BANGKOK, : Association of Domestic Travel says the ongoing political instability will hit small and medium-sized tour operators in Thailand if the situation drags on, and could force some of them to close.
ADT president, Yutthachai Soonhronrattanavate, said about 10% to 15% of 430 small and medium tour companies, all association members, are unlikely to survive if the political conflict continues beyond March.
“The impact is very obvious from the sharp drop in foreign and domestic tourists since last October…the tourism industry will be the first sector to be hard hit by political turmoil.”
Generally, small and medium-sized operators have only five months of cash flow to survive unlike large operators that have more higher flexibility in financial management.
But all companies, small and large, are suffering and company closures are imminent if the government fails to stabilise the business environment.
The president added: “Prolonged political unrest will eventually cause financial trouble for small operators…they can live off past earnings for around five to six months and then there will be closures,” he warned.
Usually the closures occur without any announcements. Shops are vacated and staff made redundant, while the SME owner attempts to pay off debts and move into another line of business. The only indicator is the failure of companies to re-register for ministry of tourism operating permits usually required every two years.
Mr. Yutthachai Soonhronrattanavate
Mr Yutthachai estimated that the number of domestic trips will drop 20%, on average, per month, because of the political turmoil and the delays to the government’s budget allotment.
This in turn hurts small resorts up-country that rely on domestic tourism for most of their business, much of it from government departments that organise seminars up-country.
Tourism Authority of Thailand estimates domestic travel will accumulate 136.8 million trips (+5.63%) and generate Bt700 billion (+9%).