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Thailand's Troubled Tourism Industry Struggles to Recover

Western tourists snap a souvenir photo at a Wat Pho temple in Bangkok, Thailand.

Visitor arrivals in Thailand's multi-billion dollar tourism industry have fallen by 19 percent this year. That’s a significant drop for an industry that outside groups estimate accounts for more than a fifth of the country’s economic output.

More than 50 countries cautioned their citizens about visiting Thailand since last spring's political upheaval and military intervention that included the imposition of martial law, which is still in place today.

In September, another incident cast more clouds over the country’s image. Two British tourists David Miller and Hannah Witheridge were found murdered on a beach in Koh Tao, an island in the Gulf of Thailand popular with foreign visitors.

Workers from Myanmar accused of murdering two UK tourists, Saw, left, and Win, sit together during a press conference in Koh Tao island, Surat Thani province, Thailand, Friday, Oct. 3, 2014.
Workers from Myanmar accused of murdering two UK tourists, Saw, left, and Win, sit together during a press conference in Koh Tao island, Surat Thani province, Thailand, Friday, Oct. 3, 2014.

After a weeks-long investigation that was widely criticized as bumbling, Thai police arrested two young migrant workers for killing the British travellers. But both of the 21-year-old men have now recanted their confessions, telling human rights lawyers they were tortured during interrogations.

The fallout from the murders appears to have further dented the country’s reputation among some travellers. A survey by global consulting firm Envirosell found that a third of European travellers say the murders affected the image of Thailand as a tourist destination. More than 90 percent of British tourists said they were aware of the killings.

But Pacific Asia Travel Association chief operating officer Mario Hardy said he expects the industry to recover by 2015 as news events, however tragic, fade into the past and the country regains its image as a holiday destination.

"These are very unfortunate events but they have an impact at the moment,” he said. “They have an impact and in a very short period of time people forget and they move on to something else."

Government not moving to mitigate issues

While the backpackers’ killings may fade from the headlines, Thailand’s military-ruled government has announced no firm plans to return the country to civilian rule.

Authorities also have not yet rescinded martial law, imposed shortly before the May coup. Businesses and the country’s tourism council have lobbied the military-backed government to lift martial law, which affects visitors' ability to purchase travel insurance.

"Actually we would like [the military] to lift the martial law,” said Supawan Tanomkieatipune, vice president of marketing for the Thai Hotel Association. “But it is quite impossible to have that. If this is impossible, then we just have to do our business with it [in place]. We have pressed them on many, many issues."

The downturn has also been profound for the lucrative corporate market. Many corporations postponed or relocated meetings, conventions and exhibitions, according to Dusit hotel and resort group Development Director Ryan Chen.

Despite the downturn, Tourism Authority Governor Thawatchai Arunyik believes traveller confidence is returning, especially for visitors to the island resort areas.

“I think many people understand Thai people very well,” Arunyik said. “We can see that if you compare with the tourist arrival - we have repeat visitors of more than 80 percent coming back. The destination that will struggle is Bangkok the capital, and then for the other destinations like Phuket, Pattaya, [and] Chiang Mai we do not have any problem."

The World Travel and Tourism Council data shows the tourism sector is worth $75 billion a year and in 2013 accounted for more than 20 percent of Thailand's national output.

In past decades, the tourism industry quickly rebounded from Thailand’s political crises. More than four months into Thailand’s latest round of military rule, officials and businesses are still waiting for the next rebound.