Airports and Green Shoots : -22,21% fall in international passengers in may

Airports of Thailand suffered a -22.21% fall in international passenger numbers in May compared with the same month last year.

Airports of Thailand operates six international airports – Suvarnabhumi and Don Muang in Bangkok, plus Phuket, Chiang Mai, Hat Yai and Chiang Rai. It handled 2,252,571 international passengers (embarking, disembarking and transit) in May.

The poor May figures are linked to the political instability in the country which has hit tourism hard, plus the global financial crisis and the Influenza A(H1N1).

It has been a bad year for travel and tourism in Thailand with year-on-year monthly international traffic falls of -17.97% in January, -21.15% in February, -15.47% in March and -12.91% in April. For the first five months, international traffic was down by -17.93% year-on-year. (Moodie)

Another tasty Green Shoots Salad.

Watch out however : AOT wants to hide behind a fog cloud… and is mixing all the data : embarking, disembarking and transit. πŸ˜‰ Still we have -apparently- a valid year on year comparison. We would need the “international arrivals” data… But those data will be published in several months

As for the “political crisis”… well… it was rather in april (with the “revolucion” and the thai army shooting in Bangkok’s streets)…

And you can see the trend is not improving, month after month… Of course the flu doesn’t help (albeit in may, there were no cases in Thailand)… The main explanation is of couse : the crisis.

Less money, more problems lead to less international visitors. It’s Economy 101.

Like we had Peak Exports (last july)… Peak Tourism is behind us… And we won’t see again those levels any time soon.

I wrote it many times : this is not a linear process. The longer the crisis lasts, the uglier the fallouts on the economy will be.

A proof : after several month of hard conditions… the tourism businesses in Thailand are calling for help.

Association of Domestic Travel (ADT), the Thai-Chinese Tourism Alliance (TCTA) and the Thai-Japan Tourist Association (TJTA) complained to the House committee on tourism and sports that the government was not doing enough despite the gravity of the situation.

“There have been empty promises. We just can’t wait for state agencies’ help, and the prime minister must take a leading role,” said ADT president Maiyarat Pheerayakoses. (Nation)

Of course, those lobbyists have the wrong reaction.

To give them “loans” won’t solve the issue ! It’s not a liquidity problem, like they say, just a big, very big demand problem ! Throwing money at those companies won’t help.

They have to downsize, lay off, cut their prices etc.

Too many hotels, too many restaurants, too many “spas (today, virtually all hotels in Thailand are “spas” too, what a joke), too many guides, too many minibus drivers, too many employees, too many of everything etc.

And governments around the world can’t give a bailout to every freaking business sector on this freaking planet !

People don’t want to understand this simple equation.

Too bad for them.

23 Responses to “Airports and Green Shoots : -22,21% fall in international passengers in may”

  1. 1 laurent 17 June 2009 at 5:08 pm

    After 7 years in Thailand, i moved to Cambodia, but i have to go back to my country (France) 3 times a year. I fly with Air France or Thai and i Can tell you that now more than 50% of those flight are transit passengers. Mostly for vietnam , cambodia and lao. Even the Thai flights are full of chinese in transit for east China.In my opinion the fall for real international visitors is between 30-40%. Where are the quality tourists ?

  2. 2 Lothar 17 June 2009 at 6:54 pm

    I have some problems with this numbers. They don’t fit into the other stories. Yesterday on BKK Post there was this interview with the Boss of Thai Oriental in BKK which said that hotel bookings are 20% down worldwide (in his hotel chain) and in THailand it is back to 20% occupany – from 45% which is much different.

    Other numbers do not fit as well. I think we need to see a more detailed report. Which kind of foreigners are not comming here? Is the majority the backpacker who do not stay in insane high priced hotels.

    But without doubt we have to much of everything. Living in Mae Hong Son with it’s 6000 souls there are 4 new hotels last year.
    While you can aways say that is the problem of the investors doing a bad job on market analysis it is a huge problem for the whole society if it happen on a nation wide scope.

    Well they get what they deserve.

    Next i hope to see same messages from arrogant, decadent Dubai. They deserve it even more.

  3. 3 ThaiCrisis 17 June 2009 at 7:08 pm

    Lothar : it’s always dangerous to compare differents sets of data. In the case of the Oriental, there could be obvious reasons : they were very low (-45 %), much more than global tourism in Thailand, so they had time to set new policies (promotions, etc.) to gather new guests… Then they go up to -20 % (which is still bad) etc.
    From my point of view : nothing strange in this.
    Furthermore, as you pointed out, it’s difficult to put on the same level the tourists who go to Oriental, with the global group of tourists who go to Thailand.

    Beyond the statistical disputes, there is one certainty : tourism in Thailand, and in other parts of the world, is going down. And will continue to go down.

    The thai authorities are powerless. The few policies that could reverse a little bit this negative trend, would be too hot from a political point of view (visas, regulations, etc.). So it won’t happen.

    Meanwhile, and eventhough they don’t want to, thousands of tourism orientated businesses will go under. It’s perfectly normal, and healthy.

    And the clowns who wanted to build dozen of 5 stars hotels all over Thailand will eat their hat. Not everybody can win everytime at the casino…

    Read my article… from august 2007 ! Even 2 years ago, this madness was obvious (at least for me). πŸ˜‰

    And this one : october 2007

    To celebrate : i’m going to buy a new condo, and a new car. And I will launch a new 5 stars spa. We don’t have enough spas in Thailand. πŸ˜‰

  4. 4 InPhuket 17 June 2009 at 7:33 pm

    Here in Phuket, specifically Patong, there is an inordinate amount of new hotels in the process of going up. While I have no concrete data, just by driving around, I would say that when the current building is completed the amount of hotel rooms will be easily double what is was two years ago, and this is no exaggeration. There is an entire new 3km road with all new hotels going up. There is no possible way that all of these hotels can maintain even an average of 50% vacancy rate in the high season, and in the low season it is simply abysmal. (except for a few standouts)
    My friends, hold on as we are in for a bumpy ride.

  5. 5 ThaiCrisis 17 June 2009 at 8:20 pm

    InPhuket : yes, as you say : it is obvious. I mean : visible with a simple pair of eyes. But so many people didn’t want to see.

    Investors, companies, banks… Nothing worse than people who want to be blind.

    All those clowns were hooked on a very powerfull drug : wishfull thinking leveraged by past trends and mixed with never ending growth fallacy
    Let’s consider this little imaginary scene :

    -Honey, It feels good to be good. I just discovered that doing business was very easy.

    -Really my love ? Tell me everything.

    -Well, you see data do not lie. Never. It’s mathematics. For the past 5 years, the number of tourists coming to Phuket grew by 5 % every year ! Can you imagine ? !

    -(the woman trying to calculate) : I guess it’s impressive…

    -Yes. It is ! And all those tourists need… hotel rooms, right ?

    -Yes, my sugar cake, I’m following you. They need hotel rooms sure. And restaurants too.

    -You’re right. So, I’m going to build a new hotel ! I don’t have the cash, mai pen rai, banks are here to help us. I showed them the data, the numbers… and they were all very impressed. Like you honey bunny. They agreed to give to my company a loan to build this hotel.

    -Oh cherie, you’re so smart. We are going to be rich !

    -Yes my sexy Green Shoots, indeed business is easy. And Phuket is definitely the place to be ! And it’s not over. Mathematics are adamant : we had 5 millions tourists, last year… So… it means that in 25 years, we will have 50 millions -minimum !- tourists in Phuket ! Good bargain ! So you see darling, it’s only the beginning.
    With our hotel revenues we will build second hotel. And then a third, etc. Do you understand ?

    -Oh baby… that’s sweet. I’m going to tell my sister. 50 millions of tourists per year in Phuket… that’s a lot of mouths to feed. She could start to extend her restaurant. She’s going to need a lof of new chairs.

  6. 6 Lothar 17 June 2009 at 8:26 pm

    First you got this wrong Oriental has a total occupancy number of 20% right now.

    I’m also not sure that Thailand can’t do something against it. Surely not in the short term but in the long term they can.

    From what i see they loose the complete next young generation. I talk to lots of backpackers here and elsewhere (because i’m one of them even now where i crossed my 40th’s). There is not so much that is worth for them to return.

    Prices are too high. Beer and Enterainment more expensive then even in most parts of Europe. Dangerous drug consumption and stupid alcohol rules (stopping at 12 o’clock when the fun just begins). Unfriendly people just trying to rip them off. I mean even the italian taxi drivers are selfless like Jesus when compared to a Phuket Island tuk tuk driver.

    Landscape is a with the exception of a very few islands and the Jungle here in Mae Hong Son/Pai absolute boring. Even the sahara desert is better then the middle of thailand.

    Girls are not cheap here anymore and this is also something which is not attracting backpackers so much.

    But Backpackers are the ones who help you with tourism, they are the returning customers later and most of all they are the ones that spread the word-to-mouth message about favourite destination spots. And they are the best for economy because there money is spread around the people (not going into international hotel chains and imported european steak).

    They could do something to get this people back at the moment they are heading to Vietnam and Laos and helping them to build a fine infrastructure (Infrastructure is the argument why thailand is still the easiest way to travel – try to rent a motor bike in indonesia or malaysia).

    But in there greedyness they decided that only the rich people are good for a maximum rip-off. Bad idea, there are just so few of them and most of them realize soon that this is a 3rd world country when they put a food outside the resort.

    So marketing (with there heart in mind and not the fast cash) would help for the future.

  7. 7 InPhuket 17 June 2009 at 10:32 pm

    Here’s a few ideas, that TC touched upon.
    If you want me to stay in Thailand don’t require me to leave the country every 3 months.
    Don’t make me take 13 hour visa runs in a cramped stinky van with a bunch of less then sober, ashtray-stinging sexpats.
    Don’t force me to buy and extra 30 days in your country just to stay and spend more money.
    Stop giving me the stink-eye at every immigration stop in every Thai airport.
    Allow me the privilege of spending MY money in YOUR country without having to jump through a shit-load of hoops and just maybe things will turn around in a few years.

  8. 8 laurent 17 June 2009 at 11:37 pm

    I agree with you lothar ,they loose already the next young generation. And on the top of that they are loosing the “sex tourists” and the residents. Only a newbee can have fun in lalaland now. I moved to Cambodia one year ago because i was so tired with the thai mental attitude, not because it became expensive. I just come to thailand 3 times a year for flying back to france and i just stay few days to see all my friends. Most of them are stuck in the place waiting to sell their business before leaving to a neighboring country. In Cambodia and in Lao people are very friendly and everything is cheap like it use to be in Thailand years ago. It is just a question of time before all those clowns will sell their benz like in 97. I have waited for that moment for 2 years but finaly i will see it from Phom Penh or Ventiane

  9. 9 antipadshist 18 June 2009 at 2:07 am

    a bit off topic in this thread, but I think this is an interesting info :

    Calls grow to use national reserves

    The Bank of Thailand should loosen its iron grip on the country’s international reserves, much of which are sitting idle, by recycling US$30 billion (Bt1 trillion) because the economy is tanking, a noted economist said yesterday.

    “We need to use the public’s money to stimulate the economy because the government’s revenue is crumbling,” Narongchai Arkasanee said.

    The central bank should spend a portion of its international reserves worth about $120 billion to prop up the sagging economy, he told a seminar in Bangkok on how to tackle the economic downturn…

    While the central bank is doing nothing, the baht could strengthen to 33 to the US dollar, which would strangle Thai exports, he said…

    Of the Bt1.7 trillion circulating in the financial system, about half is the cash flow and spending of businesses and the other half is parked in short-term government treasuries.

    Narongchai said at least Bt820 billion from this money supply could be drawn for reinvestment into the economy.

    As of April in the fiscal year beginning last October, the government managed to collect only Bt655 billion, while its expenditure obligations hit Bt1.1 trillion, leaving a gaping deficit of Bt455 billion.

    The central bank should join forces with the government by using its excess liquidity to help invest in various projects to revive the economy, Narongchai said.

    The Bank of Thailand has printed money worth Bt894.5 billion, but it still has Bt878.2 billion languishing in its special account

    However, central bank governor Tarisa Watanagase is likely to oppose any move to use the reserves. When Prime Minister Abhisit Vejjajiva and Finance Minister Korn Chatikavanij visited the BOT soon after assuming office, Tarisa stood firm against their pressure for the central bank to use some of the reserves to help shore up the economy.

    Abhisit and Korn backed off and instead turned to working on two huge borrowing packages worth a combined Bt800 billion, which both passed through the House of Representatives this week.

    The borrowing packages could raise the country’s risk profile by sending it deeper into debt.

    “join forces with government” – so, BOT is not working with gov.? then with whom it s working?

    I am still thinking that Abhisit and Korn borrowing B800bln is really bad idea, but here it looks like Tarisa has left them no choice? so, who are bad guys and who are good – is Tarisa a good girl, trying to protect country’s reserves from voltures (aka Abhisit, Korn and Co). why didn’t Tarisa do anything to prevent this borrowing, if she knew very well how much money BOT has in foreign reserves and how bad the B800bln loan will be for country !

  10. 10 Lothar 18 June 2009 at 7:59 am

    @Laurent: How is the internet in Cambodia outside Phom Phen.
    While living 20 years in Berlin, south east asia turned me into a nature boy. I simply don’t like asian cities.

    Here in MHS i have 2MBit ADSL a huge garden and green everywhere.

    I’m afraid i will not get this in Laos,Vietnam or Cambodia right now. Even the Philippines have problems with it but they are improving there telephone/internet a little bit up to a 384KBit level 😦

    Unfortunately i need a fast ADSL for making my money.

  11. 11 CNXJeffrey 18 June 2009 at 9:01 am

    Agreeing fully with other comments here, it is clear to me there needs to be fundamental changes in Immigration policy, taxation and land ownership, at the very least, for this country to progress.
    Oh!, and perhaps a move to a socialy enlightened government, away from the extreme right-wing nutheads.
    But then, perhaps Thailand will be the best place to ‘contain’ the world’s fascists, as they want to live in their own shell, isolated from the wider world. From what I’ve read in BKK Post etc., there is a significant number of falang right-wingers residing here who love it the way it is.
    The rest of us will be leaving, can’t wait forever to sell the business or house and car package, but will be walking away from a bad dream. Cut the losses and go.
    The Thai nationalist propaganda that is pumped into these long-suffering people from cradle to grave does not engender a wholesome global citizen, does not prepare the nation’s youth for a future engaged with the world.
    Cambodia, Vietnam and Laos are looking good!.

  12. 12 Manao Black 18 June 2009 at 11:37 am

    My firm and the firms and individuals that we advise are proceeding from the assumption that foreign tourism here is now fatally damaged and will not recover. And further that products and services marketed to expats will in the mid-term, perhaps as little as 3 years out, also begin to see a significant shrinkage in demand.

    The bloom is off the rose as far as Thailand is concerned and there is heavy negative word-of-mouth in all significant foreign tourist markets. This isn’t something that shows up on many spreadsheets yet, but it will. The list of negatives is as longs as your arm but near the top are issues of personal safety, value-for-money, and perpetual civil unrest.

    The actual impact is worse than any composite headcount of foreign arrivals. The nature of the tourist coming to the Kingdom is changing and shifting away from middle-class Westerners on repeat visits. First-time visitors from less sophisticated markets are making up some of the shortfall, at least for now, but it won’t last.

    It’s over. Would the last foreigner out of Thailand please remember to turn out the lights?

  13. 13 jaap 18 June 2009 at 12:41 pm

    As a entrepreneur in Bangkok, and a business owner in hospitality I must sadly agree with you on this one Thai Crisis. Thailand is rapidly changing its mentality towards tourism.I came her first around 10 years ago and in 10 years prices went up sky high and the hotelindustry was and still is trying to catch only the rich and wealthy. Rooms in Bangkok,same as condo’s are still highly overpriced and we do not even mention that some places are selling their beers for a stunning 3 euro’s a small bottle. Why they did this? Because they could. Stupid, ignorant tourist didn’t care, they spend, borrowed, spend, and the sky was the limit.
    I am agreeing totally with the backpackers philosophy of Lothar, the are put in a corner, less to do for them so they looking for places elsewhere.
    Thailand tourism will change soon though, as only the strong and fair balanced shops, hotels, guest houses and restaurants will survive.
    For me, I love Thailand, all I would like to see is that the hospitality Industry changes back from a greedy money making co-operation into the warm and welcoming hospitality machine it used to be before.
    Which tourist wants to sit in a empty 5 star hotel, alone in the swimming pool paying 800 baht for a glass of wine?

    A small note on the Spa world?
    I agree with you that Bangkok and Thailand has far to much Spa’s. I also believe that only the ones who offer quality will survive. Thailand is known for its spa, relaxing and massages and I believe it is part of the country ( wat po.)

    My advise for all of you out there in hospitality: get your prices right, serve your guest with respect and love and give them the quality they deserve!

  14. 14 ThaiCrisis 18 June 2009 at 1:27 pm

    It’s over“.

    In a way yes. I would just say it differently : “Peak Tourism is behind us”.

    In the discussion, we forgot to mention one important factor : competition.

    Many other countries are competiting now for a small bite of the tourism the goose and its golden eggs. And this is accute during crisis times. People are cutting their travel budget, looking for bargains etc.

    The stupid TAT and the Tourism minister are just good to wait. Number of tourists increased almost every year since… 1975 ? πŸ˜‰ Therefore, it HAS TO CONTINUE. For ever and ever. And if it doesn’t, then there is anomaly… πŸ˜‰

    In other words : they are totally unable to see and to understand that :
    1-the world has changed. Thailand is not the only “paradise” on earth anymore, a good place for tourism
    2-the crisis has a deep financial impact on tourists

    Add 1 to 2, and you get a bleak future.

  15. 15 Michael 18 June 2009 at 1:41 pm

    Maybe the Thais will stop hating us so much after we all leave, but I suspect not….we will be blamed for the economic collapse.

  16. 16 laurent 18 June 2009 at 2:45 pm

    For Lothar
    Now internet is ok in Cambodia but only in the major cities. They have deployed WIMAX and have relaxed the telecom laws resulting in a big increase of the competition with new contenders (all of them foreigners)
    As for investors everything is easier than in Lalaland.
    you Buy your one year visa and it give you the right to work. You can own 100% of the shares of your company.
    Right now you cannot buy land or condo in your name , but a new law is in the pipe.
    I think all the contibutors in this blog have loved Thailand so much , but the thai stupidity succeed to disgust all of us. Cambodia and Lao are much more open it reminds me thailand 15 years ago when it was really “the land of smile”

  17. 17 InPhuket 18 June 2009 at 3:11 pm

    Not to beat a dead horse, but this cam from the BP Today:

    Kasikorn centre: Flu will hit GDP

    The Kasikorn Research Centre (KRC) predicts the outbreak of the A(H1N1) flu virus will cause a drop in Thailand’s gross domestic product (GDP) of 0.1 to 0.3 per cent this year.

    However, the impact of the outbreak would not be as severe as the Severe Acute Respiratory Syndrome (Sars) in 2003.

  18. 18 W W 18 June 2009 at 4:02 pm

    I agree with TC that the future is bleak. Competitions are strong. Many countries offer cheaper, better value for money, more exotic and better environment than Thailand does. (Vietnam, Malaysia) Demand is down. Politics is messy. Poor personal safety because of the protests. Hotel rooms are over supply. Tourist destinations environment is worsening.

    The mentality has changed. Foreigners has to pay 200 B to visit the Grand Palace while Thai doesn’t because of stupid rational that oh you’re westerner – you’re rich so you should pay entrance fee. What’s a racist mindset!

    But the saddest part is nobody care. The government doesn’t care. Most Thai entrepreneurs think it’s liquidity problem not demand problems from poor product quality and slump from international tourists. For the past, Thais can ignore this due to increase tourist numbers very year.

    For now, I’m pretty pessimist until the country hold together and set it mind to tackle these problems. But again, nobody seem to be able to hold the country together. We can’t count on the elites in power to tackle this. Finally,this is somehow related to the messy Thai politics.

  19. 19 ThaiCrisis 18 June 2009 at 4:06 pm

    I would be very cautious with such “study”… I mean how they could estimate the economic impact of the flu in the future, when precisely, we can’t make any prediction as for the developpement of the virus ! ?

    Classic flu or super killer flu 1918 style, nobody know, that’s the whole issue !

    It makes no sense at all. Like it makes no sense to say the “outbreak would no be as severe as the SARS”.

    If they were honest (and humble), they would make 2 scenarios.
    -the flu is a “normal” flu (as far as mortality is concerned), then you factor in the “fear factor”… effect on tourism… blablabla… impact on GDP will be X.
    -the flu is a total killer, then GDP drops by Y

    Plus variations between those 2 points. This is all what they could do.

  20. 20 fall 18 June 2009 at 7:19 pm

    Red Herring. If not the flu, it’s David Caradine. If not Caradine, it’s some-excuse-what-ever.
    The point is never to accept that government aint doing what it suppose to do, but blame it on something with no control over.

  21. 21 Pricilla 18 June 2009 at 7:22 pm

    It has been interesting reading these comments, the foreigners’ poor outlook on Thailand seems even worse than I thought. Where there is this much smoke there is definitely fire…

    I am legally entitled to a child support visa as meet all the requirements, but expect when I apply I will be refused and steered into another type that has to lock up money in a Thai bank. It is the slow death of a thousand cuts for most I expect.

    Personally after years of crap at Immigration I have closed my company, so now don’t pay them tax anymore, the staff have moved on. I own quite a bit of property which I had intended to expand more for rental income and eventually start building, but have decided to sell it all off. I bought very cheap so I will get out with a profit and I don’t see the long term trend as positive.

    If you asked a Thai about any of this they wouldn’t know what you are talking about, they still assume foreigners are idiots there to be ripped off. The government continues to squeeze more on the visas as surrounding countries make it easier. It is endemic across society.

  22. 22 Lothar 18 June 2009 at 7:41 pm

    Yes i agree its partly our fault. I remember i posted a comment after the 2006 coup that they could crucify a random selected farang every week in the entrance hall of Don Muang Airport and the Tourists would still come.

    I hated this guys who were paying all prices comparing there prices in there 1st world country with thailand. They made this thai guys and girls crazy.

    if they were honest about the flue scenario they could only say:
    “We don’t know what influence it has but god may help us”.

  23. 23 ThaiCrisis 18 June 2009 at 9:15 pm

    Fall : very true.

    Time goes fast… Already 6 months of Abhisit… And ? Thai love to make “summary” and “list of achievements”. This government doesn’t avoid the tradition. πŸ˜‰

    But the result is near zero. Nothing on the long term, only short sighted policies, and reactions to the daily news.

    Abhisit started fast, like a rocket on fire, he made some nice speeches (very Obama style)… And… like a pile of jelly… the energy and ideas of Grandeur of the guy just vanisheddissolved by and into reality checks.

    We can feel his disillusionment. He’s waiting. To be relieved. Soon, he will look as tired and sad as Surayud.

    He knows already that he lost the plot. He can’t move. He wanted to show off with the economy, to give an impulse…. But the economy is his nemesis.

    Abhisit has only one political function now : to last until the Big Event.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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