Tough times take toll on Thai tourism

Thai Airways is trying to lure passengers from outside Asia with free domestic flights. Hotels on Thailand's resort island of Phuket are offering a fourth night free. And mountain lodges up north are offering free golf and spa pampering.

Facing its worst crisis in years, Thailand's tourism industry is going to great lengths to drum up business that has plunged thanks to political upheaval, the global recession — and now swine-flu fears.

Foreign-traveler arrivals have fallen 16 percent so far this year, while hotel occupancy across the country has dropped to 44 percent, down from 66 percent last year. Luxury hotels in Bangkok have even lower occupancy rates.

Business is normally slower from June through October because of rainy season, but this year is particularly sluggish. And for those who do visit Thailand, there are plenty of deals.

Thai Airways is offering its inbound passengers from Europe, North America, Australia and New Zealand a free round-trip domestic ticket through October. Budget carrier AirAsia is selling tickets from Bangkok to points around the country for as little as $10 for trips after October.

As part of a nationwide campaign called "Amazing Thailand Grand Sale," Bangkok's glitziest shopping malls are slashing prices on many goods by 20 to 70 percent.

High-end hotels are offering extra incentives rather than cutting rates.

The Peninsula Hotel in Bangkok is offering a special package that includes a 3,500-baht ($100) bar and restaurant credit — and a free second night at any Peninsula hotel around the world.

The luxury hotels seem to be hit hardest, with many in Bangkok reporting occupancy of around 40 percent.

Budget travel hasn't suffered as badly, with beer stalls and hostels along Bangkok's Khao San Road and other havens for backpackers still bustling.

"We are still fully booked every day and are offering no special deals," said Bern Poednie of Julie's Guest House in the northern city of Chiang Mai.

Thailand's image as an easygoing tropical getaway has been marred by political upheaval.

The troubles started last November when anti-government protesters shut down Bangkok's two airports for a week, stranding thousands. Then in April, a rival group of demonstrators broke into a summit of Asian leaders in the beach town of Pattaya and later clashed with riot police in Bangkok's streets, leaving two dead.

The turmoil has calmed down and most of the country is quiet — save flares of violence in the Muslim insurgency in the far south of the Buddhist-dominated country. But the recent outbreak of flu in the region has added to the gloom.

Thailand has reported three swine-flu deaths and some 1,300 cases, most of whom have recovered. The tally is one of the highest reported in the region but less than Australia's 3,500 swine-flu cases and a fraction of the 21,000 in the United States.