By Apornrath Phoonphongphiphat
BANGKOK, April 13 (Reuters) - Thailand tourism had barely started picking up from last year's shutdown of Bangkok airports by protesters when violence returned to the capital as troops and demonstrators swapped gunfire and firebombs this week.
Hundreds of local and foreign tourists still gathered on Monday to celebrate the water festival in Bangkok's Khao San Road, a magnet for budget travellers, but some businessmen wondered how many foreigners would be back next year.
"This could be the last time you see such joy and celebration here in Thailand," said a less-than-festive Surat Wongcharnsilp, chairman of the Association of Khao San Business Operators.
"Around 80 percent of tourists have checked out and more tourists are expected to leave after Songkran," Surat said.
The Songkran water festival marks the start of the Thai New Year. A public holiday began on Monday, officially three days but for many Thais stretching into a week, a period to soak passers-by on the streets or spend time upcountry with family.
With many Thais moving around the country, the festival is normally one of the year's high points for tourism, which employs around 1.8 million people out of a population of about 65 million and accounts for around 6 percent of gross domestic product.
In all, the industry generates about 540 billion baht ($15.3 billion) annually.
But maybe not this year. By Monday four countries -- Singapore, Canada, Australia and Britain -- had issued advice to their people to defer non-essential travel to Bangkok after the government declared a state of emergency there.
DON'T WORRY
Government spokesman Panitan Wattanayagorn put on a reassuring voice on television.
Don't be worried by all the troops, he said, they're there to protect everyone, Thais and foreigners alike.
"We would like again to make your stay in Thailand as safe and secure as possible, and we believe the situation will be brought back to normal very, very soon," he said in English.
Two days before, he had been in Pattaya, a racy Thai resort that was the venue of a summit of Asian leaders, an event Prime Minister Abhisit Vejjajiva had touted as proof Thailand was back to normal after the event was scrapped because of unrest in 2008.
But it was cancelled again before it really got off the ground when hundreds of red-shirted protesters, supporters of former premier Thaksin Shinawatra, invaded the venue.
On Monday, thousands of Thaksin backers were still encamped around Government House in the centre of Bangkok, where they have stopped current Prime Minister Abhisit Vejjajiva from entering his office for over two weeks.
And images were broadcast around the world of Thai troops firing into the air, forcing anti-government protesters to abandon a blockade of a key Bangkok traffic junction in a first show of strength since the emergency was declared.
The protesters had torched a bus and thrown scores of firebombs at security forces at Din Daeng junction before the army finally retaliated, witnesses said, incidents not likely to encourage visitors.
In 2007, 14.5 million foreigners visited Thailand.
Official full-year data was not available for 2008, but in the first 11 months, even with all the trouble that year, arrivals touched 13.2 million.
Apichart Sankary, president of the Association of Thai Travel Agents, was quoted in the Bangkok Post as saying on Sunday, after the events at Pattaya but before the shooting in Bangkok, that tourist arrivals could fall below 10 million this year.
"Right now, there's no hope for the Thai tourist industry," said Surat at Khao San Road.
($1=35.36 baht) (Editing by Alan Raybould and Jerry Norton)