Thailand's Teflon tour industry to weather floods

A foreign tourist walks past a shopping mall fortified with sandbags in Bangkok, Thailand, Friday, Nov. 11, 2011. Thailand is once again in tourist turmoil as floods linger, but ever resilient industry unfazed.

BANGKOK—The tuk tuk drivers outside the Holiday Inn in Bangkok's still-dry downtown sit idle, calling to passers-by in hopes that someone, anyone will climb in for a ride in their colorful pedicabs.

Fares are hard to come by as the floodwater creeping ever deeper into the Thai capital have washed the streets of tourists.

Trying times like these are nothing new for those in Thailand's all important tourism industry, and with each new calamity come dire predictions that the kingdom's image and its allure to foreign tourists may be irreparably harmed. 

But each time it recovers and its beaches, jungles, spas and urban malls are soon swarming with visitors again.

Call it "Thailand's Teflon tourism industry," said Imtiaz Muqbil, the executive editor of Travel Impact Newswires, which writes about tourism in Asia.

The past decade has seen Thai tourism -- which accounts for about 6 percent of the economy and employs more 2 million workers -- rocked by crisis after crisis. Among the disasters: 

The SARS epidemic, a tsunami, a military coup, the occupation by anti government protesters of the capital's two airports and multiple rounds of deadly street fighting.

The most recent violence, in April and May last year, ended with nearly 100 people killed and several landmark Bangkok buildings set ablaze, but Thailand had a record 16 million international visitors in 2010, showing how quickly tourism can bounce back -- even from from frightening images of mayhem broadcast worldwide.

The country's worst flooding in half a century, which began in July and has steadily worsened through an epic monsoon season, has killed more than 500 people nationwide and left everyone from street vendors to restaurant owners to hoteliers saying business in Bangkok is down.

"This is high season now and a lot of tourists have just disappeared," said tuk tuk driver Thongdee Thongrin. His business has been cut in half since sections of northern and western Bangkok began to flood two weeks ago.

But as a whole Thailand seems to once again be weathering the latest storm, with tourists still coming but skipping Bangkok and heading south to beach resorts like Phuket and Pattaya or north to Chiang Mai, all of which have been spared flooding.

"The public and private sectors have been hit by so many crisis over the years that they are really good at managing it and have the responses worked out to a T," Muqbil said. 

"In Boy Scout terminology, they are perpetually prepared and ready with the response and recovery drill the moment it is necessary."

International tourist arrivals at Suvarnabhumi Airport, Bangkok's international gateway, were up 6.7 percent in October over last year, according to the Tourism Authority of Thailand. Arrivals at Phuket's airport were up 28.5 percent for the same period.

Most international airlines were still operating normally to Bangkok, while domestic airlines have been adding flights due to strong demand from people heading to other parts of the country not affected by the flooding, said Andrew Herdman, director general of the Association of Asia Pacific Airlines.

he floods will obviously have some effect on tourism, but the recovery will be quick -- perhaps as short as a month, said Martin J. Craigs, CEO of the Pacific Asia Travel Association.

"Resilience is built into the DNA of Thai tourism," he said.

Craigs and several others in the industry mentioned that some of the "disaster movie" images going out to the world were not an entirely accurate reflection of the situation on the ground. 

He said photos of planes sitting in floodwater at Don Muang airport gave the impression that both of Bangkok's airports were closed.

"Frankly its all down to the old expression: If it bleeds it leads. In this case, if it leaks it leads," he said.

While many key tourist sites and downtown areas are still dry, vast parts of the northern and western outskirts have been turned into inland lakes, submerged by fetid floodwater that have led to calls for the evacuation of 12 of the city's 50 districts.

Tourism Authority of Thailand Governor Suraphon Svetasreni said his agency was working hard to get the word out that Thailand was still very much open for business. He said he hoped the disaster would affect international arrivals by only 2 percent.

While specific numbers are yet to be calculated, the floods "have affected the number of bookings in Bangkok for sure," said Sakkarin Thorsawai, the director of the Thai Hotels Association.

Joey Tulyanond, owner of the Old Bangkok Inn and the soon to open Bangkok Tree House hotel, said "maybe about 80 percent of our guests have canceled even though neither of our properties has seen a single drop of floodwater."

At Soul Food Mahanakorn in Bangkok's trendy Thong Lor neighborhood, owner Jarrett Wrisley said he felt lucky to still have a restaurant that was dry and operating when so many others in Thailand had lost everything.

He said his business was off 60 to 80 percent last week, but it has already started to bounce back.

"Thailand, for the past several years, has been in this strange cycle of crisis and rebirth, and I suspect that the country will rebound in a few months," he said. "But first we have to put the pieces back together."

Suvarnabhumi Airport & Travel Warnings

Travel Warnings

“There have been cancellations from the leisure and corporate segments as well as events business,” he said. “Some local businesses have canceled events due to the fact that many of them have been affected directly with their own or their families’ homes being flooded.”

Group tours to Bangkok, particularly from China and Hong Kong, have been canceled following travel warnings, said the Tourism Council’s Piyaman. European groups are generally choosing to visit unaffected areas of Thailand, she said. Australia, China, Japan, Singapore and the U.K. are among nations that have advised against non-essential travel to Bangkok or other parts of Thailand.

Passengers are down a lot,” Piyasvasti Amranand, president of Thai Airways International Pcl (THAI), said at the Seoul conference. “No one wants to come to Thailand with travel warnings issued by so many countries.”

The floods have “affected badly” All Nippon Airways Co.’s operations, said Chief Executive Officer Shinichiro Ito.

Suvarnabhumi Airport

Bangkok’s main international airport, Suvarnabhumi, is protected by a 3.5-meter-high flood barrier, and has remained open throughout the flooding. The domestic airport at Don Mueang was shut on Oct. 25 as floodwaters covered the runway and began seeping into the terminal buildings.

Authorities last month released more than 9 billion cubic meters of water down a river basin the size of Florida, with Bangkok at the bottom after monsoon rains filled dams north of Bangkok to capacity. Rainfall this year has exceeded the average by about 40 percent, according to government data.

Airlines and hotels are hoping that that travel demand may rebound later in the month and into December as floods ease and as the end of year holidays approach. Shangri La, Bangkok and Swissotel Nai Lert Park both said they were optimistic that bookings may pick up, even if they fall short of predictions made earlier in the year.

Cathay’s Slosar also said the airline was hoping the disruptions will end before Christmas and the New Year, when flights are usually fully booked.

“You will find people going back,” said Tan Chik Quee, Singapore Airlines’ senior vice president of marketing. “We don’t expect to see any problem toward the year-end holidays.”

Thailand Floodwaters Threaten Bangkok Industry

Thai people paddle past a Toshiba factory partially-submerged at Bangkadi Industrial Park in Pathum Thani province on October 21, 2011.

Thai floodwater today will test barriers protecting two Bangkok industrial parks near the main international airport as a deluge that has swamped hundreds of factories over the past month courses through the capital.

A water mass north of Bangkok should reach Lat Krabang and Bang Chan industrial zones in the eastern part of the city, according to Jate Sopitpongstorn, a spokesman for the Bangkok Metropolitan Administration. The estates include a factory operated by Honda Motor Co., which abandoned its full-year profit forecast last week after another factory was flooded.

“The water will be there for sure,” Jate said by phone yesterday. “Lat Krabang has a high potential for flooding, but we hope the protection we put inside, 3 meters high, can protect and hold the water.”

The renewed threat to factories may worsen the impact of floods that have prompted the central bank to slash its 2011 economic growth forecast and disrupted global supply chains. Floodwaters edged closer to Bangkok’s central business district at the weekend, reaching the northernmost station on the city’s elevated rail system.

“The amount of water is massive,” Prime Minister Yingluck Shinawatra said after visiting a flooded district on the city’s outskirts yesterday. “It may take two to three weeks for the water to drain to the sea, so we are asking people to be patient.”

Floodwaters have already inundated seven industrial estates with 891 factories that employed about 460,000 people, according to the Thai Industrial Estate and Strategic Partners Association. Lat Krabang, 10 kilometers (6.2 miles) north of Suvarnabhumi airport, houses 231 factories employing 48,000 workers, including those operated by Unilever, Isuzu Motors Ltd. and Cadbury Plc.

Factories ‘At Risk’

“The enormous amount of water that you see still on the satellite maps north of Bangkok has to flow in one way or the other around the city,” said Adri Verwey, a specialist with Deltares, a Netherlands-based research institute, who is advising the government. “It will move on to a considerable depth around these estates. They are very much at risk.”

Suvarnabhumi and public transport links are still operating as normal. The airport’s perimeter is protected by a 3.5-meter- high dike, Airports of Thailand Pcl said last week.

The Thai capital is facing a dual threat from floodwaters from the north and angry residents intent on tearing down defensive walls, Yingluck said yesterday. The government finished the construction of a “big bag dike” consisting of large sandbags that should stem the flow of water into northern parts of the capital, she said.

Evacuations

“People still see water because we try to slow down its flow to make it drain through canals,” Yingluck said yesterday. “There are two main tasks now. First is managing water and the second is to take care of three million people who are affected.”

Waters more than a meter deep have moved south through Bangkok, forcing Yingluck last week to evacuate her flood operations command at Don Mueang airport, which sits on the city’s northern edge and mostly handles domestic flights. The government has ordered evacuations in 30 percent of the capital’s 50 districts, mostly northern, eastern and western areas.

City officials are aiming to halt the water’s advance at the Sam Sen canal, which runs just above Victory Monument, a major traffic intersection northeast of the city center and a stop on Bangkok’s elevated railway network known as the Skytrain, Jate said. The central business areas of Silom and lower Sukhumvit are protected by two canals where water can be drained out through the Chao Phraya river, he said.

‘Hope’

“We still have hope that the inner city central business district will not be affected at the moment,” Jate said.

The Bank of Thailand, which last month slashed its 2011 economic growth forecast to 2.6 percent from 4.1 percent, expects expansion to slow as the global economy weakens and the impact of the nation’s flood crisis increases, according to the minutes of its Oct. 19 meeting.

Rehabilitation efforts have begun in parts of Nakhon Sawan province and will start soon in Ayutthaya as flood waters recede, Yingluck said Nov. 5. The government has an initial budget of more than 100 billion baht ($3.3 billion) to help rebuild damaged areas, she said, adding that Cabinet will discuss new measures to help the economy recover on Nov. 8.

The disaster worsened last month, when rainfall about 40 percent more than the annual average filled dams north of Bangkok to capacity, prompting authorities to release more than 9 billion cubic meters of water down a river basin the size of Florida, with Bangkok at its southern tip.

Flooding this year has affected 64 of Thailand’s 77 provinces, damaging World Heritage-listed temples in Ayutthaya province, destroying 15 percent of the nation’s rice crop and flooding the homes of almost 15 percent of the country’s 67 million people, according to government data.

The Big Dry follows the Big Wet

The city's economy is suffering after entertainment venues are hit by declining numbers of patrons and face booze supplies that are quickly drying up.

Across the clubs, pubs and tourist areas of the city the message is the same _ as beer supplies begin to dwindle, so too does the number of revellers that help keep the financial lifeblood of Bangkok pumping.

WHERE HAVE ALL THE PUNTERS GONE?: Patpong Road has far fewer visitors than usual. An empty Irish pub around Silom Road, below left. A jazz concert at the Sheraton Grande Sukhumvit goes ahead, but fewer people are in attendance than usual, below right.

"There's definitely a drop in revenues," said Denis Hemakom, manager of the popular Q Bar nightclub on Sukhumvit Soi 11. "Almost all the local population are gone; we're living off tourists now. I'd say [sales are] maybe 30% [of normal] overall. Our good nights are still pretty good, but our slow nights are very, very slow."

The impact of the floods on tourism and entertainment venues is no small beer to the government. Thailand is likely to lose about 15-25 billion baht in tourism revenues this year as the number of travelers drops because of the floods, according to the Kasikorn Research Centro, even if Suvarnabhumi airport, entry point for 70% of arrivals, continues to function normally.

Tourism Minister Chumpol Silpa-archa said arrivals could be up to one million below the government's target of 19 million this year. The tourism industry employs more than two million people and accounts for 6% of GDP.

A visit by Spectrum last week to Silom Road, normally bustling with revellers, showed many empty bars and restaurants. A waitress at the nearly empty Molly Malone's, an Irish pub on Soi Convent, commented that they had plenty of beer but no customers or water.

The part owner and manager of another popular pub nearby said they had virtually no patrons over the past three weeks due to concerns over safety.

We don't know whether to applaud the government for handling the situation well or criticise it for overreacting and scaring people away," he said.

Beer deliveries have been unreliable due to transport problems; however, he added that the situation was now improving.

"We asked for 10 barrels, but I suspect we'll get one or two. But still, that's better than nothing."

He said that breweries still had stock, and it was still possible to buy bottled beer from supermarkets, although his staff were worried they might have to start selling large bottles of beer as small ones become scarce.

Breweries have indicated they are reducing production as a result of declining demand due to the temporary closure of major distribution centres in flooded areas.

Chatchai Wiratyosin, marketing director at Singha Corporation, said production of Singha draught beer has reduced slightly, resulting in a modest decline of beer stocks at pubs and bars.

However, even if the company's brewery in Pathum Thani is submerged by the floods, Singha's brewery in Khon Kaen has sufficient capacity to serve demand, he said. Nevertheless, Singha might have problems transporting beer from Khon Kaen to Bangkok as many roads are now impassable.

Sorrakit Lathitham, an executive at Thai Beverage, brewer and distributor of Chang beer, said that many breweries faced not only product shortages but a decline in consumption. However, the company was still able to make deliveries.

Heineken, meanwhile, is slowing production as some of its customers' distribution centres close due to the floods. These include Tesco Lotus, Big C, Tops and 7-Eleven.

One Heineken executive, who asked not to be named, said the company's production and inventory of raw materials had not yet been affected by the floods. But it started reducing production last week due to shrinking orders. Heineken has a production capacity of two hundred million litres of beer per year.

Nevertheless, Heineken was preparing for a worst-case scenario, the source said, with the possibility of importing beer from neighbouring production facilities. In Asia, the company has breweries in Malaysia, Singapore, Vietnam, Indonesia and China.

Patpong Road last week had many empty bars but no shortage of men touting "ping-pong" shows and "full body" massages. The problem for them is one of demand rather than supply, although many bar girls have returned to the provinces, said one manager.

"Stick" of Stickmanbangkok.com, a popular website keeping tabs on the capital's seedy underbelly, told Spectrum that "Halloween [last Monday] is usually a big night but this year it was the worst in memory with fewer staff in the bars and even fewer customers. Generally, trade seems to be down and some bars have run low on certain products, notwithstanding that customary numbers are down, as are sales."

On Silom Soi 11, Bed Supperclub went ahead with its Halloween party and the turnout for a Monday night was quite good.

Mr Hemakom, on the other hand, said that Q Bar's Halloween party was cancelled. They were experiencing some beverage shortages, mainly of Singha soda water and Coca-Cola, though these have now eased.

He also commented on the cost of sandbags and flood safety preparations. "We spent good money raising electronics off the ground floor.

"The main effect has been on the customer though," he added.

"For the most part, I think the effect has been on the confusion people have over whether or not flooding is coming. It puts a downer on the party mood when you think your house might be underwater."

A centrally located five-star hotel's public relations manager told us that at this time of year they would normally expect full occupancy, but that numbers were down significantly with many cancellations. "Luckily, half our clientele are business travellers, and business for them has to continue regardless."

Concert promoters are also feeling the pain. At the time of writing, David Foster's Oct 31 concert was cancelled. Yesterday's Jason Mraz concert was cancelled. Tuesday's X Japan concert at Impact Arena, however, and Pitbull's Nov 28 concert, are going ahead. The World Film Festival of Bangkok has been postponed until Jan 20.

Sukhothai's famous Loy Krathong festival will go ahead this week but the Royal Flora Ratchaphruek Fair 2011 in Chiang Mai has been postponed until Dec 16.

Countless events and promotions have had to be rescheduled or dropped, as residents flee and travel advisories discourage visitors.

Kittitouch Srivimolwattana of Universal Music, Thailand, said the music industry was "definitely affected by the flood crisis. Many of our stores have closed and of course sales have dropped. That's the key factor really while consumers are more concerned about the floods than our new releases.

Passenger numbers dive at main airport

The severe flooding coupled with foreign governments' advisories against travel to Thailand has begun to take its toll on passenger traffic through Suvarnabhumi airport.

Passenger numbers at Bangkok's main airport started to decline during the last week of October, falling by 7% year-on-year, and the decline is likely to become more pronounced as flooding problems intensify, scaring more international travelers away.

"The drop-off in passenger numbers started on Oct 25 after holding steady over the previous 24 days," said Somchai Sawasdeepon, a senior executive vice-president of Airports of Thailand Plc (AoT).

Before the deluge began affecting Bangkok, Suvarnabhumi was handling about 130,000 passengers on 800 flights per day.

Airline executives have also begun to see falling bookings and cancellations for travel to the country, where flooding is being perceived internationally as on the same scale as Hurricane Katrina that hit New Orleans in 2005, thereby fostering fear.

Several carriers have already slashed their frequencies through Bangkok, and further cutbacks are looming on the horizon.

Cathay Pacific has reportedly halved its Bangkok- Hong Kong service to two flights a day, while Orient Thai Airlines has suspended its daily flight on the same route covered by a Boeing 747 jumbo jet.

The moves come as more Hong Kong tourists cancel their journeys in the wake of their government raising its travel advisory bar for Thailand to "red".

"We are witnessing a virtual standstill of traffic from North and East Asia _ China, Japan, South Korea and Hong Kong," Udom Tantiprasongchai, the founder of Orient Thai Airlines, which concentrates on that region, told the Bangkok Post.

The flag carrier Thai Airways International (THAI) is pondering a similar move, possibly cutting back service on some routes such as to Colombo and Hat Yai, said an airline official.

Suspension of the Bangkok-Athens route is also being considered, but that is due mostly to the economic crisis in Greece.

Mr Somchai of AoT conceded it would be difficult to woo back traffic.

"The message we're trying to put across is that not all of Thailand has been flooded. Tourists can still use Suvarnabhumi to hop over to their favorite destinations such as Phuket and Chiang Mai, which are flood-free," he said.

AoT is also trying to dispel the grave perceptions abroad that Suvarnabhumi is next in line to be flooded after Don Mueang airport was forced to close a week ago.

"We're highly confident that our flood protection will prevent any halt to the operation of Suvarnabhumi," said Mr Somchai.

He added that experts from Japan and Germany endorsed that statement after inspecting the flood protection barriers just days ago.