Thailand Wages Steep Recovery

After years of enjoying unrivalled leadership in Asia-Pacific tourism, Thailand is working overtime to recover from its worst crisis in history; one that has even eclipsed SARS, terrorism and the 1997 economic crisis in intensity.

For years, southern Thailand benefited from a diversion of visitors from other crisis-hit destinations like Bali, Sri Lanka and the Philippines. In December 2004, Thailand joined the club when the tsunami caused the largest level of tourist casualties among any of the affected Indian Ocean countries.

Phuket and the southern Thai beach provinces, once the jewels in the crown of Thai tourism, suffered the most. As the following figures show, international passenger movements at Phuket airport plunged by 88% in January 2005, and domestic passenger movements by 44%. For the first six months of 2005, the figures were down 65% and 14% respectively.

The crisis has forced the Thai tourism industry into an unprecedented effort to bring visitors back. The formidable internal and external odds are severely testing the industry’s marketing mettle, as it strives to meet this year's total visitor target of 13.38 million arrivals.

Externally, oil prices are rising to unprecedented levels. Additionally, the ongoing insurgency in southern Thailand is also creating concern. In the critical regional markets, Thai authorities are having to overcome well-entrenched cultural fear of spirits and ghosts of the tsunami victims, which many believe are still haunting the affected areas.

While clever marketing, pricing policies and short memories may help overcome all these perceptions, the constant fear is that of earthquakes, which have become a regular recurrence since the disruption caused by the multi-megaton undersea quake from the Andaman and Nicobar Islands, all the way through to the Indonesian archipelago.

However, extraordinary circumstances require extraordinary responses. The following is a recap of one of the most catastrophic developments in Thai tourism history, and the gargantuan efforts being exerted by the industry to regain normalcy.

BACKGROUND
According to Thai Foreign Minister, Kantathi Suphamongkol, the tsunami was the largest in living memory, tremendous in both scale and scope, leading to unprecedented loss of life. "Thailand is 800 years old and we have never experienced anything like this," he said.

Overall, 5,395 were confirmed killed, 8,457 people injured and 2,906 people missing. Over 58,000 people or 12,000 households were affected and more than 4,800 homes totally or partially destroyed. Nearly 500 fishing villages were affected, with roughly 6,400 fishing vessels destroyed or damaged.

Seventy per cent of the damage was concentrated in the popular resort town of Khao Lak in the southern province of Phangnga. The nearby fishing village of Baan Nam Kem was also literally destroyed.

Total damage to fisheries, property and infrastructure, including roads, bridges and piers, exceeded US$70 million. In economic terms, the tsunami is expected to reduce Thai GDP growth in 2005 by 0.50 per cent, or actually around US$900 million.

The tragedy also claimed the life of Their Majesties the King and Queen's grandson, which added to the grief felt by the Thai people. It also led to the close personal involvement of the revered Thai Royal Family in all the rehabilitation and restoration efforts.

Immediately after the disaster, the Thai Government, in close collaboration with the private sector and non-governmental organisations, moved quickly to provide immediate relief and temporary shelters for displaced victims. A strategic plan for integrated coastal management was developed, including the clean-up of the environment and rehabilitation of affected areas.

Today, Phuket is back to normal. Many houses and schools have been rebuilt. Fishing vessels have been repaired. Micro-credit loans have been offered to affected small and medium-size enterprises or SMEs.
However, many coastal resorts, fishing villages and communities still require more work to recover fully. In addition, work still needs to be done to provide for the homeless and the psychologically affected people.

Thailand's two primary organisations responsible for taking the product to the marketplace, Thai Airways International Plc. and the Tourism Authority of Thailand (TAT), have invested heavily in marketing efforts to bring visitors back.

The following is a useful checklist of crisis-management projects and activities that were mounted and may be of use in future, perhaps even by other destinations.

TOURISM AUTHORITY OF THAILAND
The first priority was to provide relief to those affected and help those seeking to make contact with friends and relatives, and vice versa. A total of 1,934 international victims were helped with transportation, accommodation, food and other support. Tourist Information Centres were set up to help visitors and family members establish contact in coordination with local embassies.

A 24-hour Crisis Communication Centre (CMC) was set up to disseminate updated information to all related organisations, including the TAT's 17 overseas offices, 22 domestic offices, international and local media. The CMC set up a website to update news of relief and reconstruction efforts at www.tatnews.org.

As the crisis abated, extensive surveys were carried out of the affected areas to assess damage to the tourism infrastructure. Government agencies began to restore and rehabilitate all the affected areas, including roads, telephone, water, electricity and waste management facilities.

Alongside the clean-up operations, the TAT began to lay plans to restore the confidence of domestic and international travellers and achieve a rapid turnaround and the speedy recovery of affected areas. This involved re-positioning the six Andaman coast provinces (Phuket, Krabi, Phangnga, Trang, Ranong and Satun), plus the launch of a proactive and sustained advertising and public relations campaign to bring back the visitors.

To address the fear of spirits and ghosts, the TAT, along with the Association of Thai Travel Agents (ATTA) and OK Thailand Group, organised a religious ceremony caravan from Bangkok to the Andaman coast on 10-13 February 2005, in which 9,300 people participated.

Domestic tourism was the easiest market to win back and the first priority. The TAT launched a campaign called "Andaman Recovery" bearing the slogan "Andaman Smiles Again" to bring back visitors. A domestic travel consumer fair was organised at the Queen Sirikit National Convention Center on 25-27 February 2005, where discounted tour packages were offered to boost travel to the southern provinces.

The website www.andamansunshine.com was created to publicise the campaigns and promote the destinations in both the affected and unaffected areas.

A total of 3,396 media and sales representatives were invited as part of a mega familiarisation initiative that involved visiting the affected areas to better understand the revival plans and see the reality on the ground. Participants came from important source markets including China, Taiwan, Japan, Hong Kong, Singapore, Australia, Russia, Scandinavia, France, the Netherlands, the USA and Italy to inspect the destinations and hotels.

Media briefings were organised at various trade shows to explain the situation and recent developments to tour operators and media. Public relations efforts were mounted under the banner "Come to See" in Phuket Today as well as on CNN, MTV Southeast Asia and MTV India, along with publicity material on MTV’s website.

Promotional materials, in DVD and VCD formats, including Andaman Today brochures, were distributed overseas to build up confidence among travel agencies and overseas visitors.

The live TV coverage of the Miss Universe pageant finals on 31 May 2005, was extensively used to feature clips of Phuket and other southern provinces, presenting an image of normalcy.

A major priority was to ensure that tour operators did not redirect customers to other countries. With TAT offices highlighting the fact that other beach destinations such as Pattaya, Samui and Hua Hin were all operating normally, many tour operators continued to support Thailand.

Major roadshows were organised in Singapore, Malaysia, Australia, Japan, Europe and Northeast Asia to woo visitors back. The Thailand Travel Mart fair in June 2005 was also extensively used with many of the invited buyers opting to take pre- and post-conference tours to southern Thailand to see the situation for themselves.

On 10 May 2005, the Andaman Tourism Recovery Strategy was approved by the Thai Cabinet, with the following components:
l Patong & Kamala recovery package (June-December 2005): Design and rebuild beaches in Patong to their natural state. Establish a tsunami early warning system (see next page).

l Project to promote Andaman (June-October 2005): Build confidence among overseas travellers. Arrange Fam (familiarisation) Trips and promotional campaigns in 27 overseas markets through airlines, travel agencies and media.

l Boost domestic tourism in collaboration with Thai travel agents, airlines, banks, media and other businesses (June-October 2005): TAT was assigned to design special packages and fares to provide incentives and opportunities for domestic travellers to resume travelling to the affected provinces.

l Marketing will also be stepped up in the MICE (meetings, incentives, conventions and exhibitions) sector to attract more corporate visitors (June-October 2005).

THAI AIRWAYS INTERNATIONAL PLC. (THAI)
l THAI's first priority was to get survivors and injured people either back to Bangkok or their homes. THAI operated 446 flights from Phuket and Krabi to Bankgok, carrying 70,058 passengers. In the reverse direction, THAI carried a total of 403,621 kgs. worth of medical equipment and donations of consumer goods worth 60 million baht.

l THAI's Board of Directors approved a budget of 100 million baht for financial assistance to be used for transporting food, clothes and emergency supplies, including air tickets to transport the injured and those affected, as well as doctors, nurses, volunteers, charitable organisations, press and other entities. The aid was also used to revive tourist sites along the Andaman Sea.

l Those who were booked to fly to Phuket in the aftermath of the disaster were allowed to change their travel destinations to alternative resorts within Thailand without being charged a penalty fee.

l A "Royal Orchid Plus Crisis Relief" campaign invited Royal Orchid Plus Members to donate mileage points to redeem air tickets for non-profit organisations in Thailand to transport medical equipment, rescue teams and medical staff from the Red Cross Society to affected areas.

l THAI joined the "Happy Andaman 2005" tourism recovery campaign. The first priority was to bring in overseas media and travel agents, with the People's Republic of China being the first country to arrive on 13 January 2005.

l THAI's Lucky Draw Onboard offered 20,000 tickets to lucky winners who also received an extra complimentary ticket to Phuket, Krabi or Trang. The campaign ran until 28 February 2005.

l THAI worked with the Thailand Convention and Exhibition Bureau (TCEB) to promote southern provinces as MICE destinations. A workshop was held to seek ways to encourage the private and public sectors to organise more meetings and incentive trips to southern Thailand with additional support from the TAT, Nok Air, AirAsia, Orient Thai Airlines, hotels, and travel agents.

l In cooperation with the Office of the Public Sector Development Commission, Tourism Council of Thailand, and the Office of Conference and Exhibition Promotion Commission, THAI offered discounted fares for conference organisers on routes to Phuket, Krabi and Trang.

l THAI's Euarng Luang Tours offered a Phuket Meeting and Incentive Package for companies and government agencies organising seminars in the south. The package deal was eligible for seminars of at least 20 delegates, with a minimum duration of 3 days, 2 nights.

l In January 2005, THAI employees who were scuba divers joined up with senior professors of Kasetsart University to conduct an assessment of coral reefs at Surin Island in Phangnga province in order to determine the condition of reefs and identify suitable remaining sites for tourists interested in scuba diving in the waters of southern Thailand.

l THAI worked with the Office of the Supreme Commander and UBC Group on a "Love Andaman Thailand" campaign. Volunteer divers and military personnel were flown down to assess damage and collect debris and revive coral reefs in February and March 2005. A Beach Festival was organised on 5 March 2005, including beach sports competitions along with Thai and international music concerts. The event was widely televised.

l THAI worked with TAT and other organisations to boost Thailand's profile at trade exhibitions abroad. A video made specially to promote the Andaman Sea area was shown on board THAI flights and flights operated by partner carriers on at least 2,442 aircraft to destinations worldwide.

l A Beach Queen Thailand 2005 beauty pageant was announced for young ladies from Thailand and overseas. The finals were held in Phuket in October 2005 and THAI plans to make it an annual event.

l In June 2005, THAI was appointed as the lead carrier to work in cooperation with the TAT and domestic airlines like Thai AirAsia, Nok Air, Bangkok Airways, Orient Thai Airlines and PB Air to bring in at least one million tourists during the low season.

l THAI and TAT jointly organised a "Southern
Paradise Re-Ignition Campaign" with tour packages
to Phuket, Krabi, Phangnga, and Trang starting at
4,000 baht per person, including air ticket and hotel accommodation for travel during 1 July - 31 October 2005. The package was aimed at Thai nationals and residents only.

NATURAL DISASTER AND TSUNAMI
EARLY WARNING SYSTEM SET UP
Immediately after the tsunami, the Royal Thai Government began intensive discussions with regional governments to establish an early warning system to protect against all forms of natural disasters nationwide, including tsunamis. Within five months, a National Disaster Warning Centre was set up and opened in Bangkok on 30 May 2005.

How it will operate
The National Disaster Warning Centre involves a vast network of media communication links, radio and television, SMS text message facilities and watch towers. It is based on several key components, including a high-tech installation featuring quake and tidal sensors, speedy communications, alarm networks and disaster preparedness training in vulnerable regions, and giving people time to flee to higher ground before the giant waves strike.

The arsenal of wave and pressure sensors, seismographs, computers and orbiting satellites keep a watchful eye over the ocean, looking out for any changes. The system will be able to identify where undersea earthquakes occur and determine the possibility of a tsunami as well as where and when it would hit.

Data on the intensity of seismic or wave activity will be received and transmitted via the Early Warning System established by the Warning Centre. The centre will be staffed 24 hours by a team of experts tasked with monitoring and analysis of computer-generated reports. The Early Warning System information network will be linked to a network of 10 state agencies.

Should there be a high probability of a tsunami, a warning will be issued immediately via satellite to high risk areas around Thailand. Warning sirens will be sounded, along with visual indicators such as red alert emergency warning lights and announcements in various international languages.

To attain the widest coverage within the shortest possible time, warnings to high risk areas will be transmitted simultaneously via 10 TV stations; 211 AM radio stations; 312 FM radio stations; 169,696 amateur radio stations and 1,000 local radio networks. Warnings will also be sent via SMS to some 20 million cellular phone users.

State authorities have been coordinating with international experts in the prevention and management of natural disasters, such as floods and other natural catastrophes, to train state employees responsible for managing threats of this nature.

Early warning system manuals
Manuals, available in a number of languages, will detail designated evacuation routes which will vary according to the nature of the impending emergency. For example, the designated evacuation routes for floodwaters will be different from those for an earthquake.

Tsunami evacuation drills,
Patong Beach, Phuket
The early detection of a possible tsunami threat is only part of the solution. Local communities and populations need to be prepared so they can act appropriately to a warning. Residents and members of the local community are being educated and made aware of the potential dangers of natural disasters so they are well-prepared and know how to respond to warnings through a series of disaster response drills.

The Thai cabinet approved a proposal for the Department of Disaster Prevention and Mitigation, Ministry of Interior, to formulate a systematic evacuation plan for communities in the six coastal provinces along Thailand's Andaman coast. The evacuation plan provides for the announcement of the plan and periodic drills to be conducted.

A tsunami evacuation drill was conducted on Patong Beach in Phuket on 29 April 2005, organised and coordinated by the Civil Defence Secretariat Office of the Department of Disaster Prevention and Mitigation. The objectives were to:

l Assess the readiness of all agencies working in collaboration to implement existing evacuation plans in the event of a tsunami incident occurring
l Test the operability and efficiency of the evacuation plan in place
l Generate preparedness and enhance confidence among officials concerned and the general public and familiarise all parties with the systematic evacuation procedure
l Ensure the safety of lives and property of the public and tourists in high risk areas

Designated evacuation routes
to facilitate rapid evacuation
To facilitate evacuation and escape from danger zones to higher ground or the city centre, and vice-versa, the identification and selection of appropriate evacuation sites with clearly marked evacuation routes to facilitate rapid and convenient evacuation and escape within the shortest possible time has also been completed. The following points have been identified:

Evacuation sites
l Soi Sansabai
l Cristin Massage
l OTOP Centre
l Coconut Intersection
l Coral Beach Bridge

Evacuation routes
l Bangla Road
l Soi Patong Tower
l Ruamjai Road
l Prachanuklo Road
l Coral Beach Bridge

Installation of similar Early Warning Systems is under way in each of the six provinces of Southern Thailand, under the supervision of the Ministry of Information and Communication Technology. Efforts are being focused on high risk areas and key tourist destinations.

There are also plans to install digital data recorders to pick up signals relayed by Early Warning Centres around Thailand established by the National Telecommunications Commission.

CONCLUSION
With strong tactical marketing plans, a well-functioning early warning system and a well-defined disaster prevention and mitigation plan with clear action steps and precautionary measures in place, the Thai travel industry is hopeful visitor confidence will be restored and that travel to Thailand's beach resorts along the Andaman Coast will return to near normal in the next high season starting in October 2005.

While Phuket was a favourite destination in 2004, we lost ground to Bali earlier this year. However, since the most recent incident in Bali, it appears that business is returning to Phuket, although still slower than expected.

Providing that there are no negative incidents in Phuket or surrounding areas, we expect 2006 to be an okay year for the hotel industry, as airlines reinstate direct services to Phuket, with many of them offering attractive airfares. However rumours are that our national carrier, THAI, will reduce their support for the island as they have decided to stop flying direct from Australia as of February 2006.

The first five months of 2006 are expected to show some 30% less business compared to 2004, followed by a reasonably good summer from Australia and Asian markets.

New markets generating business for Phuket, and other parts of Thailand, include Eastern Europe and China (though the latter with a rather cheap clientele).

Demand from MICE organisers is increasing, though rates will not be at usual levels due to the rising competition of new and re-opened hotels. Properties such as Le Meridien Phuket Beach Resort have taken the opportunity in 2005 to improve the product.

As of the high season starting in November 2006, we expect business to be very good and back to 2004 levels. At Le Meridien Phuket Beach Resort we are expecting a 70% occupancy for 2006. Phuket is back, as can be seen from the increasing number of investors seeking hotel assets.

More effective marketing campaigns and additional assistance from the Thai government are essential to bring the tourists back and improve the situation especially for the thousands of Thais in the Andaman region whose livelihoods depend on tourism.

Rudolf Borgesius
General Manager
Le Meridien Beach Resort Phuket