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Thai Tourism Under Threat


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James Hookway
Updated Jan. 5, 2014 9:56 a.m. ET

Thai antigovernment protesters wave national flags as they parade past Democracy Monument during a rally in Bangkok on Sunday. Agence France-Presse/Getty Images


BANGKOK—As thousands of demonstrators marched again through the streets of Bangkok on Sunday and their leader threatened bigger turnouts, members of Thailand's vast tourism industry worried about how long it can withstand the pressure.

After two months of demonstrations, protest leader Suthep Thaugsuban led a procession past the Thai capital's glittering spires and bustling shopping streets to drum up support and raise cash for a larger rally he plans on Jan. 13. He and his followers aim to bring out hundreds of thousands of people to block up to 20 intersections around the city for a week or more, paralyzing traffic and amplifying the pressure on Prime Minister Yingluck Shinawatra to step down and let an unelected council take over.


Thailand's tourism industry, which accounts for more than 7% of Thailand's economy, doesn't usually pay attention to this kind of thing. As its nickname "Teflon Thailand" suggests, nothing seems to stick to the country.

The industry continued to thrive despite the coup that ousted Ms. Yingluck's older brother Thaksin Shinawatra in 2006. When over 90 people were killed in clashes between security forces and protesters on the streets of the capital in 2010, the sector hardly noticed.


Thousands of antigovernment protesters poured into Bangkok's streets waving Thai flags Sunday. Reuters


MasterCard MA -0.50% last year projected that the Thai capital would become the world's most visited city. A Bangkok shopping mall turned out to be the most photographed location on photo-sharing website Instagram, beating rivals such as the Eiffel Tower, Times Square and the Taj Mahal.



This time, the scale of the planned protests suggests things could be different.

Key Players

Read more about some key Thai political figures.

Photos: Protests Escalate
European Pressphoto Agency
Timeline: Legacy of Turmoil

A decade and a half after Thaksin Shinawatra founded his 'Thais Love Thais' party, antagonism prevails.

Already, visitors are beginning to give Bangkok a wide berth. Singapore Airlines on Sunday said it would cancel 19 flights to the Thai capital between Jan. 14 and Feb. 25 as demand dwindles. Surapong Techaruvichit of the Thai hotels Association predicts total hotel occupancy in Bangkok to fall to 70% to 75% in the first quarter, from a more usual 80%.

Visitor arrivals at Bangkok's international airports fell 15% in the first week of December compared with the same period as last year, though total tourism arrivals were up more than 20% from January to November 2013, compared with 2012.

Many of the visitors still flocking to Thailand are unperturbed. "I think you have to go out your way to find the demonstrators," said Paul Wallace, who is visiting the country from New Zealand with his wife and two young children. "It doesn't seem like something we have to worry about at this point."

But local business groups are concerned about the impact on other industries, too, especially if the protests turn violent or if demonstrators decide to besiege Bangkok's airports, as they did for more than a week in 2008.

Bangkok is a regional hub for many multinational companies. A prolonged siege of the center of the city could delay the shipment of basic supplies and complicate the processing of export and import permits.

Pornsil Patcharaintanakul, vice chairman at the Thai Chamber of Commerce, recommended that members stockpile raw materials and other goods at warehouses or other facilities outside the city.

The cost of next week's protests to the economy could reach 20 billion baht, or $606 million, according to the University of the Thai Chamber of Commerce.

The damage could be much worse if the rallies turn violent, said Kriengkrai Thiannukul, deputy president at the Federation of Thai Industries.

The country's financial markets have slumped amid the worsening tension, with the Thai currency falling to 33 baht to the dollar Friday, a fresh three-year low.

Rival pro-government protesters said they plan to hold demonstrations of their own, raising the prospects of further clashes after seven people died last month.

Army leaders openly talk about the prospect of a low-intensity civil war. So far, there is little sign of either side backing down.

Mr. Suthep, a 64-year-old lifelong politician, argues that a dozen years of populist policies have destroyed Thailand's democracy, leaving it under the control of the Shinawatra clan's patronage networks and its big-spending policy pledges.

The staunchly royalist Democrat Party, where Mr. Suthep was once a leader and which hasn't won an election in 20 years, has joined the protest by boycotting snap elections that Ms. Yingluck called for Feb. 2 to resolve the crisis.

Ms. Yingluck, elected in a landslide in 2011, argues that multibillion-dollar rice subsidies and tax rebates are good economics as well as smart politics, and have helped stimulate consumer spending in rural areas where her Pheu Thai Party enjoys strong support.

In a message posted on her official Facebook FB +4.84% page Sunday, she urged Thais to resolve their differences at the ballot box.

Ultimately, it could be Thai courts that determine who runs the country.

The Election Commission on Friday said the Supreme Court will decide whether a new Parliament can form after Mr. Suthep's followers had blocked the registration of candidates in dozens of electoral districts.

Candidates were registered in 94% of constituencies, below the 95% level required for Parliament to convene, potentially leaving Thailand facing a power vacuum and stirring speculation that the military could again intervene through a coup, as it did in 2006.


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