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Tourism still robust, despite cheap-tour crackdowns

Feb 6, 2017 | Emerging Trends Advisors

(The Nation)DESPITE the government crackdown on illegal tourism businesses and cheap “zero-dollar tours”, China is expected to remain the strongest source for arrivals to Thailand, according to Tourism and Sports Minister Kobkarn Wattanavrangkul.

China remained the main source market during low season in the third quarter, when the Thai government began the crackdown. A total of 2.4 million Chinese visitors travelled to Thailand between July and September, representing a rise of 14 per cent and generating 15 per cent more revenue than in the same period last year.

Last year, Thailand welcomed nearly 8 million Chinese, who generated income of Bt370 billion for the economy. The number is expected to reach 8.9 million in 2016 and 9.1 million in 2017, ahead of Malaysia, South Korea, Japan and Laos.

Total international arrivals since January 1 have reached 32.1 million, up 8.9 per cent from 2015, and generated revenue of Bt1.6 trillion, up 12.6 per cent.

Tourism is expected to generate revenue of Bt2.5 trillion in 2017, representing about 15-16 per cent of gross domestic product.

Although the government has begun to crack down on illegal tourism business and cheap package tours, these problems might take several years to resolve fully and transform the country from a mass to a quality leisure destination.

The National Economic and Social Development Board has predicted that the tourism sector would continue to grow in the final quarter of 2016 despite the crackdown on zero-dollar tours because more than 100 tour operators would bring visitors into the country.

Registered hotel operators have urged the government to continue to revoke non-registered hotels as data show only half of all operators have hotel licences. They claim that zero-dollar tourism has damaged the Thai tourism industry for more than 20 years. Many illegal hotels are claimed to be running business beyond the law by using local nominees, by defrauding tourists, and by evading taxes.

“Tourism authorities and operators may need to create more strategies in order to strengthen key markets – and China in particular – because neighbouring countries such as Malaysia and Singapore have already made moves to attract more Chinese |visitors by offering preferential visa schemes,” Kobkarn said.

Surat Keawdee, manager of The Emerald Hotel Bangkok, said many hotels had cut their room rates even in the current high season because of fewer arrivals – particularly due to the huge drop from China after the crackdown on low-budget zero-dollar tours. However, more high spenders from China are expected to keep coming to the major destinations in the Kingdom.

Suresh Subramaniam, general manager of Novotel Platinum Pratunam, also believes that more individual tourists from China will come to Bangkok. As a result, other hotels involved in the China market could face difficulty due to a reduction of low-income tourists.

Udom Srimahachota, adviser to the Thai Hotels Association and owner of Baan Talay Dao Resort in Hua Hin, said that town and nearby Cha-am would remain popular destinations for tourists, especially Westerners.

These two beach resort towns could offer 20-30 per cent lower prices compared with some other destinations such as Phuket, Pattaya and Koh Samui.

The average occupancy rate for the entire year in Hua Hin was 55-60 per cent and will climb to 70-80 per cent in high season, Udom said.

Operators have urged authorities to promote Hua Hin and Cha-am as destinations for emerging markets including mainland |China and India.

Korean and Hong Kong visitors are also expected to increase during peak periods.

Hua Hin can be promoted as a wellness destination with links to newly opened destinations in Myanmar.


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