the Stock Exchange of Thailand.

The benchmark stock index has tumbled 50% this year, and valuations now look incredibly low. But investors aren’t jumping in just yet. Besides the ongoing global crisis, buyers have been put off by what seems to be Thailand’s constant state of political turmoil that began with a military coup in 2006.

Today, Thailand has a floating currency, low interest rates, and relatively high foreign exchange reserves. Thailand currently guarantees all bank deposits, which reinforces the stability of the financial system. The private sector has essentially de-leveraged over the past 10 years and there’s very little reliance on external, offshore funding.

With the global economy projected to fall into a deep recession next year, Thailand’s economy will inevitably suffer. More than 50% of its manufacturing output is exported, and the export-manufacturing sector has been the principle driver of growth.

The Bank of Thailand recently made significant downward revisions to its growth forecasts. The central bank now expects growth next year to be in a range of 3.8% to 5%, down from a previous forecast of 4.3% to 5.8%. Most private analysts expect 2009 growth to be about 4%.

“The challenge is how to make new investors understand the situation in Thailand,” said Atchaka Sibunruang Brimble, secretary general of the Thailand Board of Investment, a government agency that promotes investment in the country. “They look on CNN and they probably expect the whole country to be on fire, but business still goes on as usual,” she said. “It’s only a small part in Bangkok that’s affected. We will have to be more proactive in carrying out road shows to send a message that the political situation is part of the evolution of our political system to become a real democracy in an international sense.”

Indeed, a visit to several cities in Thailand in last October revealed a generally peaceful and safe country. Anti-government protests had been confined to the area near Government House in Bangkok and are by no means widespread throughout the capital. No protesters or civil disturbances were seen outside the capital.

“Everybody knows that the Thai market is very, very cheap,” he said. “It’s hard to find such a good investment story at the moment, but the big question is ‘is it going to perform?’,” Thanawat said.

“After three years you always come up with something unexpected [on the political front], but at this moment the Thais are pretty much getting used to it,” he said. Huebsch of Kim Eng Securities is also cautiously optimistic about Thai stocks. “It’s not easy to say we’ve seen the bottom, but hopefully we have,” he said.

Echoes of Asian crisis reverberate in Thailand

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Source; Bangkok Post

The Tourism Authority of Thailand (TAT) predicts the number of international tourists visiting the country will increase three per cent to 14.49 million this year. [I've read state agency hype in my time, but this statement is certainly the most ludicrous I have ever read. Ed KCI]

Tourist arrivals dropped sharply after the airport closure last December, political instability in the country and a general slowdown of the global economy.

According to TAT Governor Pornsiri Manoharn, the situation scared tourists away. TAT had set the 2008 target at 15.48 million, but only 14.3 million tourists arrived on Thai shores, lower than in 2007 when 14.46 million visited the country.

TAT has since been working hard to lure tourists back to Thailand, starting with a roadshow in China in the first week of January.

This year, she said, TAT would spend 30 million baht on Amazing Thailand roadshows overseas in conjunction with the Department of Export Promotion, the Foreign Ministry and Board of Investment in China, Japan, Russia and the United Arab Emirates, its major markets.

TAT expects around 4,000 tourists from China and another 200,000 Chinese across the globe to visit Thailand during Chinese New Year holidays starting January 26.

It expects 1.05 million Chinese and 1.3 million Japanese tourists to visit the country this year.

Thailand has once again been voted the “Best Value for Money” destination by British holidaymakers, according to the Holiday Costs Barometer of the UK postal service.

The survey compared the cost of products and services purchased in long-haul countries and compared them to those in Europe. It found that Thailand had the lowest cost of living. For example, a cup of coffee cost around 64 baht, a bottle of beer 100 baht, a bottle of mineral water 28 baht, suncream 167 baht and a three-course evening meal with wine 1,393 baht.

According to Andrew Spice of Post Office Travel Services, despite its recent troubles, Thailand remained a great prospect for British holidaymakers. “The Thai baht may have strengthened, but prices remained very low in the country and the discounts now available to top resorts like Phuket and Hua Hin make Thailand an unbeatable value,” he noted.

Thailand’s state agency pines for more tourists

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Source: The Nation

Despite the recent launch of a raft of economic stimulus measures, the private sector yesterday said it wanted to see more government plans focused on restoring the economy.

Leaders of private organisations shared the view that, while the Abhisit Vejjajiva government’s policy of introducing a host of stimulus measures had boosted confidence among investors, additional strong measures were needed to ensure the Kingdom’s economic recovery in the second half of the year.

Abhisit yesterday met the Joint Public-Private Committee – comprising the Board of Trade of Thailand, the Thai Bankers Association and the Federation of Thai Industries -and the Joint Foreign Chambers of Commerce in Thailand.

They hosted a special luncheon to hear the PM speak on “Restoring the Trust in Thailand”.

Abhisit sought to convince the business leaders of the government’s determination to boost the economy. He said he believed the government’s many stimulus packages would ensure a recovery in the second half of the year.

“The government is considering borrowing more from overseas if its funds are insufficient to boost the country’s growth,” the premier said.

To solve the liquidity problem faced by enterprises, Abhisit said the government was seeking a new bank-guarantee mechanism to help them survive amid the credit crunch.

Board of Trade chairman Pramon Sutivong said it would be difficult for either the global and national economy to recover in the second or third quarters.

“We agree with the government about the allocation of more than Bt100 billion to boost domestic growth. However, those measures and the budgets allocated are not enough. The government should seek other measures to alleviate not only people’s burdens, but also those of the business sector, such as a cut in [corporate] income tax collection,” said Pramon.

Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, said foreign investor confidence had risen since the prime minister had demonstrated his determination to boost the economy.

However, he said the measures already announced would not be able to boost growth right away – and possibly not even this year.

“It may take a bit longer than the end of the year for the economy to recover, as so many conditions are [negatively] affecting growth. However, at least the government’s measures will help ease the pain for the country,” said Von der Luehe, who called for the government to act to curb rising unemployment during the slump.

He also called on the public to give the government a chance to do its work without any interruptions. Political certainty is an important factor for restoring confidence and paves the way for further economic growth, he said.

Jean-Jacques Bouflet, minister counsellor for the delegation of the European Commission in Thailand, said domestic stimulus was necessary, but it would have a limited impact due to budgetary and other resource constraints.

The government must not only concentrate on domestic growth, but also on the export sector as it accounts for two-thirds of the Kingdom’s economy, he said.

To ensure economic growth, Bouflet said the government should focus more on trade liberalisation, as exports are particularly sensitive to the impact of lower global demand.

Thai business calls for more recovery plans

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Source: ABS / CBN News

Across Asia hotels, airlines and tourism operators are bracing for another tough year as the financial crisis keeps long haul visitors at home, and regional travellers tighten purse-strings with shorter, budget trips.

“There’ll definitely be a drop in business, fewer tourists is a reality,” said Laurence Lai, the owner of two photo galleries at Hong Kong tourist hotspots, including the Star Ferry pier, selling iconic images of the former British colony.

“I expect a 30 percent fall at least. I’m having to shift my strategies to confront this financial tsunami, but you just have to stand firm and face the winds,” added Lai, who relies on tourists for half his sales.

Asia’s blend of diverse cultures, geography, bargains and exoticism, with travel gems ranging from snowy Himalayan kingdoms to neon-lit capitals, crumbling Khmer ruins and powdery beaches — have made it one of the world’s fastest growing tourism regions in recent years, along with the Middle East.

But since the downturn intensified last year, travel markets spanning Hong Kong, Thailand and India have suffered sharp contractions, at times worsened by political turmoil, with many projecting negative growth in 2009.

Hong Kong, now one of Asia’s top tourist hubs with 29.5 million visitors last year, is predicting visitor arrivals to dip 1.6 percent in 2009, though a steeper drop of 9.2 percent is forecast for non-Chinese visitors.

Singapore’s tourist arrivals, meanwhile, fell 2 percent last year with more gloom expected, while Thailand and Malaysia both expect 9 percent drops in visitors this year.

The UN’s World Tourism Organization (UNWTO) has described the Asia-Pacific region’s performance in 2008 as having “deteriorated most rapidly,” compared with the Americas, the Middle East, Europe and Africa, with tourism demand expected to be impacted further in the short to medium term.

The International Air Transport Association (IATA) has warned global airlines face their worst business crisis in 50 years with carriers facing possible collapse, revenues tumbling and hundreds of thousands of jobs at risk.

IATA’S director-general said in December some 300,000-400,000 jobs were at risk among some 32 million or so people now employed around the world in air transport, travel and tourism sectors.

Despite the extremely fragile situation, the Pacific Asia Travel Association (PATA) expects Asia, which lured around 280 million international arrivals in 2008, to bounce back and enjoy 4-5 percent average growth over the next three years.

“We are extremely cautious in our optimism, but we still believe it’ll be above the line over the next couple of years,” said John Koldowski, director of the Strategic Intelligence Center for PATA.

But Koldowski said more budget-conscious travelers cutting back on lengths of stay and spending, could spell worse-than-expected pain for tourism-reliant businesses such as retailers, catering and hotels.

Hotel occupancy rates in the Asia Pacific region fell to 66.7 percent last November, versus 76.4 percent for the same period a year before, according to STR Global.

“While we’re saying the (arrivals) numbers may still show some growth, we’re very conscious of the fact that people are changing their habits and you can’t expect the same amount of revenue out there,” he added.

The UNWTO says it expects the decline in trip duration and spending to be “more pronounced” than the fall in arrivals.

James Standen, an American tourist is an example of this. Snapping shots of Hong Kong’s cityscape with his wife on Victoria Peak, he said the tanking US economy hadn’t put them off their 10-day trip to Asia, but they delayed coming till after the New Year to save on airfares. “The economy hasn’t really bitten us…but it cost about half as much by coming later.”

Political instability and shifting government policies have also exacerbated the strain on the tourism sector in countries such as Sri Lanka, India, Thailand and Macau.

The weeklong siege of Bangkok’s airports tarnished Thailand’s reputation as a tourist haven, and caused around a million foreign visitors to cancel or go elsewhere.

Thailand’s Central Bank recently forecast tourist arrivals could fall 9 percent this year to 12.8 million, the worst year since 2005 after the tsunami disaster.

In India, 179 people, including scores of tourists, were killed in November’s Mumbai attacks, when gunmen targeted luxury hotels and other popular tourist spots in India’s financial capital. The gloom has since spread to places such as Goa, one of the country’s top tourist draws where visitor arrivals fell 25 percent during the peak season, according to officials.

“We did see a slowdown in foreign tourist arrivals because of the economic slowdown and later, because of the Mumbai attacks,” Ralph DeSousa, who heads the travel and tourism association of Goa, told Reuters by phone.

“When you go on a holiday, you want to be relaxed, and all these factors don’t allow you to be that,” he added.

In the gambling mecca of Macau, whose remarkable casino boom has helped triple its annual arrivals over six years to just over 30 million last year, sudden visa curbs on Chinese visitors by Beijing’s communist leaders last year have dampened growth.

“In 2009, if we can have the same number of 2008, or a little decrease or a little increase. I think we have achieved good results,” said Joao Manuel Costa Antunes, the director of Macau’s Tourist Office told reporters.

Asian tourism set for rocky ride in 2009

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Koh Chang Kacha Resort and Spa is located on the east coast of the Gulf of Thailand. This idyllic resort is perfectly located in the centre of Koh Chang’s famous White Sand Beach where you can swim in the calm tropical waters, sunbathe under the coconut palms or go for a sunset stroll along the beach.

Set amid harmoniously landscaped gardens, the Koh Chang Kacha Resort and Spa has 89 beautifully designed rooms and villas. The resort’s spacious and luxurious rooms all command majestic views of either White Sand Beach or the lush tropical gardens.

The Kacha Restaurant is open from breakfast to dinner for all-day dining, which offers the freshest seafood. It has both Thai and European cuisine prepared by some of the best cooks on the island and the service is both friendly and courteous.

The Parichart Spa is all about relaxation and revitalisation. Their beautifully designed spa is there to make sure you leave healthier and happier than when you arrived, where the spa therapists help you choose the best treatment for your individual needs. The Parichart Spa is located in the gardens near to the swimming pool and the massage is located opposite the resort. The massage treatments follow the ancient Thai tradition of healing and well-being using pressure points to relieve stress and rejuvenate the skin and muscles of your body. The Body Exfoliation centre scrub uses herbs, fresh milk and honey to remove dead skin cells and replenish moisture content.

Standard rooms (8 rooms) are equipped with individually controllable air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, mini bar, safe deposit box, coffee/tea maker and hairdryer. The bathrooms feature walk-in showers with all amenities provided.

Seaview Deluxe Building (20 rooms) feature an outdoor terrace with superb sea views. The rooms are equipped with individual air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, mini bar, safe deposit box, coffee/tea maker and hairdryer. The bathroom has a separate bath tub and walk-in shower.

Deluxe Building Rooms (10 rooms) feature an outdoor terrace with beautiful views of the tropical gardens. The rooms are equipped with individual air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, mini bar, safe deposit box, coffee/tea maker and hair dryer. The bathroom has a separate bath tub and walk-in shower.

Beachfront Villa (4 rooms) is where you can wake up with the beach right outside your terrace. With an additional loft bedroom upstairs, this villa is suitable for 2-4 guests. The rooms are equipped with individual air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, mini bar, safe deposit box, coffee/tea maker and hair dryer. The bathroom has a walk-in shower.

Seaview Deluxe Villa (5 rooms) is where you can relax in your own private villa with sea views located close to the swimming pool. The rooms are equipped with individual air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, DVD player, mini bar, safe deposit box, coffee/tea maker and hair dryer. The large bathroom has a separate bath tub and walk-in shower.

Deluxe Villa (6 rooms) rooms feature an outdoor terrace overlooking the exotic tropical gardens. The rooms are equipped with individual air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, DVD player, mini bar, safe deposit box, coffee/tea maker and hair dryer. The large bathroom has a separate bath tub and walk-in shower.

Superior Bungalow (36 rooms) is comparable to their standard room. The superior room has in addition a private balcony, perfect for al fresco meals or just relaxing with a good book. The superior rooms are equipped with individual air-conditioning units and colour televisions with a large selection of both local and international channels. Facilities include IDD telephones, mini bar, safe deposit box, coffee/tea maker and hair dryer. The bathrooms feature walk-in showers with all amenities provided.

Prices start from as low as Bt1,550 ($45) a night and discounted bookings can be made via http://www.r24.org/kochangisland.com/kohchang/kacharesort/

Koh Chang Kacha Resort and Spa

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Source: The Nation

Hotels and tour operators in Thailand have split views about the potential of recovery of the local industry, with most feeling the introduction of the economic stimulus measures Democrat-led government should help speed up the recovery.

Hotels and tour operators welcomed the stimulus package, which would pump billions of baht into the overall economy.

Among the measures for the tourism sector are the reduction of visa fees and landing fees and the tax deduction for companies organising meetings and seminars locally.

Apichart Sankary, president of the Association of Thai Travel Agents (ATTA), said what the Abhisit Vejjajiva government did was very good to restore consumer confidence.

“The tourism industry will eventually benefit. When people are more confident and have money, they will travel,” he said.

The reduction of visa fees and landing fees will encourage more foreign tourists to visit Thailand. Charter flights, which amounted to 70-80 flights during the Songkran festival last year, will return.

Mr Apichart believes the Asean Summit will help stimulate the industry further since the event includes ambassadors, state leaders and foreign media, who can help spread news convincingly that political conflicts here have eased.

“If these people get accurate information about our country and then go home to tell other people, the image of Thailand will improve. And the tourism industry will gain as well,” he said.

China has already lifted its tourism warning on Thailand and Chinese tour operators have begun selling packages.

Surapong Techaruvichit, the vice-president of the Thai Hotels Association, said the Abhisit administration was determined to solve problems and listen to opinions from private operators.

The political instability last year and the closure of Suvarnabhumi Airport by the People’s Alliance for Democracy in late November sent the local tourism industry into the doldrums.

Tourist arrivals have fallen sharply and hotel occupancies have dropped to 10-20% in some locations even in the middle of the peak season.

Mr Apichart said the Abhisit government was smart to deal with the red-clad anti-government protesters by not confronting them. “I don’t think that red-shirted group will last long. If people don’t pay attention on them, they will finally be gone,” he said.

But Michael Thomas, president of Xen Hotels & Resorts, thinks the Thai tourism slump would last long as currencies of the world’s major economies like the United Kingdom, Europe, Scandinavian countries and Australia keep weakening against the baht. Moreover, these countries are facing financial problems and rising unemployment.

“It’s difficult for Thailand to compete with other cheaper and closer-to-home destinations. The waiver of visa fees for three months will not encourage visitors to jump on a plane, paying hundreds of dollars just for the sake of a free visa. You have to do more than this,” he said.

Mr Thomas suggested the government address the strong baht issue. Tax benefits and other incentives should be given to operators. The Tourism Authority of Thailand and the Immigration Bureau should also work hand in hand to boost tourism.

Opinions differ on Thai tourism recovery

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Aiyapura Ko Chang is a 5-star hotel and resort is situated in Ko Chang, not far from the border with Cambodia. Around 85% of Ko Chang is part of the Ko Chang Marine National Park.

Aiyapura is located in the secluded Klong Son Bay with beautiful Thai-style villas and suites. The resort is surrounded by lush tropical gardens with ocean views. it also has a large 30-metre leaf-shaped swimming pool.

Ko Chang is in the Gulf of Thailand and is a tropical island paradise. It is is the second largest island in Thailand after Phuket. It is a picturesque island of virgin rainforest, jungles, high mountains, spectacular coastlines, fine white sandy beaches, clear blue sea, colourful corals, breathtaking waterfalls and an abundance of marine life.

The Aiya Spa is the finest pavilion with traditional Thai decoration and tranquility, providing exotic and invigorating spa treatments. Aiyapura Resort and Spa offers a variety of recreational and cultural activities such as private yoga, Pilates, meditation, Thai boxing and cooking classes and is accessible to many nearby tourist spots of waterfall and outerislands that provide the tourist with some of the best scuba diving and snorkelling in Asia.

The resort has 19 superior rooms, all designed for maximum space and comfort, with views of its tropical garden and ocean. And should you want to take a break from beach life there are a wide range of activities.

One of the many aspects of life at the Aiyapura is its Thai cuisine. It also offers Thai cooking classes in the resort, which teach you classic Thai dishes.

The best diving season is between October and April, with the best sites on the paradise island of Ko Kood. There you can see soft corals, anemones, a myriad reef fish, and sometimes eel. In addition, there are two wreck dive sites. The Ko Chang Wreck is a Thai warship sunk by the French navy in 1941. The wreck is only 15 metres deep in the Salakphet Bay on the southern tip of the island. The other wreck is the Pak One Wreck which sank after hitting a coral reef in August 1996 on its way to Vietnam. It resurfaced almost 8 years later. The 900-ton sunken tanker posed a danger to ships in international waters. There are also a few dive centres on Ko Chang such as the Ploy Scuba Diving in Bang Bao. They provide free transfer to and from the resort.

Ko Chang is famous for its waterfalls and mangrove swamps. During the cooler months on Ko Chang, you can rent a boat to slowly cruise along the waters at night to see fireflies in the mangroves. Thousands of fireflies send out mating signals as they settle into the mangrove forest, lighting up the whole tree with their simultaneous flashing in the dark. Guests can also visit waterfalls in the National Park, or take a relaxing punt in the mangroves at Salak Kok, followed by a seafood lunch in a floating fishing village. Aiyapura has a new Muay Thai (Thai kick-boxing) training arena, and the Thai National Team has already made use of the fantastic facilities for a training retreat.

As far as cuisine is concerned, the Aiyapura Ko Chang has the Vimarn Kaew, their signature indoor restaurant located only few steps away from the beach, where you can enjoy sunrise breakfast with ocean views in the morning and candle-lit a la catre of Mediterranean dinner in the evening. The Ruen Plub Plung is a traditional Thai restaurant overlooking the tropical gardens, serving authentic Royal Thai cuisines with secret recipes of the chef. The Pool Bar is a delightful and informal open-air hideaway, with a poolside dining with ocean views and a bar right in the pool where you can cool off with a cocktail. The Ruen Plub Plueng Terrace and Bar ofrfers coffee, tea and bakery selections at any time of the day, whether overlooking the ocean or reading a book on one of their cozy sofas. Catch the cool evening.

Prices start from as low as Bt3,400 ($100) a night and discounted bookings can be made via http://www.r24.org/kochangisland.com/kohchang/aiyapura/.

Aiyapura, Ko Chang’s 5-star hotel and resort

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Source: The Nation

In the worst-case scenario, Thai Airways International may need to borrow up to Bt19 billion this year to boost liquidity.

“We may need assistance from the Finance Ministry,” chairman Surachai Thansit-pong said yesterday.

The national carrier’s board recently approved long-term borrowing of about Bt10 billion, mainly to refinance short-term debts that come due in February and March. Part of the funding will also be used as working capital.

Surachai said THAI would need to revise its business plan and raise funds to refinance short-term funding and increase liquidity, due mainly to the sharp drop in passenger numbers during the current high season.

The number of passengers during December and January has dropped by more than 30 per cent year on year, due partly to the week-long seizure of Suvarnabhumi and Don Mueang airports.

Last week, Transport Minister Sophon Saram told the THAI board to cut benefits given to directors and employees as a way to return to profit. The benefits include free first-class tickets to directors and steep discounts on ticket prices for employees and their relatives.

Surachai admitted the proposal would not, however, help the airline financially. It was meant mainly to have a psychological effect on employees, who need to brace for the crisis, he said. In financial terms, if benefits were to be cut, THAI would save only Bt6 million a month.

“What would revive the airline is a revision of the business plan. How can we recover the drop in revenue? We’re waiting to see if passenger numbers pick up in February and March. If the figures do not improve, this could affect THAI’s liquidity, and we would need to borrow,” he said.

The carrier lost Bt6.6 billion in the first three quarters of 2008. It earlier estimated that the shutdown of the two airports had caused the company damage of more than Bt20 billion.

Asia Plus Securities and Capital Nomura Securities expect THAI to post an annualised net loss of Bt13 billion in 2008, with a net loss of Bt7 billion in the fourth quarter alone.

Asia Plus expects the company to remain in the red in the first half of this year, due to hedging contracts. THAI pays US$100 (Bt3,500) per barrel for jet fuel, while the market price is $62.

Capital Nomura Securities estimates that THAI’s net loss this year will be Bt2.3 billion and that the company will need Bt20 billion in liquidity.

Philip Securities (Thailand) predicts the 2008 net loss will come in at Bt9.2 billion.

THAI airways may need huge boost

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Source: The Nation

The tourism and real estate sectors and rural villages will receive a big financial boost if the Cabinet approves multi-billion baht proposals from several ministries today.

The Tourism and Sports Ministry alone will submit a set of 13 urgent measures involving a proposed state budget of more than Bt6.8 billion.

The secretary-general of the PM’s Office will seek approval for another Bt6 billion for a sufficiency-economy rural-development programme.

In addition, the Finance Ministry will propose a new incentive to boost real-estate sales by offering home-buyers a tax-deductible allowance ranging from Bt200,000 to Bt500,000 a unit.

Tourism and Sports Minister Chumpol Silapa-archa said the proposed measures aimed at recovery were wide-ranging, including waiving visa fees for three months for visitors of all nationalities.

Thai Airways International will also consider reducing air fares by up to 50 per cent in a bid to encourage tourists to return to Thailand.

Moreover, the ministry will ask for a Bt6.8-billion budget to help small and medium-sized enterprises hit by the economic crisis and airport closures late last year.

There will also be an unspecified budget for advance payments to tourists inconvenienced by the 10-day airport seizures.

Each person may receive Bt2,000, said the minister.

International airports in Thailand will also cut aircraft parking and landing fees, to promote airline service to and from the Kingdom.

Earlier, the Tourism Authority of Thailand (TAT) received Bt450 million for marketing activities, including a plan to hold the “Amazing Thailand Grand Sale” from June to August.

During this period, shopping malls and other retailers will be invited to participate, with discounts of up to 50 per cent offered for selected goods and services.

TAT chairman Weerasak Kowsurat said there would also be a domestic-tourism campaign entitled “Bustling Thai Tourism, Burgeoning Thai Economy”.

Weerasak will meet with private-sector representatives on January 30 to discuss further recovery measures for boosting tourism.

The latest TAT forecasts show international visitors making 15.48 million trips to Thailand this year and generating Bt600 billion in revenue.

Last year’s figures are not yet finalised, but in 2007 there were 14.8 million visitors generating Bt531 billion in revenue.

Meanwhile, Government House sources said a Bt6 billion budget would be sought from the mid-year supplementary state budget to upgrade the quality of life in rural communities.

The funds will be disbursed via the previous government’s Small, Medium, Large scheme, in which a small village with less than 500 people receives an extra budget of Bt200,000, while a medium-sized village with 500-1,000 people gets an extra Bt250,000.

A large village with more than 1,000 people receives an extra Bt300,000.

There are about 70,000 villages of various sizes throughout the Kingdom.

Cabinet set to weigh fresh requests today

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As Barack Obama is sworn into the Presidential Office tomorrow, value for money will be a key theme for the travel industry in 2009, but so will “added value”.

ABTA members, with their commitment to quality, service and choice, can also provide financial protection. High-end operators are also saying that their customers are wanting more for their money, so rather than trading down, they want free room upgrades, free child places and lounge access, among other requests. People who don’t want to give up their holidays, but want to take a cheaper option.

According to a recent report on traveldailynews.com, airlines have done a remarkable job of restructuring themselves since 2001. Non-fuel unit costs are down 13 percent; fuel efficiency has improved by 19 percent; and sales and marketing unit costs have come down by 13 percent. IATA made a significant contribution to this restructuring. But the ferocity of the economic crisis has overshadowed these gains and airlines are struggling to match capacity with the expected 3% drop in passenger demand for 2009.

According to Conde Naste, air travel will continue to slump in lockstep with the economy; the International Air Transport Association (IATA), which represents 230 airlines worldwide, says it thinks that traffic will be down about 3%. So look for airlines to continue to cut flights, at least in the first half of the year. Oil prices are also expected to be down, which should cushion airlines’ finances. In fact, IATA says that airline losses should narrow to around $2 billion from $5 billion in 2008.

In the World Travel Guide, a recent survey carried out by the Post Office in Britain pointed out that “Thailand currently offers the best value for money for British holidaymakers.”
Although the Thai baht has recently strengthened, Andrew Spice of Post Office Travel Services said that “prices remain very low in the country and the discounts now available to top resorts will make Thailand unbeatable value.”

In keeping with this, Thailand’s new prime minister said his government is considering waiving visa fees for all tourists for three months in a bid to boost visitor numbers following last year’s upheaval in the Thai capital and the global economic downturn, an AFP report said.

Prime Minister Abhisit Vejjajiva said that there could also be discounts on aircraft landing fees. “The plan to revive the tourism sector will be tabled at the cabinet meeting next Tuesday and will include a three months waiver for visa fees and discounting landing fees,” he said a seminar. “I hope these measures will help the tourism sector one way or another.”

The Bank of Thailand has forecast that tourist arrivals in 2009 would drop 8.8 percent from 12.8 million visitors in 2008, which is far higher than the downturn in predicted international passenger demand percentages. However, the Thai government has recently allocated US$28.6 million to boost tourism.

In addition, The Tourism Authority of Thailand is working with Chinese authorities and travel companies to entice tourists from that country to come here for the upcoming Chinese New Year festival. A total of 1.05 million visitors from China have been targeted for this year.

Thailand best value for money with travel bargains, hotel discounts and added value

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