Tourists shun battleground Bangkok

Bangkok hotels are less than 30 per cent full, about half the usual rate for this time of year, as deadly protests deter tourists from visiting the city, according to the Thai Hotels Association.

"When they hear about burning tyres, bombs and shootings, they decide not to come," Prakit Shinamornpong, the group's president, said.

"It's very bad."

Occupancy in hotels on the Sathorn Road, near some of the worst violence, has dropped to as low as 10 per cent, Prakit said, while the 517-room Dusit Thani Hotel in central Bangkok closed this week on security concerns.

Tourists are avoiding the capital after at least 36 people were killed in clashes between troops and anti-government protesters over the past four days.

"I won't go into the city now," said Lisa Ischane, an event co-ordinator, as she queued in Hong Kong for a flight to Bangkok. "I was planning to spend a few days there just to relax."

Ischane will instead connect on to a flight to Koh Phangan, a resort destination in southern Thailand, rather than visiting shops and restaurants in Bangkok. "The airport should be fine," she said.

Thailand's deadliest political clashes in two decades threaten to undermine tourism, which accounts for about 7 per cent of the economy, according to Credit Suisse Group.

The number of foreign tourists may drop to as few as 12.7 million from 14.1 million last year, costing the country as much as 100 billion baht ($4.4 billion) in tourism revenue, the Tourism Council of Thailand said last month.

At least 43 countries have issued advisories against travel to at least parts of Thailand, according to Credit Suisse, including New Zealand, Australia, the US and the UK.

JTB Corp, Japan's largest travel agency, cancelled tours to Bangkok until May 31, extending a block that began on April 24.

"The tourism industry just stops amid a situation like this," Charoen Wangananont, president of the Thai Travel Agents Association, said. "There have been no new bookings for about two or three weeks already."

Hong Kong travel agents have lost more than HK$30 million ($5.5 million) in sales since late March because of disruptions in Thailand, said Michael Wu, chairman of the Travel Industry Council of Hong Kong, which represents about 1500 travel agents.

The group would probably announce that it is cancelling all trips to the Thai capital until May 31, he said.

"We are suffering as Bangkok is a popular travel destination among Hong Kong people," he said.

"We hope things will be settled by mid-June and the protests won't affect our summer peak-season bookings or we will see a greater loss."

Cathay Pacific Airways' Bangkok bookings this month are 50 per cent down from last year, predominantly because of tour-group cancellations, the carrier said. The airline would maintain services because most of its flights continued on to other destinations, it said.

Hotels in Kao Lak, a resort in Phang Nga province, were less than 6 per cent full, Prakit said. On the island of Phuket, occupancy was below 40 per cent, compared with a usual level of about 60 per cent, he said.

Thai tourism-related shares have tumbled since the protests intensified on April 10. Thai Airways International, the nation's biggest airline, has fallen 11 per cent to 25 baht.

Hotel operator Minor International has lost 7 per cent to 9.65 baht, while Dusit has lost 1 per cent. The benchmark SET Index has fallen 4.6 per cent.

The baht weakened on Monday to the lowest level in seven weeks, dropping to 32.5 to the US dollar. Foreign funds sold more Thai shares last week than at any time since November 2007.

All Nippon Airways and Japan Airlines have both closed downtown ticket offices in Bangkok because of the protests.

They haven't cancelled any flights so far. Singapore Airlines is offering full refunds for bookings on Bangkok flights before May 31.

Qantas Airways, Australia's largest carrier, said services to and from the Thai capital were operating as normal and that passengers could change their tickets.

Few customers have changed travel plans so far and the airline hasn't removed any staff from Thailand, spokeswoman Olivia Wirth said.

The latest demonstrations began two weeks after a court seized 46.4 billion baht from the family of ex-leader Thaksin Shinawatra, who was ousted in a coup in 2006.

Officials banned financial transactions of 106 companies and individuals linked to Thaksin in a bid to cut off funds for the demonstration.

"The hotel operators don't know what to do because this is a political issue," Prakit said. "We just hope it will end soon."

- BLOOMBERG