A food vendor strolls past empty beach chairs as a storm approaches Patong Beach on Phuket late in October. Thailand reassured tourists that the country was safe despite warnings from western nations.

The industry, which has been given a high profile by the Thaksin Shinawatra government, received a further boost in 2002 with the establishment of a new Tourism and Sports Ministry.

During the post-Sept 11 period, Thailand had a better median growth rate in tourist arrivals than other Asian countries, with more than seven million foreign visitor arrivals in the first eight months of 2002, a 7% increase from the same period the year before, according to the Tourism Authority of Thailand (TAT).

But the lingering possibility of a US-Iraq war has led to a slowdown in the global tourism market as people are growing more reluctant to travel.

Moreover, the Bali bombing in October and terrorist threats in Asia have damaged tourism in the region, which had come to be considered a safe haven during the post-Sept 11 period.

Many Asia-Pacific countries, particularly Indonesia, have suffered a sharp drop in tourist numbers since the Bali bombing on Oct 12.

There was also a significant drop in the number of outbound tourists from Australia, whose nationals represented the largest number of victims from the blast that killed some 200 people.

Despite all of the external threats, Thailand still seems to be on course to achieve its growth targets.

However, travel warnings issued by several foreign governments have had a slight impact on the local industry with some cancellations from several markets.

He hasn't gone away: Western tourists browse a street stall selling T-shirts bearing Osama bin Laden's portrait at the Patpong night market in Bangkok in October.

The most affected source markets were Japan, South Africa, Australia, Singapore, Portugal and Middle Eastern countries, said Sonthaya Khunpluem, the tourism and sports minister.

Officials said 663 trips cancellations were made in October, 1,541 in November and 1,703 in December.

But weighed against the 27% year-on-year growth, or almost 700,000 million tourist arrivals in October, and the estimated 1.8 million visitors expected during the holiday season in the last two months of the year, the cancellations were relatively small and manageable, said Mr Sonthaya.

The impact of terrorist threats was also expected to affect the industry in the coming year.

The TAT, however, is still confident that it would meet its the target of 10.3 million foreign tourists, who would generate 320 billion baht in earnings for all of 2002.

The TAT and the Thai Hotels Association (THA) have urged the government to counter the negative impact of external developments on the local tourism industry with a clearer message.

The slow recovery in the global tourism and travel industry led to a decline in Thailand's hotel business in the first nine months of 2002.

Tourists drink outside Shashana restaurant on Khao San restuarant on Khao San Road, one of three Israeli restaurants in Bangkok. An attrack in Kenya in November gave rise to concerns that Israelis travelling anywhere in the world could become the target of terrorists.

The average occupancy rate in Thai hotels fell to 69%, compared with 73% for the same period in 2001, said Prakit Chinamornpong, secretary-general of the THA, which has 420 members.

In response, a crisis management plan was formulated by the Tourism and Sports Ministry to cope with the tough times ahead for the global travel and tourism industries.

The ministry prepared for three levels of crisis, from normal tourist cancellations through to the impact of major terrorist attacks. Contingency plans are also in place for other serious situations, such as a war in the Middle East.

While the international tourism industry is performing on course, the local segment has also been performing well with the TAT running a continuous campaign to urge Thais to travel within the country.

The revenue generated from domestic travel this year was likely to meet its target for 2002 of 308 billion baht, 37.5% more than in the previous year, as the campaign to promote local travel had been effective, said Juthamas Siriwan, TAT governor.

In 2003, growth was expected to continue with projections of 11.5 million foreign tourist arrivals and 360 billion baht in revenue, she said. China, Japan and the Middle East will be crucial targets for marketing campaigns by TAT in 2003.

The agency is looking to position Thailand as the ``Tourism Capital of Asia'' next year, with special emphasis

on attracting growth from these three major markets. To support the plan, the government would invite 1,500 international journalists to visit Thailand in 2003 as part of its public-relations campaign.

The ``Amazing Thailand: Experience Variety'' campaign will also be maintained in 2003, with special emphasis on attracting growth from China, Japan and the Middle East.

Mrs Juthamas said competition for market share was increasing steadily. ``We need to ensure that we maintain a strong brand image and positioning through well-targeted campaigns in all our target markets,'' she said.

Mrs Juthamas said the TAT offices in China, Japan and the Middle East had been asked to brainstorm new measures to help encourage tourism.

The TAT also estimates that Thais and expatriates will make 63.07 million domestic trips in 2003, 2.5% above projections for 2002. Revenue from domestic tourists in 2003 has been forecast at 323 billion baht, up 4.9% from the estimated total in 2002. Campaigns with Thai restaurants overseas and initiatives to target overseas Thais will also be staged.

The government has set a tourism budget of 3.3 billion baht for marketing and 3.5 billion for development for fiscal 2003, which started in October. Funds include spending for the upkeep of tourist destinations and services.

Under the tourism master development plan, a Tourism Act will serve as a blueprint for industry development, while a national co-ordinating body will be established to oversee state initiatives and streamline budget allocations across different agencies.

The plan also called for the establishment of a Convention and Exhibition Bureau to co-ordinate measures to improve the meetings, incentives, conventions and exhibitions (Mice) market.

The year 2002 could be dubbed as one of the most important years for Thailand's tourism industry. With the establishment of the new ministry, the industry seems to have brighter prospects in the future. Tourism executives had complained for years that the TAT, while doing a good job of marketing, had little clout when it came to tackling threats to tourism such as environmental degradation and personal safety problems.

The industry is expected to benefit from the new ministry's increased authority to set new directions and more effectively co-ordinate policy with other state and private-sector groups.

However, some key industry figures have expressed concern over how much difference the new ministry would really make to the development of the tourism product.

Under the Sports and Tourism Ministry, there will be four key offices _ Office of the Minister, Office of the Permanent Secretary, Office of Tourism

Development and Office of Sports and Recreation. The TAT would be a state enterprise under the ministry.

The ministry would be a regulatory body and would focus on the development of tourism products and services.

The TAT would concentrate only on marketing and promotional activities, which would allow TAT staff to improve their performance.

However, Vichit Na Ranong, chairman of the Tourism Federation of Thailand, said it was too early to say how much impact the ministry would have on the future direction of the industry as its structure and framework for operations had not been fully revealed.

Mr Vichit believes that the ministry would help to enhance the performance of the tourism industry at certain levels, but it needed to be led by someone with authority as many agencies involved in tourism were still under other ministries.

``Although the industry would now have its own ministry, there are still other agencies under other ministries involved in tourism. Therefore, it still requires a co-ordinator with authority, like the prime minister, to give orders,'' said Mr Vichit.

But he agreed that separating the regulatory and development functions of the TAT was a good move. ``Now, the TAT does not have to be both a regulator and marketer. It can

now start focusing only on marketing and promoting tourism,'' he said. Prakit Chinamornpong, the THA secretary-general, said that the establishment of the Tourism and Sports Ministry would definitely be positive for the industry.

``With its own budget and minister who can more easily co-ordinate with other ministers, it would surely benefit the industry,'' he said.

But he questioned whether the ministry might become a typical bureaucracy, complicating the tourism industry's development process and slowing down both the workflow and decision- making.

``If they could abolish all the red tape, that would be very good as the ministry would have full authority for tourism and the ability to co-ordinate with other involved ministries,'' said Mr Prakit.