As wary foreigners stay away after violent protests, Thailand pushes domestic tourism

Tax credits and mud masks to boost Thai tourism

BANGKOK — Thais will do just about anything these days to revive a once-golden tourism industry battered by bloody political protests.

And figuring that foreign travelers are unlikely to return in droves anytime soon, they are targeting a growing class of domestic tourists with shark-diving promotions, tax credits and even discounted facial mud packs — all to relieve the stress of the recent upheaval by taking a holiday at home.

It seems to be working: Some 210,000 vacation-seekers, most of them Thais, flocked to last week’s Thailand Tourism Festival, snapping up deep discounts on flights, hotels and vacation packages offered by nearly 600 companies.

While an annual event, the 2010 version surprisingly drew a far bigger crowd than last year’s — and yielded more revenue. It offered special incentives for locals by a government eager to revive its tourism industry after anti-government protests killed 90 people, left more than 1,400 injured, and damaged or destroyed dozens of buildings.

“It’s a good time to build (domestic) awareness about tourism, particularly after recent events. People are in a certain mood. People need to relax,” says Sugree Sithivanich, an official of the Tourism Authority of Thailand.

To aid the effort, the government introduced an income tax credit of up to 15,000 baht ($470) for Thais purchasing vacation packages and hotel stays of the same amount.

As part of the government’s blitz, tourism companies participating in expos at home or abroad and those hosting seminars in Thailand will be receiving tax credits worth double the associated costs.

They are also eligible for tax credits on office equipment and vehicle purchases, and cheap loans from small enterprise banks. The Cabinet has approved a funding injection of 360 million baht ($11 million) for the authority to promote tourism, and is expected to vote this week on additional measures.

At the tourism fest, organizers erected an idealized mini-Thailand with an artificial forest and lake, Buddhist temple and a village street complete with food vendors. Hill tribes, dressed in traditional clothes, came from Thailand’s north to participate.

One operator, Underwater World in the seaside resort of Pattaya, touted discounted dives with sharks and rays in its Amazon tank. The Phuklon spa booth enticed passers-by with cheap mud packs administered on the spot.

Tour operators received a first-ever 20,000 baht ($625) subsidy for booth rentals, bringing the price down to 5,000 baht ($160) per booth.

“The goal of this event is to promote domestic tourism in Thailand,” said Sugree. “I think it will compensate for the decrease in international tourists.”

The Federation of Thai Tourism Associations forecasts foreign visitors in 2010 will drop to 12 million from last year’s 15 million. Some predictions are even starker.

However, the tourism authority is hoping for a 3.4 percent increase in domestic tourism, to 90 million trips this year.

Tourism brought in about US$27 billion in revenue last year, or about 6.5 percent of Thailand’s GDP.

“The very cheap packages allow me to go all over Thailand, especially the seaside,” said Sutthida, who gave only her last name. The 30-year-old teacher came twice to pick up some bargains. But boosting local tourism isn’t easy for all sectors.

Watcharapong Klinpraneet, founder of the Phuklon spa, says many Thais have “never had a face mask. We have to show them the benefits of mud. Normally, foreigners already know.”

Residents of Thailand’s capital suffered the most stress, and sometimes danger, as so-called Red Shirt protesters, many of them poor rural people, occupied areas of downtown Bangkok and sparked several deadly confrontations with security forces.

Despite the crisis, some are even optimistic that foreigners will return sooner than later as they have after earlier political troubles, disease epidemics and the 2004 tsunami.

Ann Burin, the owner of Smile Bags, says sales of her purses made from traditional southern Thailand batik fabric and northern cotton have dropped off slightly. But she isn’t worried.

“I was just in Singapore at an expo and all the foreigners asked, ‘When is it safe to go back to Bangkok? We want to go back to Bangkok.’”