Protests wipe away Thailand's Land of Smiles image

By Darren Schuettler

BANGKOK (Reuters) - Stranded holidaymakers sleeping on luggage trolleys. Masked militants shooting at each other. Club-wielding protesters roaming through an airport terminal.

The chaotic scenes shown around the world from Thailand in the past week have shattered its carefully managed "Land of Smiles" image, badly damaging a key sector of the economy that could take years to recover.

"I have never faced this in my life," Apichart Sankary, president of the Association of Thai Travel Agents, told Reuters as anti-government protesters ended their crippling 8-day siege of Bangkok's main airports.

He predicted a fall of one million tourists in the November-March high season due to the rush of cancellations, costing the industry more than 100 billion baht in revenue.

One minister said 2009 arrivals could drop to 6 million from an initial target this year of more than 14 million. Another said last week's anarchy was like shooting yourself "in the head."

Luxury hotels in Bangkok, normally packed with foreigners ahead of the busy Christmas and New Year holiday period, were counting up their losses.

Erawan Group, which has several hotels including the Grand Hyatt Erawan, said its occupancy rates had plunged by 50 percent since the airport blockades began on November 25.

William Heinecke, chief executive of Minor International PCL, said their rates had dropped to 30 percent.

"The occupancy rate is very low right now because everybody is leaving Thailand and nobody is coming back," he said, although they planned no layoffs at the moment.

Other hotel chains are cutting back the hours of their staff. Some have stopped expansion projects due to the gloomy outlook for tourism, and the broader economy amid a global slowdown.

"People are going to be avoid this place like the plague," said one Bangkok-based organiser of international exhibitions and trade fairs, which draw thousands of delegates to Thailand.

"It's terrible. We're not launching any new shows in Thailand," said the businessman who did want to be named for fear of losing government contracts.

SECURITY BREACH

Home to some of Asia's premier beaches and resorts, Thai tourism had been remarkably resilient despite SARS, the Asian tsunami, bird flu, a Muslim insurgency in the deep south plus a military coup in the past five years.

It all changed last week when hundreds of yellow-shirted members of the People's Alliance for Democracy (PAD) invaded Suvarnabhumi international airport, severing Bangkok's main air link to the outside world.