Bangkok - As insurgent bombings in Thailand’s southern provinces increasingly target tourist areas and oil prices continue to soar, industry operators are worried over the harmful effects on the corporate travel market.
Former finance minister, Mr Virabongsa Ramangkura, recently told reporters because of the April 3 bombings in the southern city of Hat Yai, he had slashed his 2005 national economic growth projection from seven per cent to five per cent.
He added the Hat Yai bombings at the airport, a hotel and a department store that killed two and injured 69, including four overseas tourists, would affect investor confidence more severely than oil price increases.
“Terrorism is the most important factor facing the economy. It will disrupt investment as investors lose confidence.” He estimated a further decrease of one per cent if oil prices remained above US$50 per barrel.
Grand Hyatt Erawan director marketing, Mr Sammy Carolus, agreed the bombings would have a greater overall impact on corporate travel than oil price hikes. “It is the fear factor, not the fuel factor, which drives travellers away,” he said.
While the Grand Hyatt has not yet seen a drop in corporate guests, he expressed concerns of more serious repercussions if the violence were to spread further into major tourist destinations.
However, some operators feel escalation is unlikely. Carlson Wagonlit general manager, Mr Brian Croucher, said: “The bombings may well bring a stop to corporate travel to the south, but we have not yet seen any signs of a general decline.”
Shangri-La Hotel Bangkok general manager, Mr Adrian Mueller, agreed. “The bombing does impact on the safe image Thailand enjoys. However, I don’t think any Bangkok hotel can claim the situation has impacted their performance so far and forward bookings are as strong as for the past 12 months,” he said.
Nevertheless the security problem in the south has prompted the Shangri-La to place additional emphasis on segments other than corporate travel. “We are spending a considerable amount of time and resources to develop new markets and create new opportunities,” he said.
