BANGKOK (Reuters) - A bomb that ripped through a religious shrine in Bangkok’s commercial heart, killing 22 people and wounding more than 100, could deal a heavy blow to a tourism sector that has been one of the few recent bright spots for Thailand’s struggling economy.
On Tuesday, less than 24 hours after the rush-hour blast, some tour operators were already reporting cancellations and Hong Kong issued a “red alert” travel advisory warning against non-essential travel to the Thai capital.
“This will have an impact on tourism,” Finance Minister Sommai Phasee told reporters. “But it’s difficult to estimate the impact on GDP because we are in the off-season now. We will have to wait until October for a clearer impact. We are praying that tourists will forget about this incident by then.”
Nine foreigners were among those killed in the attack, the motive for which remains a mystery.
“Our Japanese customers have all checked out this morning and bookings have also been canceled,” said Euamthip Panjai, general manager at All the Best Travel in Bangkok. “They may not come back soon.”
Thai hotelier Erawan Group, which operates the Grand Hyatt Erawan hotel located next to the shrine, said the company was assessing the impact from the blast.
After shunning Thailand during months of political turmoil leading up to a coup in May last year, tourists had been returning to a country famed for its beaches and nightlife, with foreign arrivals up 29.5 percent to 14.9 million in the first half of 2015.
On Monday, Thailand reported sluggish economic growth of 2.8 percent in April-June from a year earlier, with tourism a key driver. The sector directly accounts for around 9 percent of output, and as much as a fifth of GDP including indirect effects, according to economists at ANZ.
The Erawan Shrine targeted by the bomb is located in Bangkok’s Ratchaprasong luxury retail district, packed with upscale boutiques, eateries and offices.
Ittirit Kinglek, president of the Tourism Council of Thailand, told Reuters there had been some cancellations from high-end tourists so far, but not a significant number.
“We think if there are no further incidents the impact on tourism will be short-term,” he said. “Thailand will still be a destination that tourists would like to travel to.”
Hong Kong’s government was one of the first to warn citizens to steer clear of the area, issuing a red alert for Bangkok, its second-highest travel advisory on a three-point scale.
The biggest immediate reaction appeared to be from business travelers.
Alicia Seah, director of marketing and communications at Dynasty Travel in Singapore, said around 60 percent of the 150 travelers it had booked for Bangkok in September, many for meetings and conventions, had requested changes of venue.
“Usually when anything happens in a tour destination, I think the immediate impact is psychological. And I think the short-term impact is that they may avoid visiting the destination for a short period of time,” she said.
A receptionist at an international chain five-star hotel near the blast site, who did not want to be named, said that panicked guests called the reception after the attack but most had decided to stay.
“We all hope this is a one-off event,” she said. “They have decided to stay but, obviously, they are nervous.”
David Yeo, 60, from Singapore, who was staying with his wife at the Grand Diamond Plaza hotel about 1 km away from the blast site, said he was staying put. “I‘m not making any changes to my travel plans,” he said.
Haydn Long, a spokesman for Flight Centre in Australia, said the travel group had not seen widespread cancellations, but added that some travelers to Thailand’s islands and beaches might avoid the capital.
“What we saw a few years back, when there was civil unrest, was that people still traveled, they just perhaps stayed in Bangkok for one night instead of two or simply stayed away from those areas most affected,” he said.
Santitarn Sathirathai, an economist at Credit Suisse in Singapore said the government needed to show it has security under control. “Recovery in Thai economic growth is very fragile and highly reliant on tourism,” he said.
Additional reporting by Manunphattr Dhanananphorn and Khettiya Jittapong and Kitiphong Thaichareon in Bangkok, Aradhana Aravindan and Fathin Ungku in Singapore, Ever Tang in Hong Kong and Colin Packham in Sydney; Writing by Amy Sawitta Lefevre; Editing by Alex Richardson