At the beginning of the year, tourism was touted as the government's main hope for offsetting the slump in exports and the downturn in the economy.

The premier even rolled out a plan to drive up annual tourism revenue by 50 billion baht or 1% of gross domestic product.

Unfortunately, because of the events in the United States and the subsequent military campaign in Afghanistan, 2001 has failed to meet the ambitious forecasts made earlier in the year as many tourists have chosen to stay home.

As well, concerns about the global economic downturn, uncertainties over currency fluctuations, shifts in investment and oil prices are all critical to the regular flow of travel and tourism.

In the immediate aftermath of Sept 11, the Tourism Authority of Thailand (TAT) revised its forecast growth of tourist arrivals to just 2% from 8.4%, based on the 10.3 million visitors last year.

Forecast revenues were also revised downward to 280 billion baht from 320 billion. The latter figure did not include the 50 billion baht that Mr Thaksin had hoped the industry would bring in.

Prior to Sept 11, tourist arrivals had been rising by a healthy annual rate of 8.7%, according to TAT governor Pradech Phayakvichien.

In September, arrivals fell by 0.8%, while October arrivals were down by 9% from the same month last year.

While the number of European and Chinese visitors continued to show some growth, Japanese and American tourist arrivals dropped significantly.

Still, the government was not deterred from its ambitious goals nor its efforts to get the industry moving again through heavy promotion campaigns in a bid to regain the confidence of tourists.

Deputy Prime Minister Somkid Jatusripitak even announced a plan to put Thailand among the world's top five destinations for tourists.

Last year, with 10.3 million visitors, the country ranked 21st in the world.

Mr Somkid said that although the future of tourism appeared to be uncertain, the government was confident that Thailand could reach the top-five ranking.

He said that crucial to the marketing strategy was to fully realise the country's tourism potential by integrating natural resources and traditional local skills.

Given rising unease about terrorism, the government would also promote Thailand as a safe haven for tourists, developing an advantage over neighbouring countries such as Indonesia and the Philippines, where there were political and religious conflicts, Mr Somkid said.

A crisis-management centre has also been set up to provide up-to-date information to tourists and ensure their safety.

As part of the international promotion, a major advertising campaign titled Be My Guest, featuring Mr Thaksin, will be launched in early 2002 to invite foreigners to visit Thailand.

The cabinet has approved 280 million baht to promote the campaign via commercials on leading international broadcasters such as CNN, and in travel magazines.

Wooing the media has long been part of the TAT's strategy, and in November it invited 120 Asia-Pacific journalists to Thailand for a conference about the state of the country's economy _ with the main incentive being post-conference trips to explore popular tourist resorts and cultural sites.

Another group of media representatives from Europe and North America will attend similar events next year.

An international roadshow led by key cabinet members has also been aggressively conducted in potential markets.

Compared with other countries in the region, Thailand had been less affected by the bleak global tourism scenario, with only a 0.8% decline in the number of tourists in September, said Mr Pradech.

During the same month, Hong Kong tourist arrivals were down 2.1%, Singapore arrivals dropped 3.1%, and arrivals to Australia plunged 11.9%.

The government will continue to emphasise tourism niche markets such as Mice (meetings, incentives, conventions and exhibitions), sports, health and spas, the elderly and honeymooners.

A Mice Bureau and a Long Stay Tourism Institute have been approved by the government to act as independent public bodies to directly handle these market sectors.

STAYING AT HOME

Meanwhile, domestic travel has been given more emphasis as authorities seek to offset the decline in the number of foreigners.

The war and global uncertainties would not only discourage foreigners from travelling to Thailand but also discourage Thais from travelling abroad, said Juthamas Siriwan, a TAT deputy governor.

Elephant trekking and rides in local transport have big appeal to foreign tourists, whose number has fallen below original projection since Sept 11.

Under normal circumstances, an estimated 1.8 million Thais travel overseas each year, spending more than 80 billion baht. The expenditures were expected to drop by half this year, she said.

A promotional campaign to encourage Thais to travel within the country was also launched in co-operation with hotels, restaurants and other related services.

Next year, the TAT would also develop a calendar of major events in the country. Popular festivals such as Songkran and Loy Krathong will be promoted on a national scale to allow all provinces to host events.

"Next year will be very colourful for domestic travellers with exciting events throughout the year," Mrs Juthamas said.

However, domestic travel promotion hit an obstacle when Thai Airways International Plc increased its domestic airfares by 20% across the board in November.

The national carrier has been losing two billion baht a year on domestic routes and its new chairman, Dr Virabongsa Ramangkura, has adopted a non-nonsense approach to dealing with the airline's finances and debts.

However, global tensions have been benefiting THAI's international services as many passengers are avoiding US airlines that might be potential terror targets.

As well, the airline has at last begun to embrace a domestic open-skies policy to allow smaller carriers to fly on secondary routes in order to match aircraft capacity with market demand.

While the TAT projects that the Thai hotel industry would lose about 12 billion baht in the wake of the Sept 11 events, major hotel chains showed healthy profits in the third quarter of 2001.

Central Plaza Hotel Plc reported a 237% improvement in net profit to 36.8 million baht, while the profit of Royal Garden Resorts Plc jumped 580% in the same period.

However, Chanin Donavanik, president of the Thai Hotels Association (THA) expressed concern that the industry may see more price-cutting next year to attract guests, as some five-star hotels had already started reducing room rates after Sept 11.

The THA has been promoting a more consistent approach to room rates, by introducing a star-rating system to classify the standards of its hotel members. Thailand is one of the few major tourism nations without a standard hotel rating system.

Mr Chanin said that 100 hotels would be rated early in 2002, with a total 400 hotels expected to be in the system by the end of the year.

The industry's other major concerns at the moment are the completion of the new Suvarnabhumi airport in 2004 and the development of improved immigration processing.

Somsak Thepsuthin, the Prime Minister's Office minister in charge of tourism, said that the cabinet had approved another 200 staff to be stationed at immigration points nationwide to help speed up processing.

By the beginning of 2002, Mr Somsak pledged, arriving passengers would spend only 30 seconds at immigration counters, which would be the fastest processing rate in the world.