Nov. 15 (Bloomberg) -- Phuket, which suffered a 70 percent drop in international tourism in the six months after the Indian Ocean tsunami, is targeting gay visitors as it seeks to recover from the devastation of December's killer waves.

Thailand's biggest resort island this month hosted Nation V, the fifth staging of a three-day, nine-party gay festival that was banned by former host Singapore. As many as 2,000 revelers filled the Intercontinental Hotel Group Pcl's Crowne Plaza Karon Beach Phuket and seven other resorts for the event.

Tourism officials hope marketing to the gay community will accelerate a recovery in the island, where just 60 percent of 35,000 available rooms are occupied as peak season begins. Phuket is trying to win back business after the tsunami killed at least 5,400 people and wrecked resorts across Thailand's southeastern coastal regions almost a year ago.

"We were 100 percent full," said Eric Smutny, marketing manager at the Crowne Plaza, which doubled as the venue for the event. "The spending power of the gay sector is well known. There are a lot of high-end gay tourists, and I think Asia Pacific slowly but surely is discovering this."

Nation V, the first official gay party hosted by Phuket, coincided with Bangkok's annual Pride Week, a seven-day celebration of homosexuality that culminated with a weekend march through the Thai capital yesterday.

Thailand's more liberal attitude to sexual relations is enabling the country to capture a market that its southern neighbor has shunned. The average participant at previous Nation parties spent S$2,700 ($1,586), according to Stuart Koe, chief executive of Fridae.com, the event's organizer.

Singapore Ban

Singapore hosted the first four Nation parties on Sentosa Island -- soon to be home to a new casino. After the first three passed relatively unnoticed, 8,000 revelers turned up for Nation IV last year and local television news broadcast footage of the party, touching nerves in a state where gay sex remains illegal. Police refused a license for Nation V, and Singapore's health ministry claimed the party was linked to a rise in HIV infections.

Phuket was more than willing to step in, said Suwalai Pinpradab, regional director of the tourism authority. Sulawai said she hopes Nation becomes an annual event on the island and anticipates bigger crowds if it gets the go-ahead next year, once deterrents such as the tsunami, Bali bombings and Pakistan earthquake no longer keep revelers away from Asia.

"It's a good start. I talked to some of the participants and they're happy," she said via telephone. "They're very good spenders compared to ordinary tourists because they had nine parties while they were in Phuket -- day and night."

Gay-Friendly

Singapore's fourth and final Nation generated an estimated S$10 million for the city state's economy, said Fridae.com's Koe. Attendees pay $220 each for unlimited-access tickets, on top of spending for accommodation, food, shopping and drinks.

That's a boost for Phuket, where credit card spending fell 26 percent this year as of Sept. 24, compared with growth of 27 percent in December, according to Visa International Inc., the world's largest card-payment network.

Tourism revenue in Phuket, Krabi and Phang Nga provinces slid by 43 billion baht ($1.05 billion) in the year through mid- October, according to the Tourism Authority of Thailand. Nationwide, foreign tourist spending growth has slowed to 17 percent from 30 percent before the tsunami.

"We chose Thailand because it has a very long history of being gay-friendly and that was very evident," said Koe, who runs Asia's biggest gay Web site. Singapore's "un-gay friendly" message, by contrast, will cost the city state, he said.

"The steps that have been taken to curb the gay community have been a step backward, and that's a message that gets sent out to foreign multinationals who might be considering coming to Singapore," Koe said.

'Pink Dollars'

Thailand's economic growth slowed to 3.9 percent in the first half of 2005, from 6.1 percent last year, partly because of a post-tsunami drop in tourism, which made up 6.4 percent of the nation's $164 billion economy in 2004.

About 5,400 people were confirmed killed -- half of them tourists -- and nearly 3,000 remain missing in Thailand after a magnitude-9 earthquake off Indonesia's Sumatra island unleashed waves that left about 220,000 people dead or missing in 12 countries around the Indian Ocean.

Andrew Tan, 26, a Singaporean graphic designer who attended three Nation parties in the city state, said he prefers Phuket.

He and his partner, though living in Singapore, used to spend about S$1,000 on a weekend hotel room package that included tickets to Nation. He estimates many foreigners who attended Nation in Singapore "spent more than a straight couple coming for vacation for a whole week," attracting sponsors and advertisers keen to tap the market.

"If Singapore doesn't know how to appreciate and treasure these pink dollars, we should spend in a place that needs more tourists," said Tan. "Anybody who can go to Nation can afford a trip to Phuket, and it's more exotic anyway."