Floods Threaten Tourism in Southeast Asia

The 2011 Asian summer monsoon has been the worst in decades, causing significant floods in Thailand, Laos, Cambodia, Vietnam and the Philippines. Experts estimate that, since the end of July, the region has received 50% more rain than normal. The floods have thus far resulted in over 700 deaths and impacted more than eight million people. Although the monsoon season is typically a slower tourism season, Euromonitor International examines its likely impact on tourism in Thailand, Cambodia, the Philippines and Vietnam.

Terrible floods in Thailand

27 provinces in Thailand are dealing with floods, including six major industrial parks. The city of Ayudhya, which is a World Heritage Cultural site and received 350,000 international visitors in 2010, has flooded for the second time in six months.

Furthermore, the Thai government has been forced to allow water to pass through Bangkok’s canal system to alleviate the water in the northern part of the city. On October 25th, Prime Minister Yingluck Shinawatra announced that it was likely that central Bangkok would flood although the depth of the water would vary. The government also declared public holidays from October 27th through October 31st for Bangkok and the flooded provinces. The government also said that flood waters could remain in the capital for two to four weeks before moving into the sea.

On Friday, October 28th, the Chao Phraya river, which runs through Bangkok, swelled to a record high, with tides expected to peak on Saturday, October 29th. The peak is expected to be at 2.6 metres with the flood walls only reaching 2.5 metres. On Friday, the Grand Palace and Chatuchak Weekend Market were closed due to flooding, but as of Friday, the main business districts of Silom and lower Sukhumvit remained dry.

Travel advisories implemented

After the government’s announcement on the 25th, countries began implementing travel advisories. Hong Kong, the UK, the United Arab Emirates and Singapore warned against non-essential travel to Bangkok and the flooded provinces. Furthermore, the Don Muang Airport, primarily a domestic airport, closed on October 25th until at least November 1st. The airport received 2.9 million passengers in 2010. As of October 28th, flood barriers (3.5 metres high) have protected the country’s main airport, Suvarnabhumi, and flights are operating normally. Suvarnabhumi received 42 million passengers in 2010 and is a main entry point for international tourists.

Domestic tourism impacted as well

The Tourism Authority of Thailand (TAT) reports that domestic tourism has dropped by 30% since the floods started, with the hardest hit areas, such as Ayudhya, suffering declines of 70-80% in domestic tourism. The Thai Tourism Council predicts that the losses could be up to Bt10 billion in domestic tourism spending if Bangkok and the central provinces are flooded for the full month. However, as Bangkok residents leave the city, hotels and other travel accommodation could see a boost in guests.

Short, but strong impact on international tourism

The Tourism Council of Thailand had expected 5 million international arrivals during October through December 2011, but now believes that it will be around 4.0 and 4.25 million—a decline of 15% to 20% for the fourth quarter of 2011. Incoming tourism receipts could be Bt30 billion and Bt40 billion lower in the fourth quarter. However, other major tourism destinations, such as Phuket, Pattaya and Samui, have been relatively unscathed by the floods and the travel warnings do not advise against travel to those destinations. The declines predicted by the Tourism Council of Thailand are likely a worst case scenario with flood waters remaining for the full month.

Thailand has proven its ability to bounce back quickly after a crisis. Despite the months-long protests in Bangkok in the first part of 2010, international arrivals to the country still grew by 11% during the full year to reach 16 million, whilst arrivals to Bangkok grew by 7% to over 10 million. 2011, so far, has been a good year for the industry. International arrivals were up 25% through the first seven months of 2011, with industry sources now predicting a finish of 18 million. This is lower than the government’s target of 19.3 million, but still 13% higher than 2010 figures. If the flood damage is cleaned up in December, the tourism industry should be back on track for a full recovery during 2012.

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Cambodian tourism industry also suffering as a result of floods

Floods have also been plaguing Cambodia, especially in the Kampong Thom, Kratie, Siem Reap and Takeo provinces during this year’s monsoon season. Siem Reap (the gateway city to the Angkor Wat temple complex) and the Angkor Wat temple complex have both flooded at least three times. The city receives about half of international tourists to the country. A flash flood in late September 2011 required a helicopter and the boat evacuation of 183 tourists stranded at Banteay Srei temple, which is 20km from the Angkor Wat temple complex. The government has also cancelled the annual water festival (scheduled for 9-11 November) in Phnom Penh, which features traditional rowing races, and has pledged to use the money spent on hosting the festival to help flood victims. A million visitors typically attend the event.

The flooding is likely to impact tourism figures during the fourth quarter of the year. However, 2011 has been a strong year for tourism so far, with international visits to the country up by 14% January-September 2011, driven by strong gains in visitor numbers from Vietnam, South Korea and China. The Siem Reap provincial tourism department reported that foreign visitors to Angkor Wat reached 1.1 million from January through August 2011, representing an increase of 24% compared to the same period in 2010. The expected dip for the remainder of the year will not be significant enough to cause a decline in visitor numbers during 2011 as a whole, and, again, if the damage is fixed by December, the floods are unlikely to have an impact on high season tourism in 2012.

The Philippines’ tourist centres escape largely unscathed

The flooding in the Philippines has largely impacted agricultural land in areas not typically visited by tourists. Furthermore, news reports suggest that the floods hit during the months just ahead of the typical peak tourist period. The country experienced 12% growth in arrivals to three million in 2010 despite a travel ban by the Hong Kong government after a hostage situation in August 2010 left eight Hong Kong residents dead. As a result of all this, tourism in the Philippines is not likely to be significantly impacted by the floods.

Vietnam embraces flood tourism

Vietnam has also experienced floods in recent months in its central provinces and along the Mekong river delta, which is fairly typical. The main tourist attractions in the central provinces are Da Nang, Hoi An and Hue. These areas have also flooded, but the water has tended to be calm and will recede. In fact, the tourism industry has capitalised on the annual floods. In Hoi An, tourists can travel around the city by boat and see the old town submerged in water. This kind of “flood tourism” has been around for a few years.

Meanwhile, the Mekong delta is not a major tourist attraction. Tourists, both international and domestic, usually take day trips by land or cruises to the Mekong delta from Ho Chi Minh City. The flood in the Mekong delta is therefore only likely to have a minor impact on tourist arrivals, as most people see Ho Chi Minh City as a main tourist destination rather than the Mekong delta. Overall, the floods are not expected to have a significant impact on tourism to Vietnam.

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Short term impact only if cleaned up soon

Monsoon season is generally a low season for tourism in Southeast Asia, but the rains and floods have had a negative impact on tourism from the end of July through October. However, the strong first half of the year for all countries likely means that the tourism industry will still see growth for the full year of 2011. The impact on Thailand’s tourism industry is likely to be the greatest as areas of Bangkok deal with flood waters and the northern provinces were hard hit. If the water drains within a month, though, it is likely that the governments will be able to repair any damaged tourist areas in time for 2012.