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7 May 2008

Tourism

East Asian Market Revival, 2008: A Boost to Thai Tourism, Growing 8 Percent (Business Brief No.2156)

Thailand's inbound tourism market has been plagued with much difficulty due to both domestic and international reasons. This has been particularly true amid intense competition from Asian rivals that include Malaysia, Singapore, Macau, Hong Kong and Vietnam. Even so, the Thai inbound tourism market is expected to record higher growth in 2008 thanks to numerous favorable factors, especially foreign tourists' restored confidence in Thailand that has been rebuilding since the simultaneous bomb blasts in Bangkok on New Year's Eve 2006 more than a year ago now.
KASIKORN RESEARCH CENTER (KResearch) forecasts that tourist arrivals to Thailand in 2008 may reach 15.6 million, a year-on-year increase of 8 percent against the growth of 5 percent achieved in 2007, which will likely generate tourism income of some THB600 billion, rising by 9 percent, Y-o-Y. The increase can be attributed mainly to healthy growth in short-haul tourist visitors from East Asia in 2008.
The majority of tourist arrivals to Thailand – more than 55 percent – come from East Asian countries. For them, Thailand is an attractive short-haul destination with diverse tourism resources, moderate travel expenses and friendly people. Such tourists come to Thailand all year-round. On average, East Asian tourist arrivals total nearly 700,000 each month. This is helping to offset a falling number of long-haul tourists, especially those from Europe during the off-season (April-October).
Personal safety and security are among the top concerns for East Asian travelers. Tourist arrivals from East Asia dropped sharply following the Tsunami disaster in late 2004, though their numbers showed a gradual resurgence since the latter half of that year. In 2005, East Asian visitor arrivals decreased 4.8 percent. The market, however, began to return to normalcy in 2006 with growth of 18.7 percent, thanks partly to the low-base effect of the year before.
However, the atmosphere for Thailand's tourism at the beginning of 2007 was unfavorable due to simultaneous bomb blasts on New Year's Eve 2006, followed by the rumor of more bombings at many locations in Bangkok, plus political turmoil that worsened the outlook for problem-plagued Thai tourism, as well as the unrest in Thailand's southernmost provinces. These factors drastically affected the East Asian tourist market which saw a setback in the first half of 2007. However, the market could recover around the end of the third quarter due to clearer political situation in the run-up to the general elections at end of the year, coupled with tourism promotional activities organized by both the public and private agencies. Throughout 2007, East Asian tourist arrivals totaled around 7.98 million, increasing 0.5 percent Y-o-Y, generating tourism income of around THB200 billion, increasing 6 percent Y-o-Y.
For 2008, the Eastern Asian tourist market is set to record remarkable growth thanks to an increasingly favorable atmosphere including foreign tourists' restored confidence toward their safety and security here and marketing activities held by both the private and public sectors to attract more visitors. Therefore, KResearch forecasts that in 2008, tourist arrivals from Eastern Asian countries will total around 8.7 million, increasing 9 percent over 2007, thus generating around THB235 billion in tourism income, up 15 percent.

Malaysia, Japan, South Korea, China, Singapore, Laos, Hong Kong and Taiwan are among Thailand's major East Asian tourist market, which is expected to represent almost half of all foreign tourist arrivals in 2008. The key contributor comes from Malaysian and Japanese tourists who occupy a market share of more than 20 percent of Thailand's inbound tourist market despite only moderate growth seen in these two markets. Fast growing markets are Laos, followed by South Korea.

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