Small Thai tour firms face new challenges this year

A sign indicating the closure of a main touristic road can be seen next to barricades of anti-government protesters near a main stage of the protest in Bangkok.

BANGKOK - With no end in sight for the political turbulence, this appears to be a difficult year for tour operators, especially small and medium-size companies and start-ups.

They will find it even tougher to survive if they do not enough have regular customers to cover their daily costs.

Wimoke Banchasakcharoen, general manager of I Dream Journey Co, an outbound travel agency, said last week that not just inbound tours, but also outbound ones were hit badly, adding that the company would no longer pin its hopes on walk-in customers during these hard times.

Fortunately, regular customers make up more than 60 per cent of its clientele and also the tour business is just a part of the whole group, which is mainly into real estate.

''Obviously, Thais, especially those living in Bangkok, are preoccupied with what's going on and their travel mood is sombre. Some of our customers have asked us to bring all documents for a trip to the protest area,'' he said with a laugh.

His tour business has been around for three years. Last year, it took care of 20 to 30 upper-income earner groups, each with 20 to 40 travellers. Japan is the most popular destination with five-day packages starting at Bt40,000.

"We have asked our team to try to look after our existing customers as best as they can, especially those who want an extra change on the itinerary,'' he said.

His 20 employees have also been asked to work hard in seeking new customers to use the company's services and also to help the company by saving costs if they can.

However, the situation is not bad enough to force pay cuts. Members of staff are still earning in compliance with their contract.

He said his firm is luckier than others, because many of its peers have had to prepare six months of liquidity to weather the political instability. If the problem lasts the entire year, many companies will be forced to shutdown or downsize. Also, there has hardly been any hiring during this period. However, he added that the industry should rebound very quickly once the problem ends.

An industry source, meanwhile, said some inbound tour firms, especially those catering to Chinese travellers, were struggling. For instance, her friend suffered huge financial losses when the government implemented the emergency decree as many Chinese travellers cancelled their trips. She ended up having to mortgage her home.

Wimoke said the travel business was very sensitive to political problems, very slim on margins and very competitive. The 2011 flood crisis had not proved as big a nightmare as the current situation because people continued going on trips.

Songkran, which is coming in a couple months, is usually a money-spinner for the industry, but this year is not expected to be that festive. For instance, he said, arrivals during this Chinese New Year dropped 50 to 60 per cent compared to last year.

Though he blamed this drop on travellers' tighter budgets too after heavy partying during the New Year holidays.

Thana Chatniramon, sales and marketing manager for Journey Far Travel Co, a small travel agency with just four members of staff, said his firm had just opened last year and has faced no problems so far.

His company still has advance bookings for Japan tour packages and he is planning to add South Korea and China trips later in the year.

Yet this year has been a challenging one for all operators, with many believing that being "honest" is the only way they can hang on to their customers. They are also looking for new avenues to find additional customers, with many starting to rely on online social media such as Facebook.