ASEAN KEY DESTINATIONS
Thai tourism set for rough ride after Bangkok blasts
THAILAND’S tourism industry may have bounced back after previous bouts of political unrest but a bomb attack in Bangkok targeting foreigners will likely prove a more formidable challenge, analysts say.
Monday night’s blast, which killed 20 people – more than half of them foreigners – was unprecedented for Thailand, despite a history of coups and a decade of instability that has at times turned violent.
The blast hit one of the Thai capital’s most popular commercial hubs, ripping through a crowd of worshippers at a Hindu shrine close to five-star hotels and upscale shopping malls.
The attack “could undermine the recovery in the tourism industry, deepening the country’s economic woes”, said BMI Research, a subsidiary of financial information provider Fitch Group.
The ruling junta was swift to say the perpetrators of the attack were targeting the country’s crucial tourism sector, although who exactly was behind the attack was not yet known.
Tourism was one of the few bright spots in the struggling Thai economy after a difficult year and the government had been hoping to see a surge of tourists in October, particularly among Chinese visitors. The blasts came just hours after data showed Thailand’s economy had slowed in the second quarter, hit by weak domestic demand and exports.
Tourism, which accounts for 10 per cent of the country’s GDP – or up to 20 per cent by some calculations including its indirect contribution to the economy – was one of the few growth areas.
With fears rife over how the bombing will impact the economy, the baht currency slumped to a six-year low and the stock market dived 2.6 per cent, with tourism-related companies suffering the worst of the losses.
“A loss of momentum in the tourism sector – the only firm growth driver in Thailand currently – will present a new downside risk to economic activity,” Australia’s ANZ bank said in a research note.
It warned that the bombing had the potential to damage the tourism sector even more than previous episodes of unrest.
“Previous declines in tourist arrivals have been temporary in nature as previous episodes of political unrest in 2006, 2010 and 2014 indicated. The risk is that a bombing could be perceived as a more negative development than political unrest,” ANZ said.
Until Monday, foreigners had rarely been caught up in the political woes and several countries immediately reacted to news of the blast by advising citizens to be extra vigilant.
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