Month-long anti-government protests turned violent on Saturday when 22 people were killed in clashes between security forces and "red shirt" supporters of ousted former premier Thaksin Shinawatra.
"We were expecting 80-90% room occupancy rate in Bangkok, but I don't think we can make it to 30%," Charoen Wangananont, a spokesman for the Federation of Thai Tourism Associations, told local cable news network TNN.
"We are bleeding continuously as tour cancellations are made non-stop."
On Langsuan Road, close to the protest site, a hotel porter dragged designer luggage down a small alley to bypass roadblocks.
"Soon the hotel will be empty. It's almost a ghost hotel now," said the porter who spoke on condition of anonymity. He said the occupancy rate at his hotel had dropped to 5%.
The road is home to the Grand Hyatt, the Four Seasons, and Marriott Courtyard among other luxury hotels and serviced apartments. Occupancy at the Marriott was just 8.5%, a receptionist said.
Tourism accounts for 6% of Thailand's gross domestic product and employs 1.8 million people directly.
Rachadumri Road, home to Central World, the second-largest shopping complex in Southeast Asia, and other big malls which are closed, has been transformed into a resting area and parking lot for protesters.
More than 100 charter flights had been booked to bring in Chinese tourists for Songkran. Around 70 had been cancelled before the weekend and all have now been scrapped.
Investment bank Morgan Stanley calculates economic growth this year could be cut by 0.2% due to the impact on tourism.
A bigger hit of up to 0.6% of GDP could come from the hit to consumer confidence in the capital.
Thai stocks plunged on Monday, the last day of trading before the three-day Songkran festival, with airport operator Airports of Thailand down 4.1% and national carrier Thai Airways off 9%
Financial markets re-open on Friday when shares are expected to fall after a 3.64% plunge on Monday.
Despite the calm in Bangkok on Thursday, political analysts said Prime Minister Abhisit Vejjajiva's days were numbered and warned the risk of a military coup in this Southeast Asian country was escalating.
Thailand has ridden the revival in worldwide economic growth since the global credit crunch and the government is expecting the economy to expand by 4.5% this year.
But credit rating agencies and economists say the violence will hit tourism, foreign direct investment, economic growth and the country's ability to repay its debts.
Thailand is a key investment hub for industry as well as tourism and some foreign investors are getting worried that the conflict here could hit their businesses.
Fujio Mitarai, head of the Japan Business Federation (Japan's top business lobby), said on Monday he was "very worried" about the potential impact of the unrest in Thailand on Asia, and the roughly 7,000 Japanese firms in Thailand.
Japan's largest department store operator, Isetan Mitsukoshi closed its store in Bangkok on April 3. Rating agencies Standard & Poor's and Moody's both affirmed their sovereign ratings on Thailand on Tuesday while warning about political uncertainties and maintaining the negative outlook on their respective ratings.
S&P affirmed the BBB plus rating while Moody's Investors Service retained the Baa1 rating. Both ratings are three notches above investment grade.
S&P also maintained the local currency rating at A minus.- Reuters
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