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Report from The Nation dated Tuesday 29 May 2007 :-

Sunday's blasts in Hat Yai deal further blow to Thai tourism

The series of explosions in Hat Yai on Sunday has had an immediate effect on tourism. Travellers from Singapore and Malaysia have cancelled trips, while those from Australia and the Middle East are considering postponing.

There are calls for government assistance to boost local and foreign investor confidence and that of consumers.

State agencies and other organisations yesterday agreed the attacks would hit tourism but expect a limited overall economic affect.

Bank of Thailand Governor Tarisa Watanagase admitted confidence in the South has been low for some time, but the bombs aggravate the psychological effects.

Her deputy Atchana Waiquamdee said the bombs worsened fragile confidence and would dampen tourism in the region, which had started to recover at the beginning of the year.

She expected a similar impact on the industry to that felt after the 2005 Hat Yai International Airport bombing. Trade will remain sluggish, as usual, she said.

Association of Thai Travel Agents (ATTA) president Apichart Sankay said hotels, restaurants and entertainment businesses in Hat Yai would see a slow down. Many of the centre's visitors are from Singapore and Malaysia and have already cancelled bookings weeks ahead. Moreover, many arrivals cut short visits and are returning home, he said.

Singapore and Malaysia are the region's biggest markets and often make weekend visits to enjoy entertainment.

According to Apichart, the number of local meetings and conferences in Hat Yai had gradually declined as a result of political uncertainty in the South.

"Hat Yai has been in its low season for months. Average hotel occupancy is below 40 per cent. These explosions will reduce that," Apichart said.

He added seasonal tourists - particularly from Australia and the Middle East - worry about the blasts. Many are taking a wait-and-see approach and others will cancel trips.

"So far, ATTA has not received any cancellations from overseas,'' Apichart said.

ATTA reported it was business as usual at tourist destinations such as Phuket, Samui and Krabi. Arrivals are increasing.

Hat Yai and Songkhla Hotels Association president Somchart Pimthanapoonporn said the explosions would damage tourism in the long term.

"It's just the next morning and the tourists are gone. I believe the business will be hit hard in the long term, too," Somchart asserted. Hotel occupancy is less than 20 per cent and the blasts could chop that by 5 per cent, he said.

Hat Yai hotels have increased security measures.

Thai Chamber of Commerce and Board of Trade chairman Pramon Sutivong noted the blasts could hamper economic growth in the South.

The chamber's chairman in charge of deep-South economic development Somkiat Anuras said Songkhla wanted its 12 districts not in the government's special economic zone to be included.

The chamber will ask the government to provide more soft loans to hotels and manufacturers.

The chamber wants to meet with Deputy Prime Minister Kosit Panpiemras to discuss South worries. The chamber and 107 associations will demand measures to boost consumer confidence "because the economy relies on sentiment".

Federation of Thai Industries chairman Santi Vilassakdanont said the bombs would definitely affect tourism and other economic sectors.

"People in the area want government confidence boosters for life safety and asset security rather than tax incentives for investment," he said.

He suggested the government speeded installation of closed-circuit television cameras at Hat Yai and enforced regulations such as banning motorcycle pillion passengers.

Deputy Industry Minister Piyabutr Cholvijarn believed the blasts would not affect the overall investment picture.

Foreign investors usually adopt a long-term plan, he said. More worrying for them is labour skills, government policy and investment support.

In the first four months of this year, the Board of Investment received applications for tax breaks for Bt200 billion in projects. Machinery imports totalled Bt120 billion.

Piyabutr said throughout the year the combined value of all applications would reach Bt500 billion.
--- KatoeyNewsNetwork