VZCZCXRO9831
PP RUEHCHI
DE RUEHBK #7126/01 3320640
ZNR UUUUU ZZH
P 280640Z NOV 06
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 3180
INFO RUEHCHI/AMCONSUL CHIANG MAI 2744
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCPDC/NOAA WASHDC

UNCLAS SECTION 01 OF 02 BANGKOK 007126 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: ECON TH
SUBJECT: THAILAND:  TWO YEARS AFTER TSUNAMI DEVASTATION, 
PHUKET TOURISM STAGES NEAR-TOTAL ERCOVERY 
 
 
 ¶1.  Summary:  Less than two years after the devastating 
December 26, 2004 tsunami struck southern Thailand, the 
annual US$2.5 billion tourist industry of Phuket has staged 
an almost complete recovery.  Arrivals from some Asian 
countries remain soft, but the shortfall has been compensated 
by a big increase from other countries, especially Korea. 
Local tourism officials credit this faster than expected 
recovery to effective Thai Government and international 
assistance; the apparent belief among tourists that the 
tsunami was a one-off natural event unlikely to be repeated 
 
SIPDIS 
anytime soon; and the enormous attractiveness of the Phuket 
area among international visitors.  While a number of 
challenges remain (such as a housing shortage for workers), 
and rival destinations beckon, tourism officials are 
confident that Phuket's mixture of sun, surf, tropical 
waters, and Thai hospitality will ensure that Phuket will 
remain a popular destination.  End Summary. 
 
¶2.  Less than two years after the devastating December 26, 
2004 tsunami struck southern Thailand, the annual US$2.5 
billion tourist industry of Phuket has staged an almost total 
(better than 90 percent) recovery.  This was the consensus 
among a wide range of tourism-related Thai government and 
private sector leaders surveyed by U.S. Embassy officials 
during a visit to the area in mid-November. 
 
Tourist Arrivals Approach Pre-Tsunami Levels 
 
¶3.  In most sub-regions of the Phuket tourism area, arrivals 
look set to match or even exceed the levels of (pre-tsunami) 
¶2004.  In the popular Krabi sub-region, arrivals for 2006 
through June are down about 27 percent compared to the same 
period in 2004, but arrivals in recent months have been 
accelerating, and with the forecast Asian New Year business 
added, are projected to about equal those of 2004.  In Phuket 
proper, arrivals are down only five percent compared to the 
pre-tsunami peak, and for all of 2006 are projected to be 
about the same as calendar year 2004.  The only laggard is 
the Phang Nga area; this sub-region contains the hard-hit 
Khao Lak beaches, the scene of perhaps the highest foreign 
tourist casualties of the tsunami.  But even here, experts 
are predicting a near full recovery in 2007.  The Khao Lak 
area is being reconstructed rapidly, and currently there are 
3000 guest rooms available (about half of what existed prior 
to the tsunami), with a current occupancy rate of 50 percent. 
 By next year this will jump to 7000 rooms, and advance 
bookings suggest that the occupancy rate will be 70-80 
percent in 2007. 
 
Arrivals Mix Has Changed 
 
¶4.  While total arrivals are approaching pre-tsunami levels, 
the mix of nationalities has changed.  Prior to the tsunami, 
in Phuket proper visitors from Australia topped the list of 
arrivals, followed by Korea, the UK, Germany, Sweden, and the 
U.S.  In 2006, Korea has assumed the top position, followed 
by Sweden, the UK, Germany, Australia, and Malaysia. 
Officials still see softness in the arrivals numbers from 
Scandinavia, Germany, Taiwan, and China.  For Scandinavia and 
Germany, this is explained by the high tsunami death toll 
among tourists from these countries.  For China and Taiwan, 
Thai tourism experts cite a widespread belief -- and fear of 
-- malevolent ghosts in these cultures, and a reluctance to 
visit a place where so many died so violently so recently. 
(This same phenomenon also can be seen in somewhat lower Thai 
citizen arrivals.)  On the other hand, higher arrivals from 
Korea, Australia, and Japan are partially attributed to 
reluctance among these nationalities to visit Bali owing to 
recent terrorist bombings on that island. 
 
Recovery:  Why So Fast? 
 
¶5.  More or less full recovery in less than two years is much 
faster than anyone predicted back in January 2005.  Why so 
fast?  Local tourism officials cite several factors.  First, 
the Thais readily admit (and are thankful for) the role 
played by the international help they have received.  Second, 
the Bank of Thailand stepped in to restructure loans, giving 
tourist industries time to recover.  Third, many tourists 
apparently view the tsunami as an infrequent natural disaster 
that is not likely to be repeated anytime soon; the unabated 
demand from tourists has created its own supply in the form 
of rebuilt hotels.  This attitude has no doubt been 
reinforced by Thailand's prompt installation of world class 
tsunami early warning devices (such as the U.S.-donated DART 
 
SIPDIS 
buoy, to be deployed in December 2006 in the Andaman Sea). 
Finally, there is the overriding X factor, best summed up by 
one official:  "People really like to visit Phuket." 
 
BANGKOK 00007126  002 OF 002 
 
 
 
¶6.  Local officials cite a number of lingering problems.  The 
construction boom and the tsunami death toll have created a 
labor shortage, which has driven up wages.  Housing remains 
in short supply, with some workers forced to sleep on boats. 
  Something will have to be done about the perception that 
malevolent ghosts are stalking Chinese and Thai tourists. 
And Thai tourism officials fret about the possibility of far 
southern Thailand's Islamic separatist insurgency spreading 
northward into the Phuket tourist areas.  (For now at least, 
this seems an unlikely possibility; the potent historical, 
ethnic, and religious mix fueling insurgency in Thailand's 
far south are absent from in the Phuket area.) 
 
¶7.  But these problems are seen as relatively minor and of 
limited duration.  For now, optimism prevails within the 
Phuket sector.  Local tourism officials are preparing for 
what they see as the next stage in the development of Phuket 
tourism, which they believe will emphasize sailing (more 
marinas are planned); "green" tourism; and world class sports 
activities such as international regattas, golf tournaments, 
marathons/triathlons, and beech volleyball.  While Phuket's 
leaders are aware of the threat posed by competitive 
newcomers like Vietnam, they are confident that Phuket's 
mixture of sun, surf, tropical waters, and Thai hospitality 
will ensure that Phuket will remain a popular destination. 
 
ARVIZU