Thai Tourism And Credit Ratings Both Hit By Unrest

[webfact]

Tourism and credit ratings both hit by unrest

By Suchat Sritama,

Wichit Chaitrong

The Nation

BANGKOK: -- Forty-three countries have issued travel advisories to their citizens following the declaration of a state of emergency in Bangkok on Thursday. The damage is estimated at over Bt10 billion as shopping malls closed doors and foreign clients at hotels in the Rajprasong area were scared away by anti-government protesters.

As political instability is threatening the economy, Japan Credit Rating downgraded Thailand's local currency long-term senior debt rating to "A" from "A+", reflecting the view that political and social conflict and unrest have started undermining the country's economic growth and public finances.

The rating outlook is negative as the protracted political and social unrest is caused by deep-rooted and complicated issues the country confronts, which may not be solved in a short period of time, JCR said in a statement.

Chakkrit Parapuntakul, director-general of the Public Debt Management Office, said representatives from Moody's Investors Service, the US-based credit rating agency, would meet Finance Ministry officials next month to conduct a review of Thailand's credit rating. While admitting that political factors would be the most important issue for the review, he is optimistic that the rating can be upgraded.

"If we can explain that our economy still expands despite political uncertainty, the credit rating agency may upgrade our credit rating to "A-", he said. Currently Thailand's sovereign credit rating by Moody's is "BBB+".

According to Prakit Piriyakiet, deputy governor for marketing communications at the Tourism Authority of Thailand (TAT), Saudi Arabia, the United Arab Emirates, Latvia and Spain have lifted travel warnings to the top level, banning citizens from going to Thailand, while China and Poland raised the warning level.

Latvia and Spain lifted their travel advisories from the third to the fifth level, advising their citizens against entering Bangkok. Poland also adjusted the level from second to fourth.

Of all 43 countries, only South Korea put the warning at the lowest level, simply calling on its citizens to stay alert. Thirteen countries' warning is in the second level - "exercise caution"; 15 in the third level - "high degree of caution"; and 10 in the fourth level - "reconsider need of travel".

The Thai Hotels Association (THA) yesterday said the sector would be at great peril if the political turmoil continued. Hotels in the Rajprasong area are expected to show very low occupancy rates during the Songkran Festival due to the cancellations of Asian tourists.

At least six overseas meetings and exhibitions have been cancelled while seven events were postponed.

TAT Governor Suraphon Svetasreni is optimistic that despite the disappearance of Asian tourists during the water festival, long-haul tourists, particularly from Europe, would continue to come to Thailand.

Tourism and Sports Minister Chumpol Silapa-archa was also adamant that the impact was not as severe as claimed by private operators. He was upbeat because tourist arrivals through 30 immigration offices totalled 4.5 million in the first quarter, compared to 3.6 million in the same period last year. In the quarter, tourism spending rose 29 per cent on year to Bt178 billion.

Despite the political chaos, the number of international tourists during April 1-8 also rose 5 per cent on year to 200,231 from 190,812 visitors in the corresponding period last year.

"The overall tourism business is still growing despite the unrest," said Chumpol. He flatly denied reports of massive cancellations during the Songkran Festival.

-- The Nation 2010-04-10

[newsfooter][/newsfooter]

[Gobbledoc]

I just looked up Mood's for a definition, looks like Thailand is on the slippery slide unfortunately. "Moody's judges obligations rated BBB+ as speculative and "subject to high credit risk", and have "generally poor credit quality."

I see a bunch of people saying Thailand tourism only accounts for 6% or 8% of the economy, who am I to disagree, but how much of your tourist dollar is cash dollar, Yes you may get a scribble 'check bin' so they can log how many beers you have had, do you really think it gets declared? That Pad Thai you had for lunch? Think your tuk tuk driver is declaring how much he ripped you off? I think the average tourist would dispose more money each day in cash than many rice farmers put together gross wage. Also, foreign investment is running, I know of 3 companies that have directly effected family members or close friends, that have shut down Thailand operations and opened up in near by countries, leaving hundreds of non tourism related jobs behind and leaving a lot of corrupt tea money collectors looking for their next victim. 'mai pen rai'

I feel that pulling tourism in Thailand, would make more than a 8% impact on the country, it's an experiment I think they are trying by the looks of it unfortunately.

Edited April 10, 2010 by Gobbledoc

[Tejas]

I just looked up Mood's for a definition, looks like Thailand is on the slippery slide unfortunately. "Moody's judges obligations rated BBB+ as speculative and "subject to high credit risk", and have "generally poor credit quality."

I see a bunch of people saying Thailand tourism only accounts for 6% or 8% of the economy, who am I to disagree, but how much of your tourist dollar is cash dollar, Yes you may get a scribble 'check bin' so they can log how many beers you have had, do you really think it gets declared? That Pad Thai you had for lunch? Think your tuk tuk driver is declaring how much he ripped you off? I think the average tourist would dispose more money each day in cash than many rice farmers put together gross wage. Also, foreign investment is running, I know of 3 companies that have directly effected family members or close friends, that have shut down Thailand operations and opened up in near by countries, leaving hundreds of non tourism related jobs behind and leaving a lot of corrupt tea money collectors looking for their next victim. 'mai pen rai'

I feel that pulling tourism in Thailand, would make more than a 8% impact on the country, it's an experiment I think they are trying by the looks of it unfortunately.

The 6-8% figure is bogus like most official figures. Why? Too many reasons to talk about here and who cares anyway...the figure is way too low and does not reflect reality on the ground and the network of businesses impacted by tourism.

On another note:

TAT Governor Suraphon Svetasreni is optimistic that despite the disappearance of Asian tourists during the water festival, long-haul tourists, particularly from Europe, would continue to come to Thailand.

Tourism and Sports Minister Chumpol Silapa-archa was also adamant that the impact was not as severe as claimed by private operators. He was upbeat because tourist arrivals through 30 immigration offices totalled 4.5 million in the first quarter, compared to 3.6 million in the same period last year. In the quarter, tourism spending rose 29 per cent on year to Bt178 billion.

Despite the political chaos, the number of international tourists during April 1-8 also rose 5 per cent on year to 200,231 from 190,812 visitors in the corresponding period last year.

"The overall tourism business is still growing despite the unrest," said Chumpol. He flatly denied reports of massive cancellations during the Songkran Festival.

How do they come up with this nonsense? Does any person really believe this? I think they are smoking something over there.

[Microwave]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

[sbk]

Off topic pointless post removed.

[cdmtdm]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

its pegged to the us dollar ..... and heavily propped up by the govt ......

[mommysboy]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

The official line is that Thailand is growing in leaps and bounds and has sound finances. It is said tourism is unimportant. The baht has strengthened because of substantial inward investment creating even more demand for the currency.

It's a mystery to me, all I can see is less demand, and a general deterioration.

[simpathy]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

rice people are being paid to protest! a lot of noise, thats all it is.

[kuffki]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

Just once again proves that BOT is controlling the baht.

If people are advised not to go to Thailand, i really have hard time believing that investors are rushing over to invest.

[jucel]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

its pegged to the us dollar ..... and heavily propped up by the govt ......

a misconception that the baht is pegged to the dollar. This has not been the case since george soros and his hedge fund company had a run on the baht in 97. google thai baht/hedge funds for further info. Furthermore im pretty sure that Thailand has caps on the amounts traded per day + hedge funds are not allowed to participate in speculation on the baht. Finally the only other factor is repatriation of money to thailand to fund certain political movements etc

[astral]

The dollar peg was denied as far back as 1985..............

"we have a basket of currencies...." was what they said.

I was reminded of the old adage of not putting all your dollars (eggs) in one basket..........

[LuckyLew]

I can see foreigners now ... calling travel agents to book a flight to Thailand

Just wanna be where the action is

[catmac]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

The official line is that Thailand is growing in leaps and bounds and has sound finances. It is said tourism is unimportant. The baht has strengthened because of substantial inward investment creating even more demand for the currency.

It's a mystery to me, all I can see is less demand, and a general deterioration.

I think that you will find that most of the "substantial inward investment" is simply overseas traders gambling on the Thai stock exchange (I seem to remember reading somewhere that the SET index has risen some 88% this year). Of course, this is just hot money, and at the first sign of a market downturn it will fly out of Thailand post haste!

Real inward investment (in factories, hotels, etc.) that can give Thailand a real boost for the future, would appear to have dried up thanks to the present uncompetetive Baht exchange rate, indeed, I would not be suprised to hear that there was actually a dis-investment in that field. It all looks strangely similar to the scenario prior to the last collapse of the Baht, one huge speculative bubble just waiting to burst.

[TheItaliann]

Of all 43 countries, only South Korea put the warning at the lowest level, simply calling on its citizens to stay alert. Thirteen countries' warning is in the second level - "exercise caution"; 15 in the third level - "high degree of caution"; and 10 in the fourth level - "reconsider need of travel".

zzzzzzzzzzzzzzzzz

[kuffki]

I just looked up Mood's for a definition, looks like Thailand is on the slippery slide unfortunately. "Moody's judges obligations rated BBB+ as speculative and "subject to high credit risk", and have "generally poor credit quality."

I see a bunch of people saying Thailand tourism only accounts for 6% or 8% of the economy, who am I to disagree, but how much of your tourist dollar is cash dollar, Yes you may get a scribble 'check bin' so they can log how many beers you have had, do you really think it gets declared? That Pad Thai you had for lunch? Think your tuk tuk driver is declaring how much he ripped you off? I think the average tourist would dispose more money each day in cash than many rice farmers put together gross wage. Also, foreign investment is running, I know of 3 companies that have directly effected family members or close friends, that have shut down Thailand operations and opened up in near by countries, leaving hundreds of non tourism related jobs behind and leaving a lot of corrupt tea money collectors looking for their next victim. 'mai pen rai'

I feel that pulling tourism in Thailand, would make more than a 8% impact on the country, it's an experiment I think they are trying by the looks of it unfortunately.

The 6-8% figure is bogus like most official figures. Why? Too many reasons to talk about here and who cares anyway...the figure is way too low and does not reflect reality on the ground and the network of businesses impacted by tourism.

On another note:

TAT Governor Suraphon Svetasreni is optimistic that despite the disappearance of Asian tourists during the water festival, long-haul tourists, particularly from Europe, would continue to come to Thailand.

Tourism and Sports Minister Chumpol Silapa-archa was also adamant that the impact was not as severe as claimed by private operators. He was upbeat because tourist arrivals through 30 immigration offices totalled 4.5 million in the first quarter, compared to 3.6 million in the same period last year. In the quarter, tourism spending rose 29 per cent on year to Bt178 billion.

Despite the political chaos, the number of international tourists during April 1-8 also rose 5 per cent on year to 200,231 from 190,812 visitors in the corresponding period last year.

"The overall tourism business is still growing despite the unrest," said Chumpol. He flatly denied reports of massive cancellations during the Songkran Festival.

How do they come up with this nonsense? Does any person really believe this? I think they are smoking something over there.

Agree official figures are usually far off mark, so lets do the maths

There are 16-18 million tourist every year.

Each one on average spends $1000 on food, shopping, taxi's clubs, girls etc

Each one on average spends $1000 on accomodation

At least half use Thai Airways and average ticket price $1000

So now we have approx $40 000 000 000 per year from tourism

PS. All figures are approx and assumptions just to give an idea.

According to my approx estimation its 15.3% of the GDP

Source of GDP http://www.gfmag.com/gdp-data-country-repo...try-report.html

I think the reason for baht strength is still the resevers which are still at $138 000 000 000

[fredob43]

Of all 43 countries, only South Korea put the warning at the lowest level, simply calling on its citizens to stay alert. Thirteen countries' warning is in the second level - "exercise caution"; 15 in the third level - "high degree of caution"; and 10 in the fourth level - "reconsider need of travel".

zzzzzzzzzzzzzzzzz

read the daily mail, (English paper) the other day. And they were advising peep's not to come. And were recomending other place's to go. There word's, why go when there might/are problem's, when you can go to place's where there's none. Pretty obvious realy. Tourist's are down no matter what TOT say's

[AZBill]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

The official line is that Thailand is growing in leaps and bounds and has sound finances. It is said tourism is unimportant. The baht has strengthened because of substantial inward investment creating even more demand for the currency.

It's a mystery to me, all I can see is less demand, and a general deterioration.

I believe that if all this nonsense continues the baht bubble is going to burst and bust big. Political instability and a strong currency never go hand in hand.

[AZBill]

I can see foreigners now ... calling travel agents to book a flight to Thailand

Just wanna be where the action is

The US State Department issued a new travel advisory yesterday with all the relevant warnings, but also said travel to Thailand was "generally safe." When Im in the US the news always makes things seem worse than what I experience in Thailand. Unfortunately many will not see it that way and will stay home or travel elsewhere. I always check for reports from those on the ground to get the real scoop before I come.

[beejoir]

I can see foreigners now ... calling travel agents to book a flight to Thailand

Just wanna be where the action is

The US State Department issued a new travel advisory yesterday with all the relevant warnings, but also said travel to Thailand was "generally safe." When Im in the US the news always makes things seem worse than what I experience in Thailand. Unfortunately many will not see it that way and will stay home or travel elsewhere. I always check for reports from those on the ground to get the real scoop before I come.

Seems like its going to be hard for anyone landing to get to Koh Sarn Road today...... wonder whats going to happen there?

[hardy1943]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

The official line is that Thailand is growing in leaps and bounds and has sound finances. It is said tourism is unimportant. The baht has strengthened because of substantial inward investment creating even more demand for the currency.

It's a mystery to me, all I can see is less demand, and a general deterioration.

I agree with you,

One day it will collapse like it did before because of their own doing.

Remember the still blame George Soros for the 1990th financial crisis

but never themselves.

[djayz]

I just looked up Mood's for a definition, looks like Thailand is on the slippery slide unfortunately. "Moody's judges obligations rated BBB+ as speculative and "subject to high credit risk", and have "generally poor credit quality."

I see a bunch of people saying Thailand tourism only accounts for 6% or 8% of the economy, who am I to disagree, but how much of your tourist dollar is cash dollar, Yes you may get a scribble 'check bin' so they can log how many beers you have had, do you really think it gets declared? That Pad Thai you had for lunch? Think your tuk tuk driver is declaring how much he ripped you off? I think the average tourist would dispose more money each day in cash than many rice farmers put together gross wage. Also, foreign investment is running, I know of 3 companies that have directly effected family members or close friends, that have shut down Thailand operations and opened up in near by countries, leaving hundreds of non tourism related jobs behind and leaving a lot of corrupt tea money collectors looking for their next victim. 'mai pen rai'

I feel that pulling tourism in Thailand, would make more than a 8% impact on the country, it's an experiment I think they are trying by the looks of it unfortunately.

The 6-8% figure is bogus like most official figures. Why? Too many reasons to talk about here and who cares anyway...the figure is way too low and does not reflect reality on the ground and the network of businesses impacted by tourism.

On another note:

TAT Governor Suraphon Svetasreni is optimistic that despite the disappearance of Asian tourists during the water festival, long-haul tourists, particularly from Europe, would continue to come to Thailand.

Tourism and Sports Minister Chumpol Silapa-archa was also adamant that the impact was not as severe as claimed by private operators. He was upbeat because tourist arrivals through 30 immigration offices totalled 4.5 million in the first quarter, compared to 3.6 million in the same period last year. In the quarter, tourism spending rose 29 per cent on year to Bt178 billion.

Despite the political chaos, the number of international tourists during April 1-8 also rose 5 per cent on year to 200,231 from 190,812 visitors in the corresponding period last year.

"The overall tourism business is still growing despite the unrest," said Chumpol. He flatly denied reports of massive cancellations during the Songkran Festival.

How do they come up with this nonsense? Does any person really believe this? I think they are smoking something over there.

I assume many of the people entering the country throught the 30 immigration offices he mentioned are ex-pats living here and re-entering the kingdom / coming back from a visa-run. The numbers are distorted. It would be interesting to know how many of these "tourists" are real tourists and how many are actually living here. I am one of these 200,231 "tourists" who entered Thailand in early April.

[djayz]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

its pegged to the us dollar ..... and heavily propped up by the govt ......

Because currency traders/speculators speculate that the current problem(s) in Thailand is(are) considered to be short term as opposed to the problems in the EU (specifically Greece and UK; eventually also Spain and Portugal), which cannot be solved in the short term.

[bob6023]

Given Thailand's ugly political and economic situation, why does the baht continue to strengthen?

Thats a darn good question. You would think it would weaken.

Weak bht and less tourists= inflated prices come down, fewer drunks running around sounds good to me.

[thaibeachlovers]

I just looked up Mood's for a definition, looks like Thailand is on the slippery slide unfortunately. "Moody's judges obligations rated BBB+ as speculative and "subject to high credit risk", and have "generally poor credit quality."

I see a bunch of people saying Thailand tourism only accounts for 6% or 8% of the economy, who am I to disagree, but how much of your tourist dollar is cash dollar, Yes you may get a scribble 'check bin' so they can log how many beers you have had, do you really think it gets declared? That Pad Thai you had for lunch? Think your tuk tuk driver is declaring how much he ripped you off? I think the average tourist would dispose more money each day in cash than many rice farmers put together gross wage. Also, foreign investment is running, I know of 3 companies that have directly effected family members or close friends, that have shut down Thailand operations and opened up in near by countries, leaving hundreds of non tourism related jobs behind and leaving a lot of corrupt tea money collectors looking for their next victim. 'mai pen rai'

I feel that pulling tourism in Thailand, would make more than a 8% impact on the country, it's an experiment I think they are trying by the looks of it unfortunately.

The 6-8% figure is bogus like most official figures. Why? Too many reasons to talk about here and who cares anyway...the figure is way too low and does not reflect reality on the ground and the network of businesses impacted by tourism.

On another note:

TAT Governor Suraphon Svetasreni is optimistic that despite the disappearance of Asian tourists during the water festival, long-haul tourists, particularly from Europe, would continue to come to Thailand.

Tourism and Sports Minister Chumpol Silapa-archa was also adamant that the impact was not as severe as claimed by private operators. He was upbeat because tourist arrivals through 30 immigration offices totalled 4.5 million in the first quarter, compared to 3.6 million in the same period last year. In the quarter, tourism spending rose 29 per cent on year to Bt178 billion.

Despite the political chaos, the number of international tourists during April 1-8 also rose 5 per cent on year to 200,231 from 190,812 visitors in the corresponding period last year.

"The overall tourism business is still growing despite the unrest," said Chumpol. He flatly denied reports of massive cancellations during the Songkran Festival.

How do they come up with this nonsense? Does any person really believe this? I think they are smoking something over there.

Agree official figures are usually far off mark, so lets do the maths

There are 16-18 million tourist every year.

Each one on average spends $1000 on food, shopping, taxi's clubs, girls etc

Each one on average spends $1000 on accomodation

At least half use Thai Airways and average ticket price $1000

So now we have approx $40 000 000 000 per year from tourism

PS. All figures are approx and assumptions just to give an idea.

According to my approx estimation its 15.3% of the GDP

Source of GDP http://www.gfmag.com/gdp-data-country-repo...try-report.html

I think the reason for baht strength is still the resevers which are still at $138 000 000 000

While I don't have the figures, how many of those 16- 18 million are just tourists doing visa runs being counted for every border crossing, Malaysians coming up to hat Yai for a bit of weekend nookie, Asians on package tours that contribute nothing of real value to LOS etc etc?

Not to deny that farangs contribute a lot more than officially counted, but I'd like to see the real figures for tourism.