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Thu Sep 12, 2019 12:35 am

Thailand Tourism dropped 30 % in 2019

Thailand's tourism industry finds itself in stormy weather as a falloff in visitors spook trade, even forcing candid admissions from some of Thailand’s tourism chiefs. Thailand has suffered a slump in tourism figures since the beginning of the year as hoteliers and tourism trade leaders have confirmed a huge 20 to 30 % drop for June 2019 in tourist numbers and trade in Pattaya and Phuket this week in separate media interviews. The slump is a startling and quite sudden drop, just seven months after the end of a record tourist year in 2018 and a good start with Christmas, New Year and January numbers.

In December of 2018, the number of Chinese visors arriving in Thailand was over 838,000, a nearly 3% increase year-on-year at the time. A third of tourist arrivals into Thailand in 2018 were mainland Chinese customers. But a perfect storm has now beset Thai tourism – emerging nearby tourist markets, a high currency exchange rate, the US-China trade wars and ongoing fallout from the Phuket Boat Tragedy. Locally there are other issues such as over-development of accommodation causing too much new competition, poor infrastructure and systemic tourist turn-offs never being addressed (Phuket taxi prices is one example).

All this is now broadly accepted, even officially. Figures for tourist arrivals show a slump following January this year. In April and May 2019 the figures for monthly arrivals dropped to 3,195,006 and 2,726,808. These arrival numbers were a big drop from, say, December last year. The TAT recently spoke to a meeting in Thailand’s north-eastern city of Udon Thani. He outlined plans by tourism chiefs to develop niche markets for Thai tourism for secondary locations in the country targeting affluent tourists seeking lifestyle and wellness experiences, including LGBT travellers. He predicted that tourist revenues for 2020 would reach 3.7 Billion THB with a 10 % growth. The authority is, officially, still holding out hope that 2019 can rebound. The optimism is based on hopes and prayers rather than any of the ‘problems’ actually being fixed.

Meanwhile, hotel owners and managers staring down the low-season in Phuket and Pattaya have been raising the alarm highlighting reported drops of 20-30 % compared to last year. Some hotels have admitted occupancy rates as low as 10-20% as the price wars continue to drive down room rates. They admit it’s an unsustainable situation fear that July and August could be as bad as June.

Kongsak Phupongsakorn is the head of the Thai Hotels Association for southern Thailand. He gave a wide-ranging interview this week to Manager Online and frankly addressed the situation. ‘There are hopes that Asian and Australian travellers will take up some of the slack in July and August. But that is all they are, hopes. Most people are expecting July to be just as bad as June.” He blamed the problems not only on external factors but also on shortcomings in Thailand. One was the political uncertainty sparked in the run-up to the election in Thailand and the long process afterwards to form a new government.

The Phuket hotelier also criticised a lack of clarity in government policy and strategy regarding tourism. Kongsak explained that Phuket has seen what he described as ‘leapfrog’ investment in the tourism industry on the island driven by a massive increase in tourist arrivals in five years from 9 million arrivals to 14 Mio. “This poses a major problem for operators who find themselves competing for a shrinking market.”

He suggested that some rooms in Phuket were on sale at 50 % of the low reason rate for June last year as desperate hotel operators try to recoup income on their investments. He also believes that there are now heightened tensions caused by the US-China trade war that is suffocating the tourist trade. This is most notably seen in a dramatic fall-off in Chinese tourists. Kongsak also acknowledged the growing competition from other Asian tourist locations, especially Vietnam and Cambodia. He described a tourist industry in Phuket currently stranded with too many hotel rooms and not enough visitors.

In another rush of candor, Damrongkiat Phinitkar, the Secretary-General of the Entertainment and Tourist Industry of Pattaya told Sophon TV that the number of tourists and trade for June was between 20-30 % down on the same month last year. “Compared to last year, there are between 20-30% fewer tourists this low season.’ He blamed the absence of European tourists from the resort city. The tourist boss said that this had now become a long term trend but that in past years, the influx of Chinese tourists and travellers from other Asian countries had filled the gap. He hoped that European and western travellers are still more likely to arrive at high season. Damrongkiat echoed other industry operators and confirmed that the glory days of the huge numbers of young and middle-aged European tourists crowding out the beer bars of Pattaya have come to an end. They have gone elsewhere or else they are put off by the high Thai baht and adverse economic conditions at home.
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Sun Dec 15, 2019 8:20 pm

Pattaya Tourism dropped by 40 %

This from the Pattaya Entertainment and Tourism Industrial Association when speaking to Sophon Cable TV today. And last year wasn’t good either. Damrongkiet Pinitkarn, secretary of the association says that this high season before the New Year, the number of tourists at night clubs and bars has significantly decreased compared with last year at the same period. “Chinese tourists are also checking in pool villas and having parties instead of going out.”

This survey was concentrating on Pattaya’s nightlife and entertainment venues according to the Association and results of patronage coming from those places. It does not take into effect non entertainment tourism, such as island visits, shopping or sight-seeing. “More Chinese tourists are travelling to Vietnam than Thailand while more Indian tourists are coming to Pattaya and going to night life places.” Damrongkiet says that, anecdotally, the numbers are down a massive 40 % when compared to last year. “Chinese tourists have decreased while Indian tourists are roughly the same as last year. Russian tourists have increased, however, they don’t often go to nightlife or entertainment venues.”

A drop of around 30% in tourism was reported for the party town in July this year with the flow of tourists to Vietnamese destinations blamed for the drop in Pattaya tourism at that time. At the time a leading tourism official confirmed what many Pattaya expats and locals have been saying for the past year… “The days of Europeans visiting Pattaya in large numbers are over”.
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Sun Dec 15, 2019 8:20 pm

Pattaya – European Tourism drops by 30 %

The strength of the THB, rising tourist locations elsewhere around the region, fickle tourists has seen a demographic shift in Pattaya’s tourists and what they are doing during their visits. A leading tourism official has now confirmed what many Pattaya expats and locals have been saying for the past year… “The days of Europeans visiting Pattaya in large numbers are over”. There’s also been a quantum shift in tourist demographics from European countries with the rise of Chinese and now Indian tourism

Damrongkiat Phinitkarn, the Secretary of the Entertainment Industry and Tourism Association of Pattaya told Sophon TV about this year’s low season in Pattaya along with some alarming statistics. “Compared to last year, there are between 20 and 30 % fewer tourists this low season.” Damrongkiat says that it’s obvious to anyone – nightclubs, beer bars and many restaurants were all but empty. “Europeans are no longer coming due to the strength of the baht and other factors like competition elsewhere.” Damrongkiat said that while this was a long-term trend and that the Chinese tour groups had taken their place keeping the numbers afloat, the tour group business was also under threat.

Events such as the Phuket boat tragedy and assault by an Immigration officer on a Chinese tourist at Don Muang airport, have “proven disastrous”. He said that Chinese tourism was also significantly down in Pattaya this year. But, on a positive note, he said that FIT Chinese – Free Independent Travellers who book their own flights and hotels rather than rely on tour groups – had increased. Operators who wanted to stay afloat these days will have to engage with them and not rely on group tours for to fill their buses, tours and hotels.

“Relying on group tours alone was a risky strategy.”

New trends saw a rise in Indians visiting Pattaya, he said, but despite some visitors from Europe it was plain to see that generally Russians and Europeans were no longer visiting in large and sufficient numbers to keep the entertainment industry afloat. But, putting a positive spin on otherwise gloomy news, Damrongkiat said Pattaya’s proximity to airports – Suvarnabhumi and U-Tapao – and its experience in organising successful festivals and activities to bring in tourists were cause for optimism.
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Tue Mar 24, 2020 3:06 pm

Tourism in Thailand and Cambodia hit by Covid-19

Southeast Asia is facing the possibility of billions of dollars in losses from the sharp drop in Chinese tourists since the COVID-19 outbreak. According to a report by global audit, tax and advisory network, KPMG International, the risk of a global recession in 2020 is extremely high as nations shutdown economic activity to limit the spread of the COVID-19 pandemic. A report by the Asian Development Bank (ADB), outlining the economic impact of COVID-19, stated that, “tourism arrivals in many developing Asian economies are expected to decline sharply, as a result of numerous travel bans as well as precautionary behaviour.” Thailand anticipates the loss of five million tourists this year, taking with them "250 Billion THB (over US$8 billion) in revenue", according to Don Nakornthab, Director of Economic Policy at the Bank of Thailand. In February, tourist arrivals in Thailand dropped by 77%, 99 % of cancellations were from China. Thailand receives an estimated 10 Mio Chinese visitors each year.

Several stimulus packages have been proposed by the Thai government to help ease cashflow in the sector. One of which includes 100 Billion THB (US$ 3 Mio) in soft loans for tourism-related operators, to help workers in the industry with daily expenses. The soft loans, sponsored by the Government Savings Bank, would be offered through commercial banks with an interest rate of three to four percent to tourism-related operators facing a liquidity crunch, while the government would also relax debt repayment conditions for those who retained enough liquidity to prevent them from laying off employees “As for the fiscal 2020 budget of THB 3.2 Trillion (US$ 97 Billion), the Bureau of Budget has informed the Cabinet that up to 80 % will be ready for disbursement through the next six months,” said Thailand's Finance Minister, Uttama Savanayana.

“Approximately THB 640 Billion (US$ 19.4 Billion) will be allotted for investment in new government projects, whereas disbursement of THB 350 Billion (US$ 10.6 Billion) can start immediately after the bill passes, THB 96 Billion (US$ 2.9 Billion) will be disbursed once the projects finish the terms of reference and THB 240 billion (US$ 7.2 Billion) should be ready for disbursement from the third quarter onwards.” Uttama also said that the Ministry of Tourism and Sports had estimated that if the COVID-19 situation is resolved around June or July, the tourism industry should be able to recover in the second half of 2020.

Cambodia Tourism Crisis

The Cambodian government has reported a 60 % decrease in the number of tourist arrivals since February this year. Ticket sales at the famed Angkor temple complex in Siem Reap have fallen between 30 and 40 percent this year, while Sihanoukville, a southern beach resort notorious for its casinos, has seen a massive reduction in Chinese tourists and residents. “Since early this year, almost 80 percent of Chinese nationals living and working in Sihanoukville have left,” said a local landlord who is also a civil servant. “A major difference between this (COVID-19) outbreak and the SARs outbreak is that the Chinese economy is much larger and more integrated with other Asian countries. Therefore, travel restrictions may result in an even greater economic impact than before,” Yasuyuki Sawada, ADB chief economist explained.

A report by the ADB estimates that Cambodia will suffer a US$ 850 Mio loss in its tourism sector. With the onset of the COVID-19 outbreak, the country is unlikely to meet its target of two million Chinese visitors in 2020. In early March, Prime Minister Hun Sen and Tith Chantha, Secretary of State at the Ministry of Tourism, called for more Cambodians and people living locally to travel domestically during their holidays. “With calls to urge more domestic tourism, the ministry is working to ensure that all services and products in the tourism sector will be strengthened,” Tith said. “With the measures implemented by the ministry, I believe that the tourism services and products will be strengthened to lure locals.”

However, Cambodia has so far recorded a total of 87 confirmed cases of COVID-19, and two of the patients, a Chinese man and a British woman, have fully recovered and been discharged from hospitals. In addition, 31 French tourists infected with COVID-19 had travelled to multiple destinations in Cambodia before detection – this is the single largest cluster in Cambodia so far. The Ministry of Tourism’s expectation that the number of foreign tourists visiting Cambodia will double after the end of the deadly COVID-19 may be too optimistic and is not backed with a comprehensive response plan.

Cambodia’s government says it has accumulated approximately US$400 million in savings to be used for COVID-19 emergency cases in the Kingdom, though the proportion allocated to the tourism sector has yet to be finalised. Cambodia would soon have to face the fact that calling for domestic tourism is not the answer to saving the tourism sector given the increasing rate of infections currently sweeping through Southeast Asia.
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