The growing tension between the People's Alliance for Democracy and the government and the use of a state of emergency are hurting the tourism business as cancellations of hotel bookings and Mice events rise.

Spending among foreign tourists in Bangkok is also decreasing due to security concerns. Some night revellers were worried as well about a possible curfew and restrictions in some locations.

Prakit Shinamornpong, president of the Thai Hotels Association, said the declaration of a state of emergency in Bangkok would definitely exacerbate poor sentiment among foreign tourists.

The impact would be felt nationwide because Bangkok is a base for travelling to other areas.

''The declaration suggests Thailand is no longer safe enough,'' he said.

So far, 12 countries including New Zealand, Denmark, France, Sweden, Singapore, China, Taiwan, Canada, Australia, the UK, Japan and South Korea have warned their citizens about to travel to Thailand.

Mr Prakit added that a number of hotel guests in Bangkok had raised questions about whether they could organise meetings or parties for fear that they might violate the state of emergency order. Some had already cancelled meetings, he said.

He anticipated more cancellations for trips to Thailand after the emergency declaration.

Natwut Amornvivat, president of the Thailand Convention & Exhibition Bureau (TCEB), said the agency had acknowledged some Mice event cancellations but it can't estimate the revenue losses now.

''The only thing that we can do now is try to increase awareness among overseas clients by updating them on the situation,'' he said.

Yuwadee Phetphanao, a receptionist at Sawadee Krungthep Inn on Khao San Road, said she had received three cancellations of room bookings since the declaration of emergency rule yesterday morning.

Many tourists kept asking her about the situation after they saw reports on TV the previous night. She tried to explain to them that the situation would not become violent, but many guests chose to travel to the provinces.

Prasert Chanvittayakul, a restaurant owner in the Khao San area, said he was concerned that the problem could worsen.

''Today, business around Khao San Road may not be too affected but if the government announces a curfew, all of us will face hard times,'' he said.

Mr Prasert said that if Prime Minister Samak Sundaravej resigned, the problem would be solved.

Jon Gross, a Canadian tourist, said he saw news reports on many TV channels about the state of emergency yesterday morning but was not concerned because he believed the country was still safe.

''This is the second time I've visited Thailand. I believe in the security here even though the TV footage showed some violence. Khao San is far from the demonstration area. I can still have noodles on the street and do shopping as usual,'' Mr Gross said.