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19 Jun, 2010
Businesses still picking up the pieces
BANGKOK POST Issued date 19 June 2010
POST REPORTERS
One month on, businesses hit by the red shirt riots on May 19 are still picking up the pieces.
Some report a slow recovery, while others complain of tardy state assistance.
The tourism industry, for instance, is still suffering from poor trade.
Thai Hotels Association (THA) president Prakit Chinamourphong said the industry has yet to recover.
The average occupancy rate is just 10% nationwide.
"I just came back from Koh Chang.The occupancy rate there is less than 10%. I haven't seen it this bad in more than 40 years," he said.
The THA has proposed remedial measures but the government has yet to respond.
The delays could force mass layoffs in the hotel business, he said.
Big hotels with total assets of more than 200 million baht want longer to pay back their debts.
Association of Thai Travel Agents (Atta)president Surapol Sritrakul said international tourist arrivals have fallen 70%from the same period last year.
"We hope the tourism industry will start to recover in December. But we are worried the political situation may flare up again," he said.
The government has promised five billion baht in assistance for small and medium sized enterprises (SMEs). However, Atta believes the government should relax regulations further to make it easier for businesses to borrow.
"At least 50 companies have sought loans from the government. The prime minister has asked operators to present more details about their troubles so the government can consider the information together with their loan requests,"said Mr Surapol.
The property sector says consumer confidence is still low following the riots.
Property consultant Colliers International Thailand said buildings damaged during the protests included three shopping malls, one cinema, two office buildings, two hotels, various branches of convenience stores,14 bank branches and two government office buildings.
The most severe damage was incurred by CentralWorld where 95,000 sq m of the Zen shopping complex and some of CentralWorld itself was destroyed.
Reconstruction will take at least a year.
The other shopping mall to be hit was Center One, where 1,200 sq m was torched. Two years will likely be needed to rebuild.
Reconstruction was also needed at the Siam Theatre, the Metropolitan Electricity Authority in Klong Toey and some branches of Bangkok Bank.
Overall the property market would enter a static period while the country faced up to its deep divisions.
Foreign investment would begin to flow into the market only when these had been addressed, and a more liberal business climate was established.
Local insurance firms have agreed to settle fire claims for small businesses affected by the Bangkok riots even if they didn't hold specific coverage for terrorism, said Chantra Purnariksha,secretary-general of the Office of the Insurance Commission.
While insurers were not obliged to pay out for damage caused by terrorism,the Insurance Commission has asked the industry to help small businesses holding policies worth less than 5 million baht.
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