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SEMINAR ON EURO AND THAI
TOURISM INDUSTRY
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 Thailand Governor Pradech
Phayakvichien, the euro should help bring a greater degree of
stability to financial relationships between tour wholesalers, travel
agents and buyers in Europe and Thai sellers like hotels, tour
operators and other tourism products.
“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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