Carlson Hotels appoints Jay Krishnan Regional Director of Corporate Communications - Asia Pacific.
Archive for July, 2008
One-2-Go, the budget airline involved in the Phuket air disaster last October, will stop flying on Tuesday July 22nd for six weeks. The decision is based mainly on the rising cost of jet fuel amid stiff competition, as well as the looming law suits from its air crash that left 79 dead.
Described as financial restructuring for ‘damage control’ by CEO Udom Tantiprasongchai, the suspension will ground all eight MD80 jets that currently fly the Bangkok to Chiang Mai and Bangkok to Phuket routes. These ageing and noisy aircraft are particularly fuel inefficient and it has taken its toll on the five year old budget carrier.
The airline is suffering from loss during advanced sales of tickets, as fuel surcharges have been rising by the week this year, making it difficult for them to compete with AirAsia and Nok Air. Their tickets are typically 15 per cent more expensive.
The news comes just days after a US law firm announced it was leading a class action lawsuit against the airline and its insurance underwriter for failing to adequately compensate victims of the Sept 18 2007 air disaster that resulted from a crash landing in poor weather. The airline has already been sued in Thailand, the US and Britain.
It was launched in 2003 as a budget subsidiary of the small Thai airline Orient Thai, which continues to fly to Hong Kong and Incheon, in addition to charter services. No clear announcement has been made about its 700 staff or compensation for advance ticket sales, the usual booking service on their website having been replaced by a single notice of suspension.
Orient Thai website
Contact numbers: (66) 2 229 4260
Tourist arrivals during the upcoming high season in Phuket may well be lower than earlier projections anticipated, as rising oil prices and economic gloom are likely to deter some visitors.
The president of the Phuket Tourist Association, Maitree Narukatpichai, is suggesting that hotel occupancy in Phuket during the November to April high season will probably be around 70% compared to 75% in 2006-07 season.
Phuket now boasts 50,000 hotel rooms, with capacity up from the 40,000 rooms available three years ago, when the areas was rebuilding after the 2004 tsunami.
The tourism association is projecting that revenue from visitors to Phuket this year is likely to be in the range of 94-95 billion baht.
May and June hotel occupancy rates were only at the 10-15% level, compared with 50% occupancy during the same months in 2007. The significant rate decrease is attributed to the rise in airfares.
Long-haul airfares are typically 60-70% of the cost of a holiday for visitors to the area.
Phuket and nearby Krabi have been popular destinations for European tourists for years. These travellers are now facing fuel surcharges that add hundreds of dollars to the cost of their tickets.
The Tourism Authority of Thailand (TAT) is expecting a significant downturn in the number of international tourist arrivals for 2008 and 2009, owing mainly to the rising price of oil and subsequent cuts in inbound flights.
The TAT cut its projection from 10 per cent for 2009 over 2008 to a little over three per cent; a sharp downward. This translates to an initial projected of 17 million arrivals in 2009 down to 16 million arrivals, and just 15 million visitors for 2008.
This will naturally have a knock-on effect on the revenue generated by international tourism and TAT thus expect revenue growth to be half that of previous expectations - five per cent.
Spending per head is expected to increase from 38,760 baht in 2008 to 39,375 in 2009, however, owing mainly to the rising costs of consumables. The total revenue projection for 2008 is 600 billion baht, or about US $18 billion.
In comparison, TAT expects domestic travel of 87 million trips, bringing in revenue of around 407 billion baht, about US $12 billion.
International marketing deputy governor, Santichai Eua-Chongprasit, said the main negative factors affecting travel to Thailand were the high oil price, the downturn in the world economy and less flights to Thailand.
He also acknowledged that the travel industry to Thailand would be greatly affected if and when the oil price climbs to US$200 a barrel.
A noted industry expert has released a report demonstrating that Thailand is changing its image as primarily a destination for backpackers and is increasingly appealing to more upscale tourists.
A recent report was published in Luxury Travel Magazine indicating that the popular tourism destination in south-east Asia is rapidly gaining favor with travelers seeking luxury spas and the more personalized service of boutique accommodation.
Luxury Travel editor, Alyson Cook, commented that Thailand had been gaining popularity as a honeymoon destination.
She explained further: “The younger generation like the combination of a wonderful beach holiday in places like Ko Samui, [and] the opportunity to travel up into places like Chiang Mai [where they can see] elephants.”
The magazine’s editor noted that it was particularly the ‘understated luxury’ that top hotels in Thailand offer that is unique. She said also that Thailand features in the top three long-haul destinations on Kuoni Travel’s list, on a regular basis.
Another noteworthy item from the 2008 Kuoni Long Haul Report includes the fact that the boutique luxury holiday market continues to do well, even in a gloomy global economy.
Well-to-do travelers continue to pay top dollar for expensive holidays and say that they want their travel experiences to be special and memorable.
Struggling Thai budget airline Nok Air has cancelled its daily Bangkok to Krabi flight along with services from Bangkok to Ubol Ratchathani and from Bangkok to Chiang Mai.
Travelers who already have flights booked on those routes with Nok Air need not fret, however, as Thai Airways International will be stepping in for Nok Air.
Additionally, passengers with seats already bought and paid for can contact Nok Air and opt for a refund.
The CEO of Nok Air, Patee Sarasin, said that the airline has also been forced to cut managerial salaries by up to 20 per cent to save the airline four million baht per month, ultimately in order to save the airline from going under.
Khun Patee also said that he is considering increasing fares by up to 240 baht per route.
Like so many other airlines around the world, Nok Air is struggling with the insatiable rise in fuel prices due to the high price of oil. With the subsequent rise in flight prices, less people are flying and the airline is losing millions of baht every month.
Despite reports by some media sources, Nok Air will not cease all operations, Khun Patee added.
The Thai baht onshore and offshore rates have now equalized following the lifting of the reserve on March 3, said Bank of Thailand (BoT) governor Tarisa Watanagase.
The 30 per cent withholding measure was imposed in 2006 to stem the baht’s speculation due to the gloomy economic outlook back then, and was a bonus for foreigners bringing in currency and utilizing the higher onshore rates.
Khun Watanagase said that the baht had equalized automatically, ‘without intervention’, following the reserve lift and that the economy had improved.
Onshore traded baht is now a lot closer to offshore traded baht since the measure was scrapped, with onshore and offshore dollar transactions at about 31.41 and 31.42 respectively.
Previous figures at the offshore rate of 31.42 baht to the dollar would have seen an onshore rate at roughly 34!
Thailand’s international reserves have also risen sharply in the last couple of years - at US$108 billion today compared with $67 billion at the end of 2006.
Bangkok’s new Suvarnabhumi airport has been given the go ahead with the second-phase of expansion to include a third runway and a new domestic terminal.
A total of 10 new projects worth in excess of 73 billion baht will be undertaken by the Transport Ministry.
Two of the 10 projects will be implemented this year, including the construction of the third runway. Future projects will include an automated people-mover, a new car park, as well as the ongoing reduction of noise pollution over five years.
The creation of the new domestic terminal will relieve congestion at the main terminal and will cost in the region of six billion baht.
Interim Prime Minister Surayud Chulanont originally put the airport expansion plans on hold and re-opened up Don Mueang airport to save money.
Don Mueang made way for the new Suvarnabhumi in late September 2006 but was reopened for domestic flights.
Since then Suvarnabhumi Airport has been beset by construction flaws, including cracks in the main runway, as well as corruption scandals.
The new expansion scheme would run from 2008 to 2013 and when finished would enable Suvarnabhumi to serve 60 million passengers a year; an extra 15 million passengers over its current 45 million.
It is also likely that the new work would signal a closure of Don Mueang airport by the government.
AoT have earned more than 10 billion baht from the management of Suvarnabhumi airport and would be footing the bill.
As part of the runway expansion, the third runway will feature an auto-landing system allowing aircraft to land even in low visibility conditions.
Suvarnabhumi may then receive a safety measure of three, with Category 3 being the safest. In comparison, regional airports have a category rating of 1, with Don Mueang being Category 2 rated.
Plots of land on the eastern side of the airport will also be surveyed for the project.
More than 200 people across Thailand have already lost their lives over the period from Friday through Monday during the Songkran festival.
This year’s water festival has already seen more people killed and injured on the roads than at the same point last year, with 229 dead and over 3,300 injured - around 5.5 per cent up on last year.
Petchabun province had the highest death toll with 11 dead so far, followed by Rayong, and Suphan Buri provinces.
The highest number of accidents was in Chiang Rai province, at 50, followed by Phetchabun province at 42.
Most accidents occurred on village roads and mainly at night with the great percentage of those being alcohol-fueled.
Although the powers-that-be were thinking of imposing a ban on the sale of alcohol over Songkran; in reality, people will just hoard beer and spirits before the event.
The Thai Red Cross has reported that it was running out of blood supplies and needs about 1,500 units of blood daily during this busy time, whereas it only received 973 units on April 12 and 950 units on April 13.
Blood goes to hospitals nationwide from the red cross’s blood banks.
Tourists taking part in the Songkran festivities are advised not to ride motorcycles and take public transport.
This year’s Songkran water festival will commence on Saturday April 12th and continue until Tuesday 15th, as gazetted by the Government. Since it falls over a weekend, a further holiday has been added on the 16th, although banks will open on this day.
Songkran is the busiest of Thailand’s festivals and is a time when many Thais travel home to visit their families, making travel in the Kingdom crowded. Tourists are advised to make their plans in advance or avoid travelling during this period, especially on highways when accident rates increase.
Traditionally the splashing associated with Songkran starts several days in advance of the official dates (which according to the lunar calendar should commence on Sunday the 13th this year), therefore the whole country descends into an anarchic-like water fight for almost a week. Traffic jams ensue in the cities, and those travelling by motorbike find themselves drenched by roadside revellers.
Visitors who wish to avoid the water fights are advised to stay within the grounds of their hotel, take day trips away from the busy areas or travel by taxi. But the vast majority enter into the spirit of fun and join locals in the world’s biggest water fight. The centre of urban areas, or locations near water are most populoar and lively and each city has a focal point for fun. In Chiang Mai - considered the best place to experience Songkran - the action is all around the moat, in Bangkok it can be found on the Khao San Road, while Pattaya’s walking street is the ‘wet’ venue. In Phuket, Patong beachfront is perhaps the most popular, while other busy beach areas will also be active.
The first official day, Sunday, is likely to be the best day to participate, as the festival wears on people become tired and the turnout and atmosphere of the third day, Tuesday, is likely to be less lively. These are usually pre-occupied with the procession, while many Thai perform their traditional duties on these days. However, there is always a busy itinerary of events throughout the festival, taking place at local civic centres and temples, including sand castle building, parades, beauty pageants and more. Read your local press for more details.