Downturn hits Khao San Road

Khao San Association president Surat Vongchansilp said 115 business operators and entrepreneurs in the area had folded in the past six months.

The 500-metre-long strip in the old part of Bangkok that has long been popular with Thais and international backpackers alike previously generated annual revenue of Bt2 billion to Bt3 billion.

But this year, the global economic crisis and Thailand's domestic political uncertainty led to a big drop in business during the first quarter.

Overall, Khao San Road may achieve only about Bt1 billion in revenue this year, Surat said.

"This narrow strip normally attracts about 10 million tourists annually, more than 70 per cent of whom are foreigners. But their numbers have dropped significantly since last year's fourth quarter," he said.

"Last November's shutdown of Suvarnabhumi Airport contributed to this big drop. We've seen a strong rebound in the number of foreigners, now nearing 95 per cent of the previous figures, but they're spending sharply less."

Khao San Road is popular among backpackers from Israel, Japan, England, France, Italy, the US and Australia.

Average spending previously ranged from Bt10,000 to Bt15,000 per head, because tourists usually stay on Khao San Road between five and seven days.

Now, spending has dropped to between Bt8,000 and Bt10,000 as visitors trim their budgets.

Surat said the Khao San Association, consisting of 280 small retailers, would negotiate with property-owners to reduce rents 30-40 per cent, in |order to reflect the business down-|turn.

Nongyao Vicharnpootorn, who operates New Joe Guesthouse near Khao San Road, said sales of many businesses in the area, such as restaurants, dropped 50 per cent in the first couple months of the year as foreign tourists spent less.

"However, we've seen a rebound in the number of backpackers in our 64-room guesthouse, which is now running at 80-per-cent occupancy," said Nongyao.

She said the number of foreign backpackers dropped almost 70 per cent during last year's political unrest.

"We've seen individual tourists from France and the Middle East start to come back to Khao San Road and also newcomers from Slovakia and China," she said.

Thanchalerm Khiewsri, who owns a hair salon on Khao San Road, said |his sales dropped significantly in last year's fourth quarter, from Bt2,000 on a normal day to between Bt500 and Bt600.

However, these past couple of months have seen an improvement to Bt1,500 on some days.

Khaosan Gallery owner Vichai Limsrikarnjana said unlike other businesses on the road, his gallery had not been severely affected by the economic downturn or political conflict.

"Almost 90 per cent of our clients are foreigners, but they don't buy our paintings on impulse. They really want them, for themselves or their special ones," said Vichai.