Despite Thailand's bright tourism atmosphere in 1H08, the situation has deteriorated in 2H08 amid political unrest caused by lingering anti-government protests which became more violent in late August and led to seizures of Suvarnabhumi and Don Mueang airports lasting from the end of November into early December. The airport shutdowns were an unprecedented blow to our image as a peaceful country and toward the nation's security. Thailand's foreign tourist market is thus poised to experience a severe shrinkage during the final quarter of this year.
KASIKORN RESEARCH CENTER (KResearch) projects that tourist arrivals into Thailand in 2008 may total some 14 million, a YoY decrease of 3 percent, which may generate some THB500 billion in tourism-related income to the country, down 9 percent from the year before.
Our earlier projection prior to the violent political situation in 2H08 pointed to tourist arrivals of 15.6 million, which could generate around THB600 billion in tourism-related revenue. Domestic political turmoil may cut the number of foreign tourists visiting Thailand by around 1.7 million and cost some THB100 billion in lost revenue from tourism.
The lingering political instability, which may at any time flare up into domestic upheaval again, will undermine our tourism in 2009, which will continue to feel the impact of the global gloom. This is particularly true with the long-haul foreign tourists, especially from Europe and America amid the heightened competitiveness of our Asian rivals. KResearch has therefore made some projections toward Thailand's foreign tourist arrivals in 2009 based on two scenarios:
◊ Domestic Political Situation is Resolved within 2008: Stable Tourism in 2009
If the political impasse is finally resolved by the end of 2008 – where all parties concerned join hands to restore our tainted image, especially in security matters for the confidence of the international community toward Thailand, through effective marketing campaigns, KResearch forecasts that Thailand's foreign tourist arrivals may still contract by 13 percent during 1H09 before experiencing recovery in 2H09 to 18 percent growth. This may put the full-year number of tourist arrivals in 2009 at some 14 million, close to 2008, which would generate around THB516 billion in tourism revenue for Thailand, a YoY increase of 3 percent.
◊ Political Unrest Continues Into Next Year: Deteriorating Tourism in 2009
If the domestic political turmoil is prolonged and continues into 2009, Thailand's image vis-à-vis security may be severely hit, which would make it almost impossible to restore international confidence toward our country over the short-term. In such case, KResearch projects that Thailand's foreign tourist market may encounter a setback during the first three quarters of 2009 before entering a recovery in the final quarter next year. Full-year tourist arrivals in 2009 are therefore expected to total some 13 million, down 7 percent from 2008, which would create tourism-related income of THB460 billion for the country, down 8 percent YoY.
The government should thus give priority to resolving the domestic political crisis to bring about peace and normalcy to the country. All parties in the public and private sectors should also cooperate to improve the country's image as a peaceful country and restore tourist confidence toward security while traveling in Thailand. Moreover, adjustments are needed at both public and private agencies to cope with the changing foreign tourist market and heightened competition. Among the key guidelines recommended include collaborations between the public and private sectors to:
- Launch measures to ensure safety and protection of foreign tourists
- Realign their marketing campaigns to focus on the Asian and Middle East markets and use proactive strategies to compete in niche markets.
- Assist in the ‘Mega Fam Trip' by inviting leading overseas tour operators and mass media to experience our major tourist attractions.
- Together conduct international road shows and trade shows on a regular basis, especially after the domestic political situation is resolved.
- Pool their marketing budgets to ensure an effective and common marketing plan to attract foreign tourists by focusing on value-added tour programs to attract them.
- Support the arrangement of international conventions in Thailand by providing incentives to private organizers.
- Focus on budget tour packages to accommodate the changing behavior of foreign tourists who have become thriftier and concerned about value for money.
Moreover, emphasis may be placed on the Thai tourist market in lieu of foreign tourists to compensate for lost revenue and survive the difficult times, pending the recovery of foreign tourist arrivals. Below are some guidelines to spur the domestic tourist market:
- The government, in cooperation with large private organizations, should promote international conventions by providing tax incentives to organizers.
- Marketing strategies should be readjusted to increase the size of the domestic meeting and convention market on weekdays, plus general tourism on weekends.
- Tour operators should cut inessential expenses and find business alliances to economize while enhancing their marketing potential.
- The public and private sectors should jointly stage marketing activities to encourage Thai tourists to take more domestic trips.