High baht yet to hit tourism, operators say
The stronger baht has not flustered the tourism scene so far, but operators are monitoring the situation closely so that they can make adjustments to cope with any change in the business environment."I don't think that its appreciation right now is a risk for the tourism outlook. I believe tourism operators can survive at the existing rate," Yutthachai Soonthronrattanavate, president of the Association of Domestic Travel, said yesterday. "But if it keeps getting stronger, they will look for ways to sell their services."
He said he personally favoured an exchange rate Bt30.5 to the US dollar.
More Thais are expected to go overseas, but there should not be any problem because many of them will choose Asian destinations, especially for shopping, and will not have to rely on the US dollar. They will use this opportunity to get new experiences, he said.
The currency issue has not reached critical proportions because it has only been a short-term phenomenon. But if the situation lasts longer than four months, operators across the country will feel the pinch. Especially if it drops below Bt29.50, they will suffer a sales loss of 10 per cent, leading to a tourism-revenue loss of more than Bt10 billion for the country, Yutthachai said.
In the old days when the baht was whipped around by economic crises, operators charged their customers in US dollars as a way to maintain their business. This is a good example of what they can do. But the biggest concern is the export sector, which will get hurt with sales contracting, he said.
Piyaman Techapaibul, president of the Tourism Council of Thailand (TCT), said tourism continued to hum. Even with the stronger baht, the country still offers "value for money" to foreign travellers compared with other Asian countries.
For example, accommodation costs here are lower than elsewhere in the region. In 2011, the average hotel room rate in Thailand was US$97 (Bt2,900), while Malaysia was at $117, Singapore at $232, Hong Kong at $242, South Korea at $147 and Japan at $164.
"Even though the baht is on the way up, it has been only a 3-per-cent rise. So the Kingdom is considered a major destination regionally," Piyaman said.
However, a worse case would be if the exchange rate moves on a similar path as the British pound, falling from Bt70 to about Bt49.5.
The increase in the baht's value has not completely hurt the tourism industry. In fact, it helps improve the industry's confidence indirectly, as it shows that it is in demand thanks to the inflow of investment, reflecting a growing economy and a fertile ground for investment. This picture disappeared from the tourism scene four years ago, she said.
Pornthip Hirunkate, TCT's vice president for marketing and also managing director of Destination Asia Co, an inbound tour company, said the government should take a closer look at the situation and the exchange rate should be set at Bt30. So far, the industry is still business as usual. However, foreign tourists staying here will start feeling the difference.
In general, package tours for foreign tourists are sold six months in advance.