Thailand's hotel industry is not expected to recover by the start of the high season in October if martial law remains in effect, says the Thai Hotels Association (THA).
A worker puts the finishing touches on a signboard for the Thailand Happiness Street Festival, a two-day fair that ends today at the Ratchaprasong intersection. The military junta is also the organiser of the week-long happiness party at Sanam Luang that will end tomorrow. PATIPAT JANTHONG
President Surapong Techaruvichit said average hotel occupancy nationwide would this month improve by only 10% over June's figure.
Occupancy is expected to reach 85% at resort destinations in the fourth quarter if the National Council for Peace and Order (NCPO) lifts martial law to build a positive tourist environment.
Last month, the THA reported the average occupancy rate in Bangkok fell by 25 percentage points to 50%, while the rate for hotels in eastern Thailand declined by 60 percentage points to only 23%, in the West by 9 percentage points to 42%, in the South by 26 percentage points to 48% and on Koh Samui by 10 percentage points to 58%.
Only hotels in northern Thailand did not record a drop, recording flat growth in occupancy at 55%, the same figure as in June 2013.
"The key factor for the hotel business is lifting martial law, at least in resort destinations such as Phuket, Krabi, Koh Samui, Hua Hin and Cha-am. Martial law is influencing tour groups' decisions to visit Thailand," he said.
If martial law is lifted before October in these destinations, hotels will recover in the fourth quarter with average occupancy of 85%, close to the usual figure of 90%.
Mr Surapong said even lifting martial law only in resort destinations would foster positive sentiment for Bangkok's tourism.
The NCPO is trying to restore tourist confidence, lifting the night curfew a month ago.
The Tourism Authority of Thailand has teamed up with four local insurance companies to offer travel insurance featuring attractive premiums to help those tourists who still want to visit Thailand but cannot buy travel insurance from foreign firms due to travel advisories.
The THA said the insurance product would benefit independent travellers more than it would group tours or the meetings, incentives, conventions and exhibitions industry.
Local political tensions have affected Thai tourism since last year's fourth quarter, and the situation worsened in the second quarter due mainly to the May 22 coup.
The THA hopes the more stable politics will be a light at the end of the tunnel for the industry.
The political conflict caused some tourism operators to go out of business due to poor financial liquidity, but hotels are more of a long-term business and so did not suffer any closures.
Most hoteliers will face losses in the second and third quarters but hope for sustainable growth in the medium and long terms, with the military in control of the country for the foreseeable future, Mr Surapong said.
"We're seeing various actions by the junta aimed at helping to solve tourism problems," said Mr Surapong.
He said the "Phuket model", which purports to clamp down on the taxi mafia and other scams and clean up the beaches on the island, was a good start and should be applied to other destinations.
This would help to upgrade Thailand's tourism reputation in the long run, Mr Surapong said.
Moreover, tourism law enforcement should be stepped up and amended to cope with changes in the tourism industry, he added.