Bangkok, Thailand: The Thai tourism industry has welcomed the introduction of the euro, the new European single currency, in anticipation that it will further…
Bangkok, Thailand: The Thai tourism industry has welcomed the introduction of the euro, the new European single currency, in anticipation that it will further boost visitor arrivals from Europe to Thailand.
According to Tourism Authority of
Global financial instability and currency fluctuations are one of the biggest problems facing the industry, especially for small- and medium-sized companies, the Governor said. The euro should make it easier for buyers and sellers to do business and maintain prices.
The impact of the euro on commercial and economic relations, including the important travel & tourism sector, was discussed at a seminar at the Thai Foreign Ministry on December 27, 2001.
Co-organised by the Economic Affairs Department of Foreign Ministry, European Studies Centre of Chulalongkorn University and TAT, the seminar featured presentations by the Director of Chulalongkorn University`s Economic Research Centre Dr Chayodom Sappasri and Director-General of Economic Affairs Department Mr Pradap Pibulsonggram, as well as Governor Pradech.
As of January 1, 2002, the euro became legal tender in 12 European Union (EU) member countries, namely Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Spain and Portugal. Three other countries, the UK, Denmark and Sweden, have chosen not to join at the moment.
Its introduction, replacing the old currencies like the lire, franc, etc., has been described as a turning point in the world`s financial history. The eurozone countries, with a total population of more than 300 million, are major generators of visitors for Thailand in terms of both arrivals and foreign exchange revenue.
In 2000, Europe (including EU and non-EU member countries) was the second biggest source region of visitors with a total of 2,168,996 arrivals in 2000, an increase of 8.97% over 1999. During January-October 2001, European visitors totalled 1,682,612, up 7.16% over the same period of 2000.
In 2000, European visitors spent an average of 3,174.09 baht per person per day (or US$79.13), contributing about 88.95 billion baht (or US$2.22 billion) foreign exchange revenue to the Thai economy. That comprised 31.18% of total foreign exchange earnings, and the second highest after earnings from Asian visitor arrivals.
The seminar at the Thai Foreign Ministry was designed to help participants better understand the impact of the euro on Thai tourism-related businesses.
Governor Pradech noted that development of both trade and tourism go hand in hand, especially because strong economies lead to strong travel for leisure, business and conventions/exhibitions.
Trade within Europe accounts for an average of 20% of global trade. We expect the euro to become an important world currency, similar to the dollar. This will help Europe`s trade-partner countries and nearly all industries including travel and tourism, the Governor said.
According to TAT analysis, most Thai tour operators still quote their tour price in US dollars or in local European currencies or directly in Thai baht. This will change in future, as the operators will no longer have to quote in several different European currencies.
Many websites also are expected to start quoting their prices in euros.
Within Europe, denominating prices in euros is expected to lower the cost of goods and services by eliminating the costs of exchange conversions and currency fluctuations which are estimated to account for between 0.5% to 1% of the EU`s GDP.
This will make it easier for companies to do business, increase consumer purchasing power and boost intra-regional trade. The economies of the EU are projected to enjoy a 2% growth rate in 2001 and a higher growth rate after usage of the euro becomes commonplace.
The euro was initially inaugurated on January 2, 1999 and underwent a three- year transition period to give time to banks and other businesses to make the shift. The transition period ended on January 1, 2002, when the new euro banknotes and coins were introduced throughout the eurozone.
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