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Thailand's Tourism Industry Falls Victim to Bangkok Protests

An industry association warns Thailand's tourism business faces staggering losses this year because of the confrontation between anti-government protesters and security forces. Many tourists have canceled travel to Thailand or have fled areas caught up in deadly clashes in the past few days.

The Federation of Thai Industries says the political conflict could cost the tourism industry more than $1 billion, after images of deadly clashes between anti-government protesters and security forces were flashed across the world.

The FTI says hotels, restaurants, souvenir shops and shopping malls near the protest sites would be hardest hit.

More than 40 countries have issued travel warnings regarding Bangkok.

Khao San Road is a popular tourist area in the city, and it is close to the location of the worst violence on Saturday, when more than 20 people died, and hundreds injured.

Kumtan drives a tuk-tuk, or small three-wheeled taxi, on Khao San.

Kumtan says foreign travelers will stay away this year because they are afraid. He says is not good and will hit his income hard.

The protesters largely support former Prime Minister Thaksin Shinawatra, who was ousted in a coup in 2006. They want Prime Minister Abhisit Vejjajiva to resign and call new elections. They began mass protests in the city a month ago.

Even before the violence, hotels in Bangkok reported that 20 percent of their reservations were being canceled by travelers concerned by the protests.

Tourism industry officials expect visitor arrivals to fall to about 14.5 million this year, one million less than had been expected, because of the protests. Tourism accounts for some six percent of Thailand's national income.

One of the main protest sites is in the heart of a large shopping, hotel and transportation hub. As a result, hundreds of popular shops have been forced to close ever the past week, with hundreds of millions of dollars in losses.

The violence led to the Bangkok city government to cancel official celebrations for the Thai New Year, the Songkran festival, which begins Tuesday.

Alice, a tourist from France, says she notices the difference in atmosphere among the people.

"All the people are very stressed, stressed out," she noted. "People from Thailand are not like this usually, they are not like smiley people. This is just weird ambiance."

Small companies are especially at risk because they lack cash reserves. Krishna at a Khao San tailor shop says his business is suffering.

"This month is almost no business at all. It's been very quiet right now. Khao San is the most busiest during the festival, but this year seems like nobody here. It's almost empty around here," he noted.

Bob James, tourism industry consultant, says while the situation is serious, he expects tourism to recover.

"It's a serious situation but I also think you have to put things into context," he explained. "Thailand is renowned for its tourism - it's one of the major tourism players in Asia and always has been. It's had its challenges and ups and downs but has rallied and come through."

Thailand's tourism authority is planning to begin a new wave of promotions once the political conflicts subside.