Major source of economic growth
It's been a challenging year for Thailand's tourism market, following a bloodless military coup in May. The recent murders have further tainted the exotic vacation destination's reputation.
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Tourist arrivals from January until September declined 10% compared to the same period in 2013, according to the Ministry of Tourism and Sports in Thailand.
Thailand's tourism market - which employs over two million Thai residents, generated 1,800 billion Thai baht ($55.3 billion) in 2013 - roughly 6 to 7 percent of the country's total gross domestic product.
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Much of the slump came from a drop in Chinese tourists, Euromonitor's Anuwong said, Thailand's largest source of tourism. But this wasn't due to the military coup, she said, but outside factors including the loss of the MH370 aircraft in March, which had a high number of Chinese on board.
"The number of Chinese tourists is showing signs of recovery and might be able to drive the overall tourism industry performance by year-end," she added.
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What tourists think
Tourists that have recently visited Surat Thani were divided on whether the ban would impact tourism.
"I think on Koh Phangan, it will cause some problems, the smaller parties (the Jungle experience for example) were the best parties there," said Daniel Voyce, a 31-year old technical architect from Melbourne.
Matteo Benoldi, 27-year old Italian photographer, told CNBC the closure of the beach parties could be a good thing.
"I'm in Koh Tao now, just moved from Koh Phangan and trust me the parties are the most horrible things. You will not see more than tourists getting drunk and aggressive, it's better without them," he added.
The murdered British couple: Hannah Witheridge, 23, and David Miller, 24, are reported to have been out drinking before going to a secluded beach where they were killed. Two men from Myanmar have been arrested and charged with their murders.
Also adding to concerns, an American tourist was severely injured in Phuket from an attack on Friday. A local has since confessed to the crime.
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