Bangkok Tourists Vanish on Floods Leaving Hotel Bars Empty

Saijai Sooksai kills time by arranging and rearranging T-shirts imprinted with Ferrari and Ralph Lauren logos at her streetside stall in Bangkok’s main tourist district. She has little else to do as Thailand’s record floods deter visitors.

“Business is really bad as tourists from Europe and the Middle East have almost all vanished,” said Saijai, who has run a stall on Bangkok’s Sukhumvit Road near the Nana area for more than a decade. “I should be easily getting 10,000 baht ($326) a day this time of year, but now I earn only a couple of hundred some days -- not even enough to cover my rent.”

While central Bangkok has avoided flooding so far, hotels and office buildings have erected walls of sandbags to protect against waters that have killed more than 500 people nationwide. The threat has also deterred tourists, forcing Singapore Airlines Ltd. and Cathay Pacific Airways Ltd. (293) to cut flights, hitting reservations at Shangri-La Asia Ltd. (69) hotels and contributing to the central bank cutting its growth forecast.

“The leisure business has disappeared for the time being,” Cathay Pacific Chief Executive Officer John Slosar said on Nov. 4 at an airline association meeting in Seoul. “If you have an option to go, probably you won’t because nobody can quite tell what you’ll get when you get there.”

The airline has cut one of its five daily services to Bangkok, and is only filling about 50 percent of seats on its remaining flights, he said. Normally, the flights would be around 80 percent full, he said. Disruptions may not last long, he said.

Sukhumvit Still Dry

The flood waters haven’t directly affected Bangkok’s main tourist-shopping hub of Sukhumvit and Rachaprasong or the Silom business district. Other popular Thai holiday destinations such as the beach resorts of Phuket and Koh Samui have also avoided flooding.

“You see here, there isn’t even a drop of floodwater,” said Saijai, 54, the Sukhumvit stall owner. “The media have painted an exaggerated picture of the floods to the world.”

The floods have spread across 64 of Thailand’s 77 provinces over the past three months, shuttering 10,000 factories. Bangkok supermarkets have also run short of necessities, such as rice, instant noodles, eggs and bottled water, because of hoarding and supply-chain disruptions.

Cancellations at Bangkok hotels have accelerated in the past week as concerns about flooding prompt customers to alter plans for meetings, weddings, events and holidays, said Prakit Chinamourphong, president of the Thai Hotels Association, which represents about 765 of the nation’s 4,000 hotels.

Occupancy Rates Slide

Occupancy rates in Bangkok fell to about 60 percent in October from as much as 75 percent a year earlier, he said. The level may drop to 70 percent in November, from as much as 85 percent in previous years, he said.

“I’m worried that no one can guarantee floods will not enter inner Bangkok,” he said. The government has bolstered levees and built a 6-kilometer (3.7-mile) wall of sandbags to hold back the floodwaters in the capital.

Occupancy levels began declining on Oct. 23 and that was followed by a decrease in average room rates, said STR Global, an industry researcher. The Bank of Thailand on Oct. 28 slashed its economic growth forecast for this year to 2.6 percent from 4.1 percent.

Shangri-La

The floods may cut domestic tourism revenue by at least 10 billion baht, said Piyaman Tejapaibul, chairwoman of the Tourism Council of Thailand. The council has yet to estimate the impact to revenue from overseas tourists, worth about 600 billion baht annually, she said.

Tourism accounts for about 7 percent of Thailand’s gross domestic product, according to government data.

Yesterday, the bar and lobby lounge at the Shangri-La Hotel, which sits on the eastern bank of the Chao Phraya, were almost deserted, with only one family dining in an area that seats more than 100. Sandbags have been erected outside the main doors and by side entrances, and the hotel has water pumps on standby in the event the river spills over its banks at high tide.

Occupancy levels are less than half the expected 76 percent rate, primarily because of a drop in conference and business bookings, said spokeswoman Rashana Pimolsindh. The hotel is also posting twice-daily updates about water levels on its website and Facebook page, she said.

There has also been a dip in bookings at the Swissotel Nai Lert Park, near the Central Chidlom shopping mall, said General Manager Torsten Pinter. The property hasn’t been affected by flooding, he said.

Travel Warnings

“There have been cancellations from the leisure and corporate segments as well as events business,” he said. “Some local businesses have canceled events due to the fact that many of them have been affected directly with their own or their families’ homes being flooded.”

Group tours to Bangkok, particularly from China and Hong Kong, have been canceled following travel warnings, said the Tourism Council’s Piyaman. European groups are generally choosing to visit unaffected areas of Thailand, she said. Australia, China, Japan, Singapore and the U.K. are among nations that have advised against non-essential travel to Bangkok or other parts of Thailand.

“Passengers are down a lot,” Piyasvasti Amranand, president of Thai Airways International Pcl (THAI), said at the Seoul conference. “No one wants to come to Thailand with travel warnings issued by so many countries.”

The floods have “affected badly” All Nippon Airways Co.’s operations, said Chief Executive Officer Shinichiro Ito.

Suvarnabhumi Airport

Bangkok’s main international airport, Suvarnabhumi, is protected by a 3.5-meter-high flood barrier, and has remained open throughout the flooding. The domestic airport at Don Mueang was shut on Oct. 25 as floodwaters covered the runway and began seeping into the terminal buildings.

Thai Airways has begun moving employees to Suvarnabhumi because floodwaters have risen outside its headquarters in northern Bangkok, Raj Tanta-Nanta, the company’s vice president for investor relations, said today by phone.

Authorities last month released more than 9 billion cubic meters of water down a river basin the size of Florida, with Bangkok at the bottom after monsoon rains filled dams north of Bangkok to capacity. Rainfall this year has exceeded the average by about 40 percent, according to government data.

Rebound

Airlines and hotels are hoping that that travel demand may rebound later in the month and into December as floods ease and as the end of year holidays approach. Shangri-La and Swissotel Nai Lert Park both said they were optimistic that bookings may pick up, even if they fall short of predictions made earlier in the year.

Cathay’s Slosar also said the airline was hoping the disruptions will end before Christmas and the New Year, when flights are usually fully booked.

“You will find people going back,” said Tan Chik Quee, Singapore Airlines’ senior vice president of marketing. “We don’t expect to see any problem toward the year-end holidays.”

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Neil Denslow at ndenslow@bloomberg.net; Tony Jordan at tjordan3@bloomberg.net

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