Phuket businesses seek debt moratorium

PHUKET (The Nation): Cash-strapped tourism businesses in Phuket are seeking debt relief in order to deal with the current downturn in tourist arrivals at a time when hotel occupancy rates are normally at their highest.

Somchai Pathamakantin, founder of the Phuket Seashell Museum and representative of tourist business groups on Kata and Karon beaches, today proposed to Phuket Governor Preecha Ruangjan that the government announce a debt moratorium for business operators in light of the current crisis.

The moratorium is the best solution, as it would require no legal amendments to take effect and would keep business operators financially strong enough to avoid staff layoffs, he said. A similar moratorium, which covered only interest on the principle, was instituted with government help after the 2004 tsunami disaster, he added.

The business sector’s problems could be more severe this time, as the global crisis is plunging the world into recession, Mr Somchai said.

“If there were measures to maintain liquidity, other problems would be less severe. This is the best solution, as others, including the reduction of value-added tax, could take time to show results,” he noted.

Speaking on behalf of the Andaman Tourism Association, Phang Nga Tourism Association President Krit Srifa said there had been a meeting among representatives of tourism operators, state agencies and banks in Phuket, Phang Nga and Krabi on the effects of the political turmoil.

All parties had agreed to ask for financial help from the government by extending debt moratorium periods and offering them soft loans to enable both operators and workers to survive. Tourism entrepreneurs in the three provinces would also ask the government to reduce taxes to help them, he added.

After the tsunami disaster, most tourism entrepreneurs had to borrow money from financial institutions to save their businesses. Since then, tourist numbers had gradually improved – until the current political conflict erupted.

Thai Hotels Association President Prakit Chinamourpong said on Tuesday that many hotels in Phuket have also cut staff working days to four or five days per week.

“Some luxury hotels are running with a single-digit occupancy rate, sharply down from the average 70% rate recorded in the same period last year… For the overall hotel industry, the average occupancy rate this month alone has declined 19.1%,” he said.

The nationwide impact of the Bangkok airports’ shutdown was greater than the 2004 tsunami, he said.