tale of the tape

By Imtiaz Muqbil,
Executieve Editor,
www.travel-impact-newswire.com

Thailand’s travel and tourism industry is its most successful service industry, and one of the top three economic sectors overall along with agriculture and manufacturing.

According to the Ministry of Tourism and Sports, Thailand recorded 19.23 million international visitors in 2011, up by 20.67% over 2010. With an average length of stay of 9.64 days, and an average daily spend of Bt4,187.12 (US$137) per person, the Thai tourism industry generated 776 billion baht in earnings. The target for this year is a little more than 20 million visitors.

Although the industry has grown phenomenally over the years, one of the most important changes has been in the profile of visitors to Thailand. Today, all but two of the top-ten source-market countries are from within the Asia-Pacific region, replacing Europe and the United States, which once topped the charts in the 1980s and 1990s.

In Jan-Sept 2012, visitor arrivals totalled 15,964,133, up 8.69% over Jan-Sept 2011. Lookeast readers may find interesting the following summary profile of arrivals (with all percentage changes being over Jan-Sept 2011), and a brief snapshot analysis of what is driving change. All the figures are sourced from the Ministry of Tourism and Sports:

1. Top performer: China with 1,945,948, up a whopping 39.13%. This figure excludes arrivals from Hong Kong SAR. China will become the first country to cross the two million mark in visitor arrivals in 2012. It has been the fastest growing source-market for the past five years, thanks to close geographical proximity, Thailand’s value for money, visas on arrival at international border checkpoints to Thailand and nearly 200 direct flight connections a week from cities across China to cities in Thailand.

2. Malaysia: 1,778,380 arrivals, down 6.54%. Because it is an overland border-crossing away, Malaysia was historically the top source-market until edged out by China this year. The vast majority of visitors are overnighters and the numbers rise and fall depending on the circumstances in South Thailand. Recently, a number of Southern provinces have also been affected by floods.

3. Japan: 995,072 arrivals, up 9.46%. Japan is one of the largest investors in Thailand and there is a high percentage of business travel. Both leisure and business travel were affected in 2011 by the Fukushima tsunami disaster and the October-November 2011 floods in Thailand. Since then, arrivals have resumed to normal.

4. Korea: 843,136 arrivals, up 5.71%. This is a steadily growing market rarely affected by peaks and troughs. There is plenty of airline seat capacity and Koreans don’t need visas to come to Thailand.

5. Russia: 757,998 arrivals, up 18.93%. This is another fast-growing market, also projected to cross the one million mark within two years. It began with the huge popularity of Pattaya beach resort as a destination for Russians to escape their harsh winters but has since gained new impetus with advent of charters to other resorts such as Phuket.

6. India: 757,998 arrivals, up 7.30%. All four of India’s major metro cities, Mumbai, New Delhi, Kolkata, and Chennai are within four hours flying time of Bangkok. The rise of the Indian middle class, removal of foreign exchange restrictions for Indian travelers, permission given to Indian airlines to start foreign flights plus visa on arrival facilities for Indian visitors to Thailand have been among the major reasons for this boom. More growth is still to come as cities such as Hyderabad and Bengaluru and many other rapidly growing Indian cities get more airline access.

7. Laos: 734,750 arrivals, up 5.24%. This is largely the result of a number of bridges with international checkpoint facilities that now connect Thailand and Laos across the Mekong River. Many areas in the border regions are booming as Laotians cross the border over to Thailand. There are now three bridges across the river and one more is due to open soon.

8. Australia: 689,984 arrivals, up 12.04%. The strong Aussie dollar and Thailand’s value for money promise have played a major role in marketing campaigns designed to show Australians that there is an alternative to Bali. Many Australians are now heading directly for Phuket in their winter months, which equates to Thailand’s summer.

9. UK: 628,880 arrivals, up 0.54%. Arrivals have been affected this year by the Olympics in August and economic conditions generally. However, UK arrivals have one of the largest average lengths of stay (17 days) and one of the highest rates of repeat visitors (67%).

10. Singapore: 570,310 arrivals, up 12.54%. In spite of its small population base, Singapore has always generated strong arrivals to Thailand. Low-cost airlines are funneling weekend leisure traffic to Phuket and the approaching ASEAN Economic Community in 2015 is seeing Singaporean businessmen making a beeline for Bangkok to explore increased investment opportunities.

One source-market growing strongly is Vietnam, which generated arrivals of 497,289, up a huge 23.45%. It is now the 12th largest source of visitor arrivals, but at that rate of growth, it will clear overtake the U.S. at Number 11 by 2013 and probably the UK by 2014.

The advent of the ASEAN Economic Community in 2015 will further boost intra-regional travel as free trade facilitates the flow of visitors within the 10-member ASEAN countries.

Another promising market to watch in future is Indonesia.

Over time, all these changes will lead to significant changes in the way the travel & tourism industry does business, including budget allocations, marketing strategies, service delivery, content of cuisine, signage and much more.

The bottom line is that the Thai travel and tourism industry will remain a “sunshine sector” for the Thai economy for decades ahead.