By Imtiaz Muqbil,
Executive Editor,
www.travel-impact- newswire.com.
Millions of tourists indulging in their annual Christmas/New Year shopping this month are discovering why Thailand is known as one of the world’s great “value for money” destinations. The best buys are locally made products, especially those made in the rural areas under the numerous community development projects, such as the Royal Projects and OTOP.
In 2011, the 19.23 million international visitors to Thailand spent a total of Bt776 billion or US$25.45 billion (based on the exchange rate of Bt30.49 to the USD) in tourism receipts. Although the total number of arrivals was up 20% over 2010, the receipts were up 31%.
According to Ministry of Sports and Tourism figures, visitors to Thailand in 2011 had an average daily expenditure of Bt4,187 per person (US$137) per day over an average length of stay of 9.64 days. Of the daily expenditure, 30% (Bt1,256) was spent on accommodation, 24% (Bt1,002 ) on shopping, 18% (Bt784) on food & beverage, 12% (Bt488) on entertainment, 11% (Bt434) on local transportation, 3% (Bt158) on sightseeing and 2% (Bt65) on miscellaneous items.
Over the last few years, major changes have taken place in who spends how much money in Thailand as well as in the overall rankings of the big tourist spenders. The following analysis offers a snapshot summary of key trends.
Top Ten Generators of Tourism Receipts in 2011 (by country of residence)
Source: Ministry of Tourism & Sports
Russia: This country has experienced a meteoric rise in rankings. Thanks to more than one million annual visitors and one of the highest average lengths of stay (ALS), Russians are now the largest contributors to national tourism earnings.
China: The Chinese are closing in on the Russians, largely because of double-digit increases in annual arrivals. The Chinese ALS is about half that of the Russians, but their total numbers are surging. They will most likely equal the Russian total expenditure in 2012.
Australia: High total number of visitor arrivals, a long ALS and high per capita expenditure makes the Australians the third largest contributor to Thai tourism earnings. This is likely to remain so in future.
Malaysia: A large percentage of Malaysians are border crossers over South Thailand. They have a low ALS and per capita spend but their total spending is high thanks to the fact that they comprise the largest number of visitors. Volume is the key driver.
United Kingdom: The UK has a relatively low per capita spend but that is compensated by a long ALS and high percentage of repeat traffic.
U.S.A.: The Americans have always found Thailand an excellent place to top up on exotic products, especially antiques, Thai silk, handicrafts and the like. The fact that they have to travel exactly half way around the world to get here also invigorates the purchasing power.
Japan: Japanese used to be one of the highest per capita spenders in Thailand but this has dropped due to the economic crisis in that country. Nevertheless, their total spend is high. As Japan is one of the largest investors in Thailand, it leads to a significant flow of business travellers who usually have a high per capita spend.
Germany: A combination of high ALS and total arrivals means that the total economic contribution of German visitors remains high. However, the per capita expenditure, like the Japanese market, is down thanks largely to economic conditions in Germany.
Korea: A steady source-market, which in 2011 became the fifth country to cross the one million arrivals mark. Koreans are good all-round purchasers of both local and foreign brand-name products. A huge improvement in the quality of Korean restaurants in Bangkok certainly helps.
India: India is a recent entrant in the list of top ten generators of tourism income, and is sure to overtake both Germany and Japan in future. In terms of volume, first-time visitors on group tours have a high level of discretionary spending power, especially as most of them are on pre-paid package tours.
| Table 1: Top Ten Generators of Tourism Receipts in 2011 (by country of residence) | ||||
|---|---|---|---|---|
| Rank | Country of Residence | No. of Arrivals | Average Length of Stay (Days) |
Tourism Receipts (Mil. Baht) |
| 1 | Russia | 1,052,361 | 13.29 | 60,090.76 |
| 2 | China | 1,704,800 | 7.61 | 58,001.85 |
| 3 | Australia | 835,719 | 12.78 | 51,841.10 |
| 4 | Malaysia | 2,492,034 | 4.78 | 49.794.77 |
| 5 | United Kingdom | 771,466 | 17.35 | 49,723.09 |
| 6 | U.S.A. | 644,727 | 14.01 | 40,259.89 |
| 7 | Japan | 1,103,073 | 7.65 | 37,740.70 |
| 8 | Germany | 603,979 | 17.09 | 36,337.93 |
| 9 | Korea | 1,001,105 | 7.3 | 34,130.05 |
| 10 | India | 891,748 | 6.9 | 30,250.29 |
Top Ten Listing of Per Capita Per Day Visitor Expenditure in 2011 (by country of residence)
Source: Ministry of Tourism & Sports
U.A.E.: This is not surprising, given the large number of medical tourists from the UAE. It also reflects a large number of expatriates living in the UAE who take their annual summer vacations in Thailand.
Saudi Arabia: Also a result of the growing number of medical tourists and their accompanying family members. This spend would have been much higher. Due to some still unsettled bilateral problems dating back 20 years, Saudi Arabia does not encourage its citizens to visit Thailand. The Thai government knows the economic impact of this and is trying to sort out the problems, after which the total number of Saudi visitors and their spending both should rise.
India: While Indian group tourists provide the mass-spending power, the highest per capita spending is mostly by FITs, such as business travelers and the booming weddings business. Indians are flocking to Thailand by the droves for weddings and honeymoons, usually accompanied by large entourage of friends and family from all parts of the world.
Hong Kong: This Special Administrative Region of China generates a sizeable flow of business travelers, especially as investments pour in to take advantage of the upcoming ASEAN Economic Community. Daily spend has also grown as a result of visitors saving money on airfares via the low-cost airlines, and diverting the savings for shopping.
Singapore: Similar to Hong Kong with the added caveat that the many resorts in South Thailand, such as Phuket and Samui are now easily accessible for weekend traffic, also thanks to the low-cost airlines.
Kuwait: Another Gulf country with a high percentage of family visitors and medical tourists. Like the other Gulf visitors, daily spend is high on accommodation and shopping.
Australia: This is largely due to the strong Australian dollar and the growing number of families seeking an alternative to Bali. Business and convention traffic from Australia is also growing.
Brunei: Very similar spending pattern to the Gulf visitors. Brunei is energy-rich with a high per capita income, which is reflected in the high per capita spending in Thailand, especially on shopping and accommodation.
Korea:Korea has replaced Japan in the top-ten list of per capita spenders, with shopping being the main ticket. There is also a high percentage of business traffic, thanks to growing Korean investments in Thailand.
Sri Lanka: Like the Indians, many Sri Lankans find Thailand a good place to enjoy the growing number of glitzy malls and the middle-income shopping complexes.
| Table 2: Top Ten Listing of Per Capita Per Day Visitor Expenditure in 2011 (by country of residence) | ||||
|---|---|---|---|---|
| Rank | Country of Residence | No. of Arrivals | Average Length of Stay (Days) |
Tourism Receipts (Mil. Baht) |
| 1 | U.A.E | 149,873 | 10.17 | 5,342.27 |
| 2 | Saudi Arabia | 17,535 | 9.41 | 5,089.26 |
| 3 | India | 891,748 | 6.9 | 4.932.55 |
| 4 | Hong Kong | 531,192 | 5.95 | 4,928.08 |
| 5 | Singapore | 789,339 | 5.39 | 4,907.53 |
| 6 | Kuwait | 60,425 | 9.63 | 4,868.09 |
| 7 | Australia | 835,719 | 12.78 | 4,853.81 |
| 8 | Brunei | 10,142 | 5.8 | 4,735.01 |
| 9 | Korea | 1,001,105 | 7.3 | 4,670.19 |
| 10 | Sri Lanka | 53,782 | 6.48 | 4,629.48 |
Conclusion
Thailand’s tourism policy is shifting from generating more visitor arrivals towards boosting per capita expenditure. The total tourism earnings target for 2013 is Bt966 billion. This target should not be too difficult to meet, given the vast range of emerging shopping malls, restaurants, attractions, museums and entertainment spots.
