By Khettiya Jittapong and Orathai Sriring
BANGKOK, May 22 (Reuters) - The Thai army's imposition of martial law is another blow to the country's tourist industry, adding to the economic pain from six months of destabilising street protests as airlines cut back on flights and concern over insurance adds to travellers' worries.
Tourism officials put a brave face on the latest twist in the long-running civil strife, saying it was too early to gauge the impact on tourist arrivals, which already dipped nearly 6 percent in the first three months of the year.
"It might look scary and to outsiders it might sound violent, but if we look at it from another angle it should bring more security and peace which should reassure tourists," said Supawan Tanomkieatipume, vice-president of the Thai Hotels Association.
But some travel agencies said they expected a further fall in bookings after Tuesday's news, especially from corporate travellers, who can be more sensitive to political risks.
Inadequate insurance cover may also put some off: most travel policies have exemptions specifying that claims will not be paid if they are a result of martial law or civil unrest.
Many governments updated their travel advisories to citizens on Tuesday, warning of an increased military presence and some roadblocks in and around the capital Bangkok.
On Internet travel forums, potential visitors voiced concern about the situation and asked whether they should cancel trips.
As soldiers fanned out onto the streets of Bangkok - hailed by Time Magazine only last year as the world's most visited city - most shops and businesses stayed open and transport ran normally. The caretaker government led by supporters of self-exiled former premier Thaksin Shinawatra said it was still running the country and the army said it was not staging a coup.
Winthai Suvaree, an army spokesman, said that the public "need not be worried. You can go about your lives as normal."
Tourism makes up about 10 percent of Thailand's economy and the ebbing number of visitors contributed to a fall in gross domestic product in the first three months of the year, adding to fears the country is sliding into recession.
Tourism outside Bangkok has held up but overall arrivals to Thailand still fell 5.85 percent in January-March from a year before. Asian tourists fell the most, with visitors from China, Japan and South Korea and Taiwan down a fifth from a year ago.
Kellie Carty, a spokeswoman for Australian travel agency Flight Centre Ltd, said visitors were unlikely to cancel trips altogether but would avoid stays in Bangkok.
The Malaysian Association of Tour & Travel Agents President Hamzah Rahmat said any impact was likely to be short-term and mostly affect the capital.
"The riot is only in Bangkok - Phuket is booming," he said.
But Dynasty Travel, one of Singapore's biggest travel agencies, said it had seen a growing trend of cancellations by corporate travellers in recent months and expected more.
"We can foresee that it will definitely affect the MICE (meetings, incentives, conventions and exhibitions) sector as Bangkok is a favourite destination for corporate travellers," said Alicia Seah, director of communications at Dynasty, which has seen a 50 percent slump in Thai bookings since September.
The Philippines raised its alert level for Filipinos in Thailand on Tuesday, warning them to prepare for evacuation if necessary and advising against non-essential travel to the country famous for its pristine beaches and gold-tiled temples.
"There is a significant decline in travel to Thailand at this time," said Ramon Jimenez, the Philippines' secretary of tourism, adding that business travel would be hardest hit.
Philippine Airlines said it has cut its daily flights from Manila to Thailand to two from three from May 15. Indonesia's Garuda airline told Reuters it will also cut flights from two to three from June 1.
The region's biggest budget carrier, AirAsia, said on Tuesday that its second-quarter bookings to Thailand may decline due to the political unrest.
Singapore Airlines and budget carriers Jetstar and Scoot said there were no changes to their flight schedules.
A spokeswoman for JTB Corp, Japan's largest travel agency, said it was seeing an "ordinary" number of cancellations while the country's largest airline, ANA Holdings, said there had been no impact so far from martial law.
The Tourism Council of Thailand estimates cancellations will cut earnings in the tourism industry by 83 billion baht in the first half of 2014. Last week, the tourism body cut its foreign tourist arrivals target for this year to 26.3 million, the lowest in five years, from 28 million.
The council's vice president, Pornthip Hirunkate, said there had already been some cancellations since the announcement of martial law and predicted a further 9 percent fall in arrivals in the April-June period from a year earlier.
"The martial law will have some impact on tourists but this year is not a good year for tourism anyway because of the protracted unrest," Pornthip said.
(Additional reporting by Manuel Mogato in Manila, Amy Sawitta Lefevre in Bangkok, Lincoln Feast in Sydney, Jonathan Thatcher in Jakarta, Anshuman Daga and Brian Leonal in Singapore, Trinna Leong in Kuala Lumpur and Kiyoshi Takenaka in Tokyo; Writing by Stuart Grudgings in Kuala Lumpur; Editing by Alex Richardson)