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PussyLover 69
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Report from Bangkok Post dated 25 December 2006 :-
Travel and tourism weathers baht storm
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By Imtiaz Muqbil
The Thai travel and tourism industry has shrugged off both last week's turmoil in the stock market and as the strengthening of the baht as having no immediate or short-term impact on either visitor arrivals or occupancies.
However, a number of hoteliers and other industry executives said the situation may begin to have an impact if it persists over the long run. Not a single one of the executives says they plan to lose any sleep over the holiday season.
Currency fluctuations usually have significant impact on the travel and tourism industry - from daily visitor expenditure to borrowings, investments, airline profits, marketing budgets, hotel room rates and choice of destinations.
These days, the weak dollar is keeping American travellers closer to home while attracting visitors to US shores from strong currency regions such as Europe and the UK.
Since the 1997 economic crisis, Thailand has positioned the relatively weak baht as an important component of its "value-for-money" marketing strategy, a pitch that is working well.
Suraphong Techaruvichit of the Asia Hotels Group and head of the marketing committee, Thai Hotels Association, said it was proving to be an excellent high season for Thailand, with full occupancies at nearly all the tourism centres.
"Pattaya and Phuket are all overbooked," he said. "The baht should not get any stronger than this. Luckily, the Bank of Thailand has already acted to prevent the baht from getting stronger, so we don't expect any major problem."
He said he did not think any rate adjustments would be required as most of the hotels were already quoting in baht anyway.
Chatchawal Supachayanont, general manager of the Dusit Resort Pattaya said the resort was packed and his property in particular was doing very well from the UK market.
"Most of our visitors are from Europe and the UK, and they don't depend on how the dollar is doing. There is no impact on us here."
One investment banker rued the "convulsions" that had taken place. "We knew from the moment they (the Bank of Thailand) acted what the reaction would be. And that's exactly what happened.'
He noted that there was still some confusion about whether the restrictions that applied to investments in condominiums also applied to the hotel and accommodation sector, and anticipated that unless they were clarified, it would have an impact on investment.
"Certainly the property guys will be annoyed," he said. "They certainly don't want the music to stop." He said those developers with ongoing projects would hit some uncertainty.
Wallop Bhukkanasut, an executive vice-president of Thai Airways International, said he did not think it would be an issue at the annual shareholders' meeting this week.
"It will definitely have some impact on the bottom-line but it looks as if [the situation] is easing a little after the Bank of Thailand intervened."
He said the airline had calculated its budgets based on the dollar moving within a bandwidth of 37.50 to 40 baht, and if the dollar sinks any further, the airline would have to act to see how best to manage its currency mix in terms of its debt and projected earnings, the vast majority of which are in foreign currencies.
Mr Wallop noted that the overall environment for the airline industry was getting increasingly volatile, compounded by high oil prices and other problems beyond anyone's control.
He said it would be useful if politicians and governments worldwide adopted a "more realistic approach of how we do business and realise that we are no longer a luxury but a necessity. They need to stop accusing us of being responsible for global warming and hitting us with all these carbon taxes and charges to curb environmental damage."
"We're not the bad guys compared to all these other [means of transport] blowing smoke all over the place."
The one area that may be affected somewhat is the US dollar salaries earned by expatriate general managers and hotel executives. Some said they expected these would be up for renegotiation, depending on the overall package being earned and how well the respective properties and companies were performing.
If it persists, a stronger baht is also expected to lead to more outbound travel from Thailand, which would narrow the large gap with the kingdom's inbound arrivals but also curb the huge surplus in overall tourism earnings.
In 2004-05, the Tourism Authority of Thailand has used the rate of 40 baht to the dollar to calculate visitor expenditure.
Based on that, inbound tourism earnings were pegged at 367.3 billion baht (or roughly US$9.13 billion) while outbound expenditures were calculated at 80.7 billion baht (US$2 billion), generating a surplus of more than US$7 billion.
The biggest spenders among inbound visitors are from Kuwait, Hong Kong and Austria. Outbound, Thais spent the most in Eastern Europe, Japan, the UK, Taiwan and Korea.
Imtiaz Muqbil is executive editor of Travel Impact Newswire, an e-mailed feature and analysis service focusing on the Asia-Pacific travel industry.
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Posted on: 3:03 am on Dec. 25, 2006
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PussyLover 69
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Quote: from Gyaos on 4:03 am on Dec. 24, 2006
The restrictions still remain on foreign investment on bonds and property.
Report from The Nation dated Monday 25 December 2006 :-
BoT may exempt property funds from capital control
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The Bank of Thailand said Monday it may exempt foreign investment in property funds from the recently introduced 30 per cent reserve requirement rule on capital inflows.
According to Pongpen Ruengvirayudh, Bank of Thailand's senior director for financial markets and the reserve management department, the central bank needs some time to study if the easing of the rule (on property fund investment) would affect the effectiveness of such measure in curbing the baht's appreciation.
The Bank of Thailand last week said it requires 30 per cent of most foreign capital inflows unrelated to trade and services to be deposited in a non-interest account with the central bank for a year as it sought to tackle speculative capital inflows which pushed the baht to a 9-year high.
Capital inflows related to foreign direct investments in equities, properties, tourism, education, health, transportation and diplomacy are exempted from the requirement.
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Posted on: 3:17 am on Dec. 25, 2006
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PussyLover 69
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Report from The Nation dated Tuesday 26 December 2006 :-
Tarisa says capital control measures to stay 3-6 months
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Bank of Thailand Governor Tarisa Watanagase said Tuesday that the austere capital control measures will have to remain in place for at least three to six months, AP Dow Jones reported.
Tarisa told Dow Jones Newswires in an exclusive interview Tuesday that exemptions won't be granted for investment in property funds or for loans between firms in Thailand and their offshore parent companies, and that the overall framework of the measures would stay in place for as long as necessary.
"There should be a time frame (for the 30% withholding on certain capital inflows) of at least three to six months. Once we put these measures, we need to be sure" that the problem with the baht has been resolved before they are revoked, Tarisa was quoted by AP Dow Jones as saying.
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Posted on: 1:23 am on Dec. 26, 2006
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