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15 Mar 2016

Tourism

Opportunities and Challenges for Thailand's Yachting Tourism (Current Issue No. 2714)

Thailand's government is increasingly gearing up towards attracting quality tourists in 2016. Yachting tourists are a high-potential market segment that the government aims to promote since they are high-end spenders with four times the spending power of other segments. Thus, the government and private sector are cooperating to boost such business; the government provides marketing support and eases regulatory controls, e.g., extended visas for yacht owners, captains and crews, plus an accelerated fast track on a new law to allow superyachts to enter Thailand's waters for leisure and commercial activities, as well as financial support to related businesses, e.g., marinas, to elevate service and competitiveness.
In a KResearch analysis, yachting tourism in Thailand is divided into two niche market sub-segments. The first are domestic yachts that have an overall length less than 30 meters and typically operating in the Andaman Sea around Phuket and Krabi. This niche is conducive to Thailand's tourism and revenue generation for marinas, etc., and towards general local employment. Secondly, there are foreign yachts that visit Thailand wherein some thousands moor here each year, most of them from Europe and Asia, e.g., Hong Kong, Singapore, etc. These yachters are known to generate income for local businesses via shopping, purchased services (Thai massage, spa, etc.), cleaning and maintenance, etc. However, growth in this niche market has been limited by the depth of the Thai seabed and laws that allow superyachts to enter Thailand's waters, but are prohibited from involvement in commercial ventures (e.g., yacht charter services), etc.
Given such factors, KResearch expects that Thailand's yachting tourism will grow to reach THB5.8 billion in revenue this year. Of that total, domestic yachts should generate THB3.2 billion, mostly in marina services, while foreign yachts may spend THB2.6 billion, also on marina services, as well as related businesses such as tours, retail commerce, etc.
Looking ahead, we should enhance our capacity to match that of Singapore, which has an outstanding reputation towards private investments in marinas and other facilities, as well as for personnel development and dry docks for yacht maintenance. Despite being a regional yacht trading hub, Singapore still has some limitations, e.g., geographic location, high service costs, etc. Therefore, Thailand may take this as an opportunity to attract large leisure yachts from Singapore by promoting our strengths in service quality that comes at lower costs. Such efforts may attract more yachting tourists and help Thailand to reach target of becoming the 'Marina Hub' of ASEAN in the near future.

In the meantime, tourism business operators may entice yachtsmen by classifying these tourists according to travel purposes, e.g., leisure, family contacts, honeymoons, water sports (diving), etc., and promoting suitable activities that stimulate higher spending during their stays here. Moreover, tourism-related businesses could attract off-season Thai tourists with high purchasing power when foreign yachts wane. Furthermore, marina operators should give priority to retaining skilled personnel in various areas of hospitality service since clients in this segment are high-end visitors with generally much greater purchasing power than those in other segments. Therefore, they tend to have much higher expectations towards service quality as well.

Tourism