Thai Minister of Commerce meets
German Foreign Chambers of Commerce
Minister of Commerce Krirkkrai Jirapaet (center,
first row standing) gave a presentation on “Foreign Investment in Thailand”
at a special luncheon held recently for the German Foreign Chambers of
Commerce during their Asia-Pacific Co-ordination Meeting 2007 at the Four
Seasons Hotel, Bangkok. The luncheon was organized by German-Thai Chamber of
Commerce Executive Director Dr. Paul Strunk (third right, front row
standing). The German Ambassador to Thailand, Dr. Christoph Bruemmer (third
left, back row), and GTCC President Karl-Heinz Heckhausen (third left, first
row standing) were the guests of honour.
2007 - chic optimism
Andrew J Wood
Last Year’s 60th Anniversary celebrations were a series of outstanding
events that generated excellent exposure for Thailand and its tourism
industry. Despite the New Year bombings 2007 is expected to show continuing
signs of growth but at a slower pace. Industry experts agree that 2007
should be a good year and the Tourism Authority of Thailand’s (TAT)
predictions of a growth from 13.8m international visitors to 14.8 million in
2007 are achievable but ‘optimistic’. According to Mrs. Phornsiri Manoharn,
the recently appointed Governor of the Tourism Authority, tourism is
expected to generate Bt 547 billion of revenue in 2007.
Commenting on the outlook for 2007 Mr. John Watson, CEO of Diethelm Travel
Asia (DTA) a leading inbound operator in Thailand was asked for his view on
the outlook for 2007.
“Whilst 2006 was a year of strong recovery for Thailand, I am not so sure
for 2007 at this time. I think it inevitable that the current political
uncertainty will affect the corporate in-bound market negatively. The
decision makers in the corporate market are closer to the issues than the
individual leisure traveller from abroad. We have seen a number of corporate
(MICE) customers asking us questions that demonstrate they are uncertain
about the wisdom of coming to Thailand until the political situation is
Mr. Luzi Matzig, MD of Asian Trails was a little more optimistic, saying,
“For Asian Trials 2006 was an excellent year with sales growing by 53% over
2005. Naturally we do not expect such steep growth to continue unabated into
2007, but general outlook on bookings is very positive and I am convinced
that we can expect another increase of around 25% for the coming year.”
He added, “Thailand is very popular at the moment, not only with Europeans,
but also with visitors from the Middle East who are no longer keen to travel
to the USA / UK in great numbers and feel happier in our part of the world.”
The Thai Hotel Association (THA) president however paints a gloomy picture
for his members for 2007, claiming the country has an oversupply of
inexpensive five-star rooms. President Chanin Donavanik stated that 2007
occupancy rates will not noticeably grow, as supply will outweigh demand. He
added that Thailand’s hotel business would only grow by 6% to 7% this year.
He said one issue facing Thailand’s hotel industry is that of oversupply,
especially in Chiangmai, Pattaya, Samui, and Phuket.
Another issue is that of low hotel rates, especially for five-star
accommodation. Thai hotel rooms are half as much as those in Singapore and
one-third less than rooms in Hong Kong, Shanghai and India.
The president agreed with governmental policies to focus on quality tourism
and the rehabilitation of untouched and damaged attractions. He cautioned
that to compete, Thailand needed to develop new tourism products and take
note of the competition such as Vietnam and China.
The industry is becoming weary of changing slogans and it appears that even
regional offices have invented their own. Recognizing that 2007 will bring a
stream of new, luxury boutique hotels, as well as the emergence of Trang,
Koh Yao, Koh Chang and Koh Racha, a new catch phrase ‘CHIC by Thailand’ has
been launched in the UK to emphasis trendy and luxurious tourism products.
This on top of TAT’s now defunct global catch phrase “Unforgettable
Thailand”, which will be replaced by a re-born “Amazing Thailand” campaign.
Thailand maybe CHIC in the eyes of some; however it is still a difficult
country in the eyes of a number of operators. Long term residents and
retirees are still not allowed to buy land on which to build a home under
their own name. Tourism as a result will never be able to attract VFR
(Visiting Friends and Relatives) traffic as much as other countries, due to
its existing property laws. And also whilst countries like Cambodia and
Macau benefit from gambling tourists, (tiny Macau for instance attracts over
20 million tourists a year), gamblers are not welcome in Thailand.
And finally explaining the current UK market trends for Thailand, Mr. David
Kevan at Tropical Locations (UK) said: “We ended 2006 with a substantial
passenger increase and 2007 looks just as encouraging. Thailand is
constantly evolving so the product range rarely becomes stale, plus you have
good air lift from London with four airlines flying at least once daily to
Bangkok. These two points in particular give Thailand a tremendous advantage
over its competitors and it’s not surprising for most operators that it is
the number one destination in the region by quite a long way - it looks like
being a great 2007.”
Legislators face tough choice
over Thai-Japan FTA
Despite the government’s intense effort to press ahead
with the draft free trade agreement (FTA) with Japan, appointed members of
Thailand’s National Legislative Assembly remain divided as to its pros and
During the house debate last Thursday, Commerce Minister Krirkkrai Jirapaet
said the bill was needed urgently as Thailand was not the only trading
partner with whom Japan was keen to conclude a deal.
He added five other ASEAN founding members were at different stages in their
negotiation and ratification processes of a similar pact with Japan. If
Thailand clinches the deal now, it will have a precious head start, he said,
adding that Vietnam - a key trade rival - was also reportedly trying to
start free trade negotiations with Japan.
Japan is Thailand’s second most important export market and the most
important supplier of goods and services. It is the largest foreign investor
in Thailand, accounting for 19 per cent of total foreign direct investment.
Of 12 million visitors annually, about 20 per cent are Japanese.
Krirkkrai said it was hard to admit, but Thailand needed Japan more than
Japan needed Thailand.
“In entering into the agreement, the government has taken into account
national interests, the rule of law and our international commitments under
the World Trade Organisation but we must not overlook the need for
compromise. There must be give and take. No party can win all the time,”
He added that some local industries might be affected by increased
competition as restrictions on trade and investment with Japan have loosened
up. Some sectors might need up to a 5-7 year grace period. But the commerce
minister stressed that Thailand would also benefit from the trade and
economic partnership with Japan.
But critics of the proposed free trade agreement said that Thailand was not
negotiating from the position of strength. As a weaker trading nation, it
was bound to be taken advantage of by the economic superpower such as Japan
in bilateral trade talks.
Narong Chokewattana, NLA member and advisor to the Pan industrial
conglomerate, also criticised the secrecy surrounding the draft agreement.
He said the document should be disclosed to the public for consultation and
“The draft agreement should have been disclosed in order to attract wider
public participation. Its secrecy is its weakness. I don’t understand why we
can’t tell Thai people what has been agreed in the trade talks with Japan.
We are a democratic country,” Narong said.
But he commended the government for seeking the assembly’s opinions on the
bill. It is the first free trade agreement that has come before the
legislative branch for debate. Previous agreements with Australia, New
Zealand and China were approved by the executive without scrutiny from the
PTTEP starts natural gas,
condensate production in Oman
Thailand’s PTT Exploration and Production (PTTEP) began
producing natural gas and condensate from the Shams field in Oman this
month, becoming the first Thai company to produce petroleum in the oil-rich
Middle East country.
Shams field is part of Oman’s tract 44 project located in the Suneinah
desert, about 300 kilometres west of the Omani capital of Muscat. PTTEP is
currently the operator of the Oman 44 project.
Witnessing the inauguration of Shams Central Processing Plant or SCPP at
Shams field on Saturday, Feb. 10 were Mohammed Hamed Saif Al-Rumhy, Oman’s
Oil and Gas minister, and Thai Energy Minister Piyasvasti Amranand.
Initially, the Shams field is expected to produce 50 million cubic feet per
day of natural gas and 4,000 barrels of condensate. Natural gas from the
Shams field will be sold to Oman’s Ministry of Oil and Gas while the
condensate will be exported to Thailand’s PTT.
PTTEP managing director Marut Marutkathut said the project was an important
milestone for the company and part of its success was attributed to the good
cooperation between Omani and Thai workers in the area.
“Shams condensate delivered to Thailand will reduce Thailand’s burden of
heavy petroleum imports. Our contribution may be small now but it’s a
significant step that we are taking on the road towards energy security in
the long-term”, Mr. Marut said. (TNA)