Drinking, Partying Off Limits in Thailand as Death of King Hits Tourism

  • Thai government calls for nation to avoid “joyful events”
  • SET Index, baht climb on optimism transition will be smooth

People queue to pay their respects to late Thai King Bhumibol Adulyadej in Bangkok on Oct. 14.

Asia’s airlines, tour agents and cruise operators are on alert for a tourism slowdown in Thailand, where partying and drinking alcohol in public are off limits following the death of King Bhumibol Adulyadej.

The government called on the country to avoid “joyful events" for 30 days and to dress in mourning for a year. Travel companies across the region say they’re now trying to grasp the potential consequences for their businesses.

Japan Airlines Co. and Hana Tour Service Inc., South Korea’s biggest tour operator, expect a dip in demand during the mourning period, while representatives for Korean Air Lines Co. Asiana Airlines Inc. and Jetstar, which is owned by Qantas Airways Ltd., said they’re monitoring the situation.

“In the short term, we could possibly get some weak data and I’m sure tourist arrivals will be affected,” Sean Darby, chief global equity strategist at Jefferies Group LLC, told Bloomberg TV in Hong Kong, adding he doesn’t see any dramatic changes to policy. “There’s going to be knock-on effect generally from industry slowing down,” but short-term outflows will be “easily managed by the authorities,” he said.

While it’s too early to gauge the immediate impact on tourism, any alcohol restrictions and 12 months of mourning may make Thai resorts less attractive for some vacationers. Thailand has long been a favorite destination for European and Asian holidaymakers, who are drawn to Bangkok’s nightlife and southwest island resorts such as Phuket. 

Thailand’s economy has come under strain in recent years given weak global demand, a slowdown in private investment and inflation near zero percent. Tourism, one of the bright spots fueled by visitors from China, accounts for at least 10 percent of the country’s gross domestic product. That’s helped the Southeast Asian nation boost foreign-currency reserves and run up one of the highest current-account surpluses among emerging markets.

The country attracted 7.9 million visitors from China last year, a 70 percent increase from 2014, and posted a quarterly record for Chinese visitors again in the three months to March this year.

The military government has also been betting on more than $18 billion in stimulus measures for farmers and small businesses to help boost local demand and offset a decline in exports.

China’s embassy in Thailand issued a notice on its website to remind Chinese tourists to follow the traditional customs at public places during this time.

The passing of the world’s longest reigning monarch, at the age of 88, was announced on Thursday evening in Bangkok. The national broadcasting regulator banned entertainment programs for 30 days and warned television and radio to follow palace protocol in airing news about the king’s death.

“We are concerned about tourism demand from Japan for a month” with the curbs on entertainment, said Norihisa Hanyu, a spokesman for Japan Airlines, adding the carrier isn’t too worried because Thailand is a “tourism nation” and demand would pick up once the mourning period is over.

Programming on every television channel in Thailand was replaced by documentaries about the king’s life. The regulator said that would continue until further notice.


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Fairly Immune

Kee Chou Ng, a Kuala Lumpur-based analyst with RHB Capital Bhd, said he’s not anticipating a significant impact on tourism in Thailand, since travelers across the world have become fairly immune to political developments in the country. As an example, he cited the fact that recent terror attacks and political uncertainty had little effect on arrivals.

“People globally have internalized all of these shocks,” Ng said by phone. “Even after the bombings, you saw tourism bookings way up. Thailand is expanding its airports and they are building roads to new tourism hotspots.’’

Ng said he’s estimating Thailand will receive more than 33 million tourists this year, and 36 million in 2017, up from about 30 million in 2015.

Underscoring optimism there will be a smooth transition, Thai stocks jumped the most since October 2011 and the baht strengthened. The benchmark SET Index surged 4.7 percent, while shares of Thai Airways International Pcl climbed as much as 17 percent.

Ships run by Royal Caribbean Cruises Ltd., Princess Cruises -- which is owned by Carnival Corp. -- and Costa Cruises are among those due to visit Phuket this month.

No Cancellations

A spokeswoman for Costa Cruises in Hong Kong said the company is assessing whether any changes need to be made. Royal Caribbean said it doesn’t see any impact on bookings and doesn’t plan to change itineraries. A Sydney-based spokeswoman for Princess Cruises said the company is checking for any impact on services from the king’s death.

Some companies saw little impact from the king’s death.  

No tours have been called off so far, said Steve Huen, executive director of Hong Kong-based travel agency EGL Tours. And even if some shows like concerts are canceled, there’s flexibility to change trip schedules, he said. Hamzah Rahmat, president of the Malaysian Association of Tours & Travel Agents in Kuala Lumpur, said he hadn’t received any reports of cancellations and saw no reason to alter itineraries.

“Life has to go on, and I think business also has to go on,” Hamzah said.

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