Operators counting on new stimulus

Retailers and domestic tour operators are waiting for new government measures to stimulate consumer spending next year after people's purchasing power significantly declined in the second half of this year.

The Thai Retailers Association (TRA) said it has so far seen no government policies that would make a direct impact on the retail industry next year.

Concerns about falling purchasing power and negative shopping moods due to the political turmoil have directly affected the growth of retail sales this year.

The 2013 retail sales growth projection will be cut to 8-9% from 13% forecast earlier.

Chatrchai Tuongratanaphan, an executive consultant to the TRA, said the 2-trillion-baht infrastructure investment scheme is expected to stimulate the overall economy, and the sector benefiting from it is property.

Retail businesses will start booming 8-9 months after the scheme's budget is disbursed.

Signs of a decline in the retail industry started in May. Consumer purchasing power for durable goods has grown, while sales for semi-durable goods have lagged and those for non-durable goods not expanded at all.

"This already shows that the purchasing power of grass-roots people has weakened," Mr Chatrchai said.

He said the agriculture and industrial sectors are the backbone of the Thai economy, and those sectors are not doing well.

In the past, they took turns slowing down and the healthier one offset the impact from the other.

For domestic tourism, Yutthachai Soonthronrattanavate, president of the Association of Domestic Travel (ADT), projects domestic tourism will total 90 million trips this year, generating revenue of 440 billion baht.

That is lower than the Tourism Authority of Thailand's projection of 129 million trips and 642 billion baht in revenue.

The political crisis is the key factor dragging down domestic tourism during this peak season. As well, the government has been paying more attention to international tourism than domestic travel.

This is different from many countries that have focused on strengthening domestic tourism.

"I think the current political unrest is worse than the situation in November and December 2008, when yellow-shirt protestors seized airports. Now we don't know how it will end or what will happen next. This directly affects small domestic tourism operators," said Mr Yutthachai.

The ADT wants the government to help small and medium-sized enterprises by giving them low-interest loans to help them survive the hard times.

There are 2,000 legitimate domestic tour operators, and the ADT expects 15-20% of them may become weaker or be out of business next year.

Share your thoughts

Discussion 1 : 11/12/2013 at 11:31 PM
Giving low cost loans to tour operators could be the final "straw on the camel's back" as far as tourism is concerned. Sure, it could work IF, ( a big if), tourism returns to Thailand in increased numbers but ,,,,,, there is no reason to believe it will. Other countries have been making big strides in modernizing visa rules, tourist attractions, safe transportation, secure law enforcement, etc., while, as I see it, Thailand has been standing still. Allow the loans, which every tour operator will gladly take, tourism doesn't return in substantial numbers and the loans become NPL. ( non performing). Yagotta have sumtin to tour !
Discussion 2 : 08/12/2013 at 10:15 AM
Stimulus creates debt. It does not create sustainable growth. But politicians will never stop loving it anyway.
Discussion 3 : 07/12/2013 at 06:31 PM
Your point is valid, but it was not Clinton. Greenspan and the Treasury allowed ease of loans. Greenspan was also head of Fed during Bush senior and Bush junior as well.
Discussion 4 : 07/12/2013 at 06:08 PM
It's simple, treat people with respect not ATM's stop the scams make it easier for people to get visas, there are a lot of people who have had enough of Thailand because it is not good value for money , the TAT says tourism is up, yes it is filling up with Chinese and Russians, believe me there are a lot of Europeans that are going else where,
Discussion 5 : 07/12/2013 at 05:42 PM
I am always amazed about "growth projections". One takes a number that sounds nice and says "so will it be" These numbers are based on what exactly? But during the year they become kind of true and we hear that it will only be this or that instead of. Is this now less than could have been or less than one wished for? And yes, tourist pricing and scamming sure help to attract more of them. And yes, the infrastructure scam will help MBK hairextension sellers.
Discussion 6 : 07/12/2013 at 01:25 PM
Selling overpriced junk to tourists is a worldwide thing. If the government wasn't so unstable, maybe more people would visit.
Discussion 7 : 07/12/2013 at 12:55 PM
Pheu-Thais answer is put everything on the credit card. Everything is great for a while, but soon enough it will be at the limit and billions will be spent on interest for decades to come. Not that they care about that : they expect to be rumbled before then, so they will make hay while the sun is shining.
Discussion 8 : 07/12/2013 at 11:53 AM
I am sure when all the people loose the cars they bought ,that they couldn't, nor fully understood the rebate...spending will be back to normal
Discussion 9 : 07/12/2013 at 11:19 AM
Domestic spending is down because household debt has been increasing. Why is it increasing? because of the lax loans given out. Just look at the US Housing crisis, it crashed because clinton wanted people to afford houses, so he made it easy for people take loans out, compound that problem with greedy banks, you have a recipe for disaster.
Discussion 10 : 07/12/2013 at 11:04 AM
Every growth projection from banking, exporting, tourism, confidence etc. are all falling. Whilst the rest of the world are slowly coming out of recession Good job you are doing Thaksin led government
Discussion 11 : 07/12/2013 at 10:43 AM
Can't see the wood from the trees.
Discussion 12 : 07/12/2013 at 09:48 AM
Why do they have to make up terms like stimulate the economy .Why cant they just tell it like it is and say we are doing badly because of poorly thought populist handouts so we are going to waste more taxpayer money so we can later point out there was growth when there really wasn't .
Discussion 13 : 07/12/2013 at 09:29 AM
Tourism decline has nothing to do with the government wanting to tax excessively and insist on medical insurance a rail system that came of of the ark,2 hr to get through visa and passport controle,all the scams that go on to rob tourists like Taxis,jet skiys, charging foreigners 4 times the entry fees for national park or to see a show in Pattaya its getting like the rice pledge in reverse.This is a wonderful country spoiled by a few greedy individuals who frankly are incapable of understanding the aspirations of tourists and have little idea of basic marketing .Wake up and invest in some new blood they could come up with some good ideas.
Discussion 14 : 07/12/2013 at 09:02 AM
They want customers but can't seem to stop putting on makeup or talking on the phone when you come to buy something.
Discussion 15 : 07/12/2013 at 07:43 AM
But what about the minimum wage that went up to 300 baht a day, or the Thaksin/PTP promise that everyone would be rich in 6 months. over 2 years ago? Don't they understand that if wages go up, prices go up and nobody is better off in real terms especially if production stays at the same level?

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