This Songkran is going to be a disaster"

SUNGAI KOLOK: -- The first bombing of a tourist venue in Thailand's troubled Muslim south sparked a weekend exodus of Malaysian visitors and fuelled fears of wider hit to the country's key tourism trade.

Noodle hawkers, hotel operators and bar owners in the border town of Sungai Kolok were left counting their losses after a bomb ripped through a karaoke bar on Saturday night, wounding nearly 30 people, including eight Malaysians.

"Malaysian tourists fled after the bomb," a noodle hawker said late on Sunday, one of 20 vendors on the deserted narrow lane of beer bars and karaoke clubs where the bomb hidden in a motorcycle exploded.

Bar owners gazed at empty tables usually packed with Malaysian men flirting with scantily clad Thai bar girls.

The town, about 1,300 km from Bangkok, is known for its hotels, bars and brothels just across the border from Malaysia's northern Islamist heartland.

"My sales had just improved after weeks of few customers and now it's going to be terrible for some time," the noodle hawker said, nearly four months after a new wave of violence erupted in the region where many of Buddhist Thailand's Muslims live.

No one has claimed responsibility for the attack in Narathiwat province, one of three provinces under martial law since gunmen raided a southern army camp in January, killed four soldiers and made off with many weapons.

More than 60 people, mostly police and government employees, have been killed in what some believe may be a resurgence of a low-key separatist war fought in the 1970s and 1980s.

Saturday's attack was the first on a tourist venue in the south where Malaysian visitors account for 90 percent of tourism.

"Certainly, the number of tourists will reduce and worries about safety and security will cause foreign tourists to cancel their trips to other spots along the border," said Anusart Suwanmongkol, chief of the Pattani Tourism Promotion Association.

BIG REVENUE EARNER

A bigger worry is the potential impact on Thailand's wider tourism trade and the country's reputation as a safe destination for international holidaymakers.

Senior government officials acknowledged on Sunday the threat posed by the shift to tourist targets in the south.

"These people deliberately want to damage the tourism environment of Thailand," Deputy Prime Minister Wan Muhamad Noor Matha told reporters after visiting bomb victims in hospital.

Thailand's beaches, temples and resorts lure around 10 million tourists a year, generating $8 billion for the economy, or about six percent of Gross Domestic Product (GDP).

The industry avoided a major hit from a bird flu epidemic, which killed eight Thais this year. But the SARS crisis in Asia last year cut tourist arrivals in Thailand by 10 percent.

Economists said they doubted the violence would have a serious impact on Phuket and other upscale resort islands which draw the bulk of Thailand's wealthier Western tourists. They expect the fallout from the bombing to hit hardest in southern border towns such as Songai Kolok.

That's bad news for Mahmad, a motorcycle taxi driver who was counting on thousands of Malaysians crossing the border next month to celebrate Thailand's water festival.

"This Songkran is going to be a disaster," he said. ( *Reuters)