ELECTION SCHEDULED FOR DECEMBER 23, 2007; GOVERNMENT TRAVEL ADVISORIES DO NOT REFLECT REALITY;
INFRASTRUCTURE INVESTMENT NEEDS TO CONTINUE; THAILAND IS NO LONGER AS COST-EFFECTIVE A DESTINATION WITH CURRENCY FLUCTUATIONS

POLITICAL STABILITY
Fair and open elections would be a boost

Last year's coup and subsequent New Year's Eve bombings in Bangkok would have destroyed many country's travel and tourism industries.

But while the debate continues over the degree of impact the current political instability has had on the sector, it appears to be weathering this latest crisis quite well.

"Even in September 2006, the month of the coup, we still had more than 900,000 visitors," said Tourism Authority of Thailand governor, Phornsiri Manoharn.

QUOTE When competing destinations such as China, Macau and Singapore are providing extremely "foreign investor-friendly" platforms, Thailand is definitely suffering. Macau and Singapore have recently benefited from billions of dollars from US investors.

Other industry leaders try to remain optimistic.

"I think there is an air of caution in this country pervading every layer of society and it is because of the uncertainty brought about since the coup and we are now once again in a period of recovery," said Swiss International Air Lines general manager for Thailand, Laos, Myanmar, Cambodia, Vietnam and chairman of the Thailand Board of Airline Representatives, Brian Sinclair-Thompson.

Pacific Asia Travel Association chief executive officer, Peter de Jong, remains confident that Thailand will bounce back though.

"We have a sense of vacuum right now and not really knowing what is happening next year," he said.

The nation will go to the polls in December to elect a post-coup government, and many hope this will be a panacea for the nation's ills.

"Political stability and a democratically elected government, two factors that Thailand has frequently enjoyed, are needed for the basis for a positive consumer appraisal," said Mr de Jong.

"The sooner they are re-established, the faster they will recover.

"If the elections are widely seen as fair and transparent, they will go a long way in repairing the 'brand' Thailand.

They will not only help restore consumer confidence, but also investor confidence."

SECURITY
Secure image helps secure business

The turmoil in Thailand's southern provinces and more than a year of political unrest have dented Thailand's reputation.

A country's image has an affect on potential tourists selecting destinations.

The public perception of the country must match the political reality.

Airing the Amazing Thailand messages on CNN sends out a good message about the country, but not if it immediately follows news of more unrest in the country's south.

Credibility becomes an issue.

Governments also have a responsibility to their citizens to keep them abreast of potential conflict zones after previous atrocities with bombs and airplanes.

The streams of travel advisories some countries send out reporting that Thailand may be an "unsafe" destination make matters worse.

"Australia in particular has been very vocal in their release of travel advisories," Swiss International Air Lines general manager for Thailand, Laos, Myanmar, Cambodia, Vietnam and chairman of the Thailand Board of Airline Representatives, Brian Sinclair-Thompson said.

"I have challenged their embassy repeatedly on the source of their intelligence and they seem to have the attitude that 'since the Bali bombings we are not going to get caught out again, which is very unhealthy.

" Mr Sinclair-Thompson said Thailand should have a well co-ordinated campaign to refute the travel advisories, but no officials have been able to launch anything concrete to take this path.

Thailand does have an image problem and this can be particularly damaging in some countries such as Japan, whose citizens take their safety very seriously.

Japanese tourists to Bali virtually dried up in the wake of terrorist bombings there.

The Japanese didn't travel to Phuket after the tsunami.

Many Chinese travellers also refused to go to Phuket for cultural reasons.

The reality is that tens of thousands of tourists come to Thailand each week.

There could be more.

The powers that be – or even the private sector – need to launch a motivational image campaign to assure the world that Thailand is safe.

Who will stand up and be counted?

CURRENCY FLUCTUATION
Is being a low-cost destination a good thing?

Thailand has long had a reputation as a low-cost destination, and, when the baht was devalued in 1997, it became even cheaper.

Now, the shoe is on the other foot, and the baht is much stronger. However, this hasn't deterred budget-conscious travellers; it has only made them thriftier.

The Kingdom has been trying to reposition itself as a quality destination, but quality tourists are coming in insufficient numbers.

It seems the conundrum for Thailand is: "Are we are all dressed up with no place to go?" Thailand has brilliant hotels at the right price, great service and the reputation of a great destination, but where are the high-yielding tourists coming from? Diethelm Travel chief operating officer, Richard Brouwer agrees.

"The service levels in Thailand are the best in the world and our hotels have all the best facilities," Mr Brouwer said.

"Yet, the stronger baht hasn't affected the price. The rates are the lowest I have seen and I remain amazed that this is possible."

Despite the value for money Thailand provides, tourists still want to haggle over 100 or 200 baht, which is a very small amount when compared to the overall cost of their holidays.

Even in places such as Patpong Market tourists argue over the cost of a 30 baht tee-shirt.

When you see international tourists arguing about five baht, what sort of message does this send out? People come to Thailand with very much the perception of expecting to pay the least amount of money possible and the stronger baht has done little to change this. If anything, it may drive the spendthrifts to other destinations.

What will Thailand do then?

INFRASTRUCTURE
Tourism infrastructure projects grind on

The coup interrupted much of Thailand's infrastructure development. Bangkok's mass transit expansion was put on hold as was the phase two development of Suvarnabhumi Airport.

The Suvarnabhumi expansion delay triggered the return of domestic flights to Don Mueang in March, which wasn't as dramatic a move as first expected. Though airlines had to foot much of the bill, the Airports of Thailand (AOT) only needed to dust off the equipment after a sixmonth slumber.

In late May, it was announced that the multibillion-baht Airport Rail Link from Makkasan to Suvarnabhumi was behind schedule and over budget. The link was supposed to be completed by August this year, with a three-month testing period after that.

But by 30 April, the overhead railway was just over 50% complete, when it should have been 98% done. Officials remain unsure how long it will take to finish, but the State Railway of Thailand gave the builders a 463-day extension, which would place the completion date in August 2008.

The private sector fared much better. Bangkok Airway's Samui Airport recently commenced service for international flights with the completion of its new 500-million-baht terminal.

The 73,000-sqm-terminal – four times the size of the old one – can accommodate 16,000 passengers a day. It comprises four domestic terminals and two international terminals. The official opening is planned for January 2008.

The Japanese-funded Second Mekong International Bridge at the Mukdahan- Savannakhet border between Thailand and Laos, opened late last year, adding a key link to the East-West Economic Corridor, a 1,450 km stretch that connects Thailand with Vietnam, Laos and Myanmar.

The US$1.7 billion East- West Economic Corridor should be complete some time in 2008.

INVESTMENT
Regional rivals draw investment dollars while Thailand flounders

More than a year of political instability has deflated some investors' confidence in Thailand's travel and tourism sector, and they are fleeing to more friendly regional destinations.

Meanwhile, possible changes in the nation's already-uninviting foreign business laws are hinting at even more obstacles for foreign investors seeking opportunities.

Competition for tourist arrivals is already fierce within the Asia Pacific, and the issues the industry faces are very serious.

Major international companies are rethinking potential investment in Thailand as there has been damage to the country's image overseas.

Many in the travel industry are concerned that foreign investors are fleeing to more welcoming markets or at best taking a wait-and-see position.

Others believe bargain hunters are standing on the sidelines and waiting to pounce on long-standing businesses that are facing rough times.

When competing destinations such as China, Macau and Singapore are providing extremely "foreign investor-friendly" platforms, Thailand is definitely suffering.

Macau and Singapore have recently benefited from billions of dollars from US investors.

They are afforded attractive tax breaks to set up businesses that in turn bring billions more in currency to those destinations.

They have the foresight to see the benefits tourism and international business can bring to an economy and chase it.

Thailand has traditionally been reluctant to go down this route.

But with a new government in place – hopefully toward the end of the year – is there hope for a change, or a relaxation of decades-old rules? Time will tell.

Thailand has a wonderful image as a travel destination, however a view held by many is that the current bureaucracy running the country has held up much progress in many areas while other countries in Asia have taken great leaps during a period of economic prosperity.