Thailand bombing won’t crush tourism

Curtis S. Chin, managing director, Riverpeak Group
Fri, 28 Aug ’15 | 2:23 PM ET
The short-term economic consequences of the recent bombing of the Erawan Shrine in Bangkok continue to be felt. But one lesson from past crises is that the Thai tourism sector will survive — and once again thrive.
More than 20 nations have issued travel advisories or warnings for their citizens traveling to Thailand. Hotels, as well as tour operators inside and outside of the country, are reporting cancellations. This includes canceled trips from the all-important China market. Chinese travelers now make up about a quarter of all foreign tourists in Thailand annually, with the Erawan Shrine a popular destination. More than 4 million visitors from China traveled to Thailand in the first six months of this year alone, and those numbers were expected to continue to rise as China-Thailand relations have warmed.


imageWebphotographer | Getty Images
Erawan shrine in Bangkok

Tourism is responsible for nearly 10 percent of Thailand’s economy.

“Thailand is amazingly resilient,” says Kevin Beauvais, CEO of Zinc In Vision Hospitality, which operates hotels and resorts in Thailand and elsewhere in Asia. “People will always come back for the sun, sand [and] sea.”
The tourism numbers have borne out this view. For the last five years, Bangkok has taken one of the top two spots in the MasterCard Global Destination Cities Index, which ranks 132 destination cities around the world in terms of total international overnight visitor arrivals and cross-border spending. Bangkok’s draw remained, despite some of the worst street violence in Thailand’s recent history.

In May 2010, large parts of Bangkok were paralyzed by weeks of anti-government demonstrations. Thailand’s largest shopping complex was set ablaze. A television station, the stock exchange and the Bangkok Post building, among others, were attacked. A bloody crackdown on protesters by the Thai army ensued and more than 70 people lost their lives.
Then, as now, dire warnings followed about the nation’s tourism industry. Today, a gleaming new and expanded Central World shopping mall complex has emerged from the embers as one of Bangkok’s most visited destinations.
Just a few months later, in October and November 2010, Thailand was hit by one of its worst calamities in five decades. Floods killed hundreds, inundated homes and factories, closed airports and roads, and stranded tourists across the country. Dire predictions about Thailand’s tourism sector also ensued as hotel occupancy rates plummeted and expenditures by visitors declined. Yet, the tourists returned.
Few international visitors also may now remember that, four years earlier, on Dec. 31, 2006, during the New Year’s countdown, bombings in eight places in Bangkok left at least 40 dead or injured.
So, what lies ahead for Thailand’s enduring travel and tourism industry?
“Bookings will take a very short-term hit, like the markets, but will bounce back,” said Dan Fraser, co-founder of Smiling Albino, a luxury adventure tour company in Thailand. “Thailand is resilient and has a history of bouncing back… so we don’t expect anything more than a temporary blip.”
Other major travel destinations have withstood far worse attacks – including the resort island of Bali, the focus of bombings in 2002 and 2005, and New York, victim of the 9/11 terrorist attacks in September 2001.
In Bangkok, the Erawan Shrine has reopened, vigilance is up, and the nearby Grand Hyatt Erawan Bangkok hotel, which experienced some minor damage in the Monday explosion, is in full operation, says Hyatt area vice president and hotel general manager Gordon Fuller.
With exports contracting, falling consumer sentiment, a drought-stricken agricultural sector and a persistent political divide, the resilience of the nation’s tourism sector should be among the least of the economic worries facing Thailand’s leaders today.


Commentary by Curtis S. Chin, a former U.S. Ambassador to the Asian Development Bank. He is currently managing director of advisory firm RiverPeak Group. Follow him on Twitter at @CurtisSChin.