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The devil's in the kangaroo currency for Phuket's 2009

Update: Phuket Tourist Figures Nosedive in Q2

Wednesday, October 29, 2008
Economic Analysis

NEWLY-RELEASED official Tourism Authority of Thailand figures for the second quarter of 2008 show an alarming drop in visits by foreign and Thai tourists to Phuket.

The TAT tally shows a year-on-year fall of 16.29 percent across international and Thai tourists, with numbers falling from 1,002,825 in 2007 to 839,512 in Q2 this year.

The total reflects a fall of 22.97 percent in domestic tourism, possibly because of political turmoil in Bangkok, and a drop of 12.74 percent in foreign guests on the island.

The downward trend was a continuation of a decline in the 2008 first quarter of 18.74 percent.

It is likely to be followed by a Q3 decline, which will become more pronounced in Q4 if the Australian dollar continues to hold the low value it has today.

Australians in the first half of the year bucked the downward trend in Europe and Asia, supporting Phuket to a disproportionate degree.

But the Aussie currency now buys only a fraction of what it bought in Thailand just a few months ago.

Q3 will be down because of the August airport blockade over three days by anti-government protestors. The declaration of a state of emergency in Bangkok also disrupted holiday plans and led to conferences being cancelled.

Figures for British visitors in Q2 show a drop of 31.73 percent to 37,849, reflecting the economic downturn there.

Please tell us how the downturn is affecting you. Comment below, it's easy

The number of Australian visitors rose 15.16 percent, and dominated among foreign visitors.

Australia was the only nation beyond 60,000 visitors, reaching 102,064. (There were 345,000 Australian visitors for the entire year in 2007.)

But the value of the Australian dollar has slipped alarmingly. If it does not bounce back quickly, fewer Australians will be able to afford to travel overseas.

Today one tourist from Melbourne, David Butt, arrived in Bangkok to find the Australian dollar could be exchanged for 20 baht.

When he left Australia, it was worth 23 baht. In his Bangkok hotel, the exchange rate for one Australian dollar was a mere 18 baht.

At its peak a few months back, the $A was nudging an exchange rate of 30 baht.

If the Australia dollar does not appreciate against the baht, Phuket's most valuable source of overseas tourists will rapidly dwindle.

Such are the vagaries of the global financial crisis. Most experts tip worse to come.

As a luxury for some and discretionary spending for others, tourism will be cut back as the economic pain spreads.

In 2007, many resorts on Phuket had their best year since the tsunami closed out 2004. Even the September crash of a One-Two-Go flight at Phuket airport, with 90 deaths, did not completely sour last year.

As well as Britons declining in visitor numbers, Malaysians dipped by 27.25 percent, Singaporeans by 29.94 percent, Japanese by 15.48 percent, Hong Kongers by 25.99 percent, Taiwanese by 12.58 percent, Indians by 33.09 percent, and Saudis by 40.60 percent.

Belgians declined in numbers by 38.17 percent, Finns by 25.56 percent, Germans by 36.28 percent, Italians by 31.27 percent, Dutch by 38.13 percent, Spanish by 22.64 percent, Swedes by 15.90 percent, Swiss by 28.04 percent, Irish by 67.10 percent, and New Zealanders by 22.68 percent.

With Australia providing 102,084 of the total of 839,512 overseas visitors and the next-best being the 60,933 Koreans (up 6.27 percent) the importance of the value of the Australian dollar becomes evident.

While the number of Russians rose by 11.87 percent to 23,103, that total would have to increase rapidly to compensate for a dramatic shakeout in visitors from ''Down Under.''

For Phuket, 2009 now rides up or down with the bouncing kangaroo currency.

Danes went against the trend in Europe, increasing visitor numbers to 17,034, up 45.02 percent.

Figures for Q2 this year have only just become available because the compilation requires the cooperation of 660 resorts and guesthouses on the island.

Villa accommodation is not normally included in the survey.

Essential Reading

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Phuket Record High Season is 'A Disaster'
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