Tourism associations form new cooperative
Tourism associations have joined forces to set up their own Thai Tourism Cooperative for Development to help them secure funding for operations after a year-long attempt to seek encouragement from the government proved futile.
Backed by the Board of Trade, the initiative was born out of desperation after it became clear there was no time to wait for help from the government. It is essential for the industry right now to move forward by having its own tool to facilitate its growth. And a cooperative is one of the best options, it was decided.
Suwadee Pachariyangkun, vice president for trade in services of the Board of Trade and a member of the Association of Thai Travel Agents (ATTA), said the co-op would be the first of its kind not only locally, but also in the Asean region. This will give operators more power, both commercial and financial, to protect their businesses from growing competition, especially from cash-rich overseas players.
Yesterday, the Thai Hotels Association (THA), the Thai Travel Agents Association (TTAA) and the ATTA met to discuss the co-op's direction. They agreed to accelerate the project and also voted for committees to prepare for its registration. It will be set up officially in six months with Weerasak Kowsurat, a former tourism minister, chairing the board.
At the meeting, some raised hopes that the co-op might succeed in mobilising Bt20 billion in capital by 2015 through selling shares for Bt10 each.
Suwadee called for the government to help support the measure by buying shares using tax revenue collected from the tourism business, which is a key industry driving the economy.
Udom Srimahachota, a THA member, said the co-op would extend credit to the members, especially those in financial trouble, at a special interest rate. Some operators have found that it is even harder now to get loan approvals from banks because of a lack of collateral.
Professionals have been hired to manage the funds raised, especially by investing them in tourism projects, to maximise the benefits to members.
"It will make the operators stronger for the advent of the Asean Economic Community in 2015. The funds will be useful for those wanting to expand regionally,'' he said.
The first task of the cooperative is to create a portal with the support of the Software Industry Promotion Agency. It is a platform integrating the tourism industry's business and information services. The portal software, which costs Bt20 billion to Bt30 million, will allow the co-op to offer business transactions such as online hotel bookings.
Weera Kumvisate, a consultant to the Cooperative Development Foundation of Asia, welcomed the step and said the co-op would be open to all principals in the tourism industry. They will have their own bank to conduct business activities.
The concept is very successful in Britain, he said. Its cooperative is more powerful in the retail industry thanks to its financial strength. Its store offers services ranging from the sale of products and insurance to tourism.
Also, Weera said, it moved into financial services via mergers and acquisitions. The co-op for Thai tourism could follow suit, especially by stitching together a network to connect with affiliated businesses such as travel insurance.