Thai price rises cause concern for C&I sector

By David Johnson BANGKOK: Thai Airways International (THAI) has hiked domestic airfares by 20 per cent starting January 1, 2002, a move which threatens to undermine conference and meeting business to, and within the country. The Thai national carrier had requested that the increase be put into effect earlier, but was over-ruled by transport minister Wan Muhamad Nor Matha so that the change would not be so abrupt for planners. With THAI privatising and the country opening up its skies, the carrier claims it is no longer able to continue to run formerly state subsidised routes at a loss, as it had done in the past. However, the fear now is that plans to promote regional and domestic conference and meeting business in the wake of September 11, will be scuppered by the increase. "It will effect domestic business, especially in Had Yai, Phuket and Chiang Mai, as the gap is now narrower between the price of a domestic trip and an overseas one," said Tourism Authority of Thailand director of the International Convention Division, Mr Udom Metatamrongsiri. A committee has been set up accordingly to work with THAI to create special deals for domestic trade, he added. "But for regional inbound business, a 20 per cent increase is still very reasonable," Mr Udom added. While Pattaya is unaffected due to its 2-hour road transfer proximity to Bangkok, Phuket is more exposed. "It will have an impact," said Diethelm Events events manager, Mr Alex Riva, who claims that 50 per cent of the firm's C&I business goes to Phuket. "But, this is currently offset by the 50 per cent discounts being offered by five-star hotels in Phuket. US$250 hotels are now as low as US$125." Direct flights to Phuket from key regional source markets, Hong Kong and Singapore will further limit the impact. "Any loss for the country can be compensated for by other destinations such as Hua Hin or Pattaya which are accessible by road," added Riva.