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20 Oct 2006


New Government Restoring Confidence: 2006 Tourist Arrivals to Reach 13.4M (Business Brief No. 1883)

From H2/2005 to H1/2006, Thai tourism recorded steady recovery after previously being hit by the Tsunami. Tourist arrivals totaled 6.7 million in H1/2006, a year-on-year increase of 30 percent over the same period of last year when tourism was adversely affected by the disaster. During the second half of this year, however, visitor arrivals are poised to show a slower growth despite several favorable factors. Among them are ebbing oil prices, highly-promoted tours to trace the routes of royal visitors following the celebration of the 60th Anniversary of HM the King's Accession to Throne and the Royal Flora Ratchaphruek 2006 exposition. Since the end of the third quarter of this year, the Thai tourism atmosphere has been marred by some unfavorable factors summarized in the following:
- Strife in the South that has expanded from the three southernmost provinces to Hat Yai, Songkhla in light of many bomb blasts in the heart of the city on the night of Saturday, September 16, 2006.
- Severe flooding in many areas of 46 provinces since the end of August, this year, which is likely to affect tourism during the Loy Krathong festival and the first phase of the Royal Flora Ratchaphruek 2006 exposition.
Still, the military coup staged by Council for Democratic Reform on September 19, 2006, is expected to be only a short-term negative impact on the foreign tourist market. This is because an interim government was formed only two weeks after the coup, thus there will be no power vacuum in the ministries in charge of tourism-related affairs during the final quarter of this year – the high season for the long-haul European tourist market.
The latest political change affected Thailand's tourist arrivals somewhat in September that decreased by 6 percent against the growth of some 11 percent in July and August. As a result, the number of foreign tourists visiting Thailand in Q3/2006 totaled around 3.3 million, rising by 10 percent, year-on-year, thus putting tourist arrivals during the first nine months of this year at some 10.0 million, up 22 percent over the same period of the year before.
The public and private sectors should seriously join hands in addressing some problems plaguing this industry, in particular, the severe flooding at prime tourist attractions in many provinces and the routes leading to those places including Chiang Mai, Sukhothai, Tak and Ayutthaya. What should also be done urgently includes solving the problems related to services at Suvarnabhumi Airport, beefing up security measures at tourist venues, as well as implementation of strict control measures and punishment for unscrupulous practices by tour operators. If these woes are efficiently addressed, Thailand's tourism is set to become more active during the remainder of this year.
KASIKORN RESEARCH CENTER (KResearch) forecasts that tourist arrivals in the final quarter of this year will total some 3.4 million, up 2 percent, year-on-year. Thus, the number of foreign visitors to Thailand throughout this year may total some 13.4 percent, an increase of 17 percent over the year before, when it decreased by 1 percent:
Top three nationalities in foreign visitors to Thailand in 2006 have been:
1. Japanese tourists, whose numbers are expected to slightly exceed their Malaysian counterparts.
2. Malaysian visitor arrivals that exceed the number from Japan, being first-ranked between 2002 and 2005
3. South Korean tourists, who have become third-ranked since 2003, where they were previously placed ninth.
In terms of spending by foreign visitors coming to Thailand, tourist arrivals in 2006 are expected to generate some THB450 billion in revenue, rising by 22.5 percent over the THB367 billion, approximately, of the year before. The top three foreign nationalities that are expected to record the highest spending in Thailand in 2006 are listed below in descending order:
1. Japanese tourists who have always been the biggest spenders in Thailand. This year, spending by the Japanese visitors is expected to reach some THB48 billion, rising almost 20 percent, over-year.
2. British visitors, whose spending has outpaced their Malaysian counterparts since 2005, though their spending was ranked third in 2004. In 2006, British tourists' spending is expected to be close to THB40 billion, a year-on-year increase of over 10 percent.
3. South Koreans: Spending by South Korean tourists ranked fifth in Thailand in 2004. However, since 2005, they have become third-ranked in terms of spending, overtaking Malaysia and the US. This year, South Korean visitors are expected to spend more than THB30 billion in Thailand, rising some 15 percent over the year earlier.

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