Thailand tourism sector could shed up to 200,000 jobs this year, with street battles in Bangkok triggering mass cancellations, industry experts say.
The anti-government red-shirt demonstrations which resulted in the army moving in and two of deaths and over 60 injured on the streets led to a number of countries, including the UK, US, France and Australia, advising nationals not to travel to Thailand.
Apichart Sankary, president of the Association of Thai Travel Agents, said that television images beamed around the world of troops firing volleys of gunfire to disperse protesters had alarmed potential visitors.
'Lay-offs are inevitable. We may lose up to 200,000 jobs this year if the situation is not resolved,' he said. Not only have tourists been frightened, they have been unable to shop and visit popular sites.
Thailand's tourism industry accounts for 5% of gross domestic product and employs two million people, up to 7% of the country's total workforce. The industry has already been worn down by the SARS epidemic in 2003, the 2004 Asian tsunami, a 2006 coup and last year's closure of Bangkok's two airports and other regional airports by a separate protest movement.
Continued instability will wreak more havoc on the tourism sector and the property sector as potential property investors view Thailand as too risky and unable to generate rental income from foreign visitors.
'The question is how far and how long this situation will go on? The declaration of the state of emergency and the issuance of travel advisories by other countries can be very detrimental,' said Robert McIntosh, a specialist in the hotel sector with property consultancy CB Richard Ellis.
According to John Koldowski of the Pacific Asia Travel Association, the damage could be long-lasting. 'The longer this uncertainty continues, the more businesses will close and more people will be laid off not just in the travel and tourism industry but across the board,' he said.
In a report released this month, the World Bank said Thailand's economy is expected to contract 2.7% this year from a growth of 2.6% in 2008. It said that 'significant downside risks remain', including the threat of political instability.
