Thailand's economy is highly dependent on the tourism and related industries and attracts high levels of foreign exchange.

Over many years of branding Thailand as an exotic, natural, friendly and exciting destination, not to mention "amazing" of course, the tourism infrastructure, ranging from some of the leading five star hotels in the world and a world-class airline to a myriad of restaurants and one-person tour operators, is massive.

Thailand boasts many areas where local business is heavily sustained by the international tourist trade - consumers with high affordability willing to pay far more than locals for the same services and to pay a high premium for specifically tailored services such as Western style hotels, Western restaurants, foreign language tour guides and Japanese-style karaoke lounges. A host of secondary businesses such as primary food producers for the Thai market, health care-providers, and transportation industries also gain. Clearly international tourism accounts for a much higher proportion of contribution to the economy in Thailand than any other Asian country, though expenditure per tourist lags Hong Kong and Singapore where prices are much higher.

While the tourism industry worldwide has suffered significantly ever since the World Trade Center bombing in the US, effects on the Asian tourism industry were moderated by an increasingly healthy rise in intra-regional travel as Asian tourists opted for shorter-haul (and perceived-safer) destinations and as travel became more affordable for Chinese mainlanders in particular due to high levels of economic growth.

It is no surprise therefore that the SARS crisis (and secondarily international tourists concerns on effects of the Iraq war and terrorism) would cut a swathe through Thai business and economy, particularly as it affected Thailand's major incoming tourist market - that of East Asia including Japan, China, Taiwan and South Korea.

As the graph above illustrates, Thailand's major gateway - Don Muang International Airport in Bangkok experienced dramatic drops in tourist arrivals from Japan and China for the period 1st to 21st April 2003 compared to the same period last year. This period incorporates the Thai Songkran festivities - a high season for Thailand's travel industry. This graph reports the rise or fall in tourists for these periods for Thailand's major incoming country-of-origin tourist markets of Japan, China, USA, Germany, and Australia. Interestingly, visitors originating from the European countries of UK and Germany, though somewhat smaller markets, remained stable, while USA-arrivals suffered a significant drop, possibly also affected by terrorism fears which has affected USA outbound tourism in general for a longer period. In short, Chinese, Hong Kong and Singaporean visitors lapsed due to travel restrictions placed on them, and Japanese and other travelers, (countries which were not "SARS-effected") were "scared off" by reports of increasing SARS infection levels in South East Asia. Interestingly, SARS infections by population ratios in Thailand and South East Asia are similar or even less than in European or North American countries, but fear of the unknown was the major factor.

This uneven affect on arrivals by region is further illustrated by the graph below which presents data on the drop in arrivals by each region. [E-Asia = East Asia including Japan, China, Taiwan and South Korea; ASEAN = Association of South East Asian Nations members incorporating all 10 member states including Singapore, Malaysia, Philippines and Indonesia; Euro = European countries; Amer = North and South America; South Asia = India, Pakistan, Sri Lanka and others; Oceania = Australia, New Zealand and Pacific Islands; M-East = Middle East; and Africa = African continent countries.]

Overall tourist arrivals dropped by 41% between April 1st to April 21st compared to the same period in 2002, by far the most affected being East Asia (Thailand's major incoming tourist market as can be deduced from the first graph), and ASEAN (which includes the SARS affected and high value outgoing-tourist market of Singapore). Middle East arrivals were predictably down most probably due to the instability in the originating region. However visitors from Europe and Australia seemed less discouraged from visiting Thailand.

Co-incidentally, at the same time that South East Asian and East Asian leaders are conducting an emergency SARS summit in Bangkok, the WHO announced that Vietnam and Thailand should be seen as "SARS free" due to the lack of any (in the case of Thailand) or recent (in the case of Vietnam) local transmission. More controversially, WHO also stated that SARS was "contained" in Singapore, a statement that was not on the Singaporean leaders agenda for fear of causing any relaxation among Singaporeans. with the lifting of travel advisories on Toronto, this left only China with a continuing and highly threatening condition.

Despite this, the emergency summit re-affirmed the recommendations of the Asian Health Minister's meeting in Kuala Lumpur Malaysia the week before, to institute SARS health checks on all international travelers leaving South East Asian countries. Justified as a way to "reduce" fear of travel due to SARS concerns, an unwanted side-effect will be to continue to discourage travel for those unwilling to risk travel for the chance of being quarantined and business/holiday schedules being disrupted at a heavy cost on the presentation of fairly vague symptoms. It also "brands" the whole of South East Asia as being a SARS risk while only Singapore remains so.

Nobody really knows when the travel and tourism industry in Thailand and South East Asia will rebound. The key is "perceptions", and how these are managed are critical to the fast return of Thailand and South East Asian tourism to previous high levels. Best guesses are that it will be a gradual and steady recovery.