Australians best value as tourism industry rethinks strategy

Australians have been identified as the ideal nationality of foreign visitor to Thailand, as surging tourist arrivals are forcing a rethink of industry targets.

Foreign tourist arrivals for this year are projected to reach almost 35 million people — equivalent to half the country’s population. With such an influx becoming harder to manage, the government is shifting its tourism strategy away from boosting visitor numbers to increasing the overall revenue holidaymakers bring in.

Tourism Minister Kobkarn Wattanavrangkul said the government is targeting a minimum increase in tourism revenue of about 5% annually instead of a particular number of visitors, And this is where Australians prove the most valuable.

In terms of length of stay and average daily spend, Australians represent the best value, Ms Kobkarn said.

“Maybe they’re the ones who are like: this is my time — I eat, I shop, and I eat, and I shop,” Ms Kobkarn, 56, said.

Australian visitors were among the top 10 biggest spenders in terms of per capita daily expenditure last year, forking out 5,831 baht, Tourism Ministry data shows. Their average length of stay of almost 14 days was the highest in that group. Some nationalities take even longer holidays but tend to be more parsimonious. British tourists, for instance, stayed for just over 18 days on average while spending 4,376 baht daily.

Tourism is a bright spot for Thailand’s economy, but it faces challenges such as political uncertainty and sluggish consumer demand. The sector makes up about 18% of GDP, Ms Kobkarn said.

“We no longer have a target for number of tourists,” she said. “We shouldn’t go beyond the limit that we can cope with. When people say that Phuket may be too crowded, or Bangkok is too crowded, we have to make sure that we are promoting other destinations too.”

Overseas arrivals more than doubled over the past decade, powered by a surge in Chinese who contributed 28% of 1.6 trillion baht in tourism receipts in 2016.

Affordability is one reason why Thailand has usurped Malaysia as Southeast Asia’s most popular destination, but Ms Kobkarn said the nation must focus on quality as well as cost to tackle emerging competition from the likes of Myanmar and Vietnam.

Quality does not just mean targeting wealthy tourists, she said. Instead, it refers to offering good value experiences that encourage return visits, increase the average length of stay and bolster daily spending per head.

Visitors from the Middle East are the biggest per capita daily spenders, according to the Tourism Ministry data. Chinese tourists stood out for above-average expenditure and sheer number of arrivals — 8.8 million, dwarfing other nationalities and making China the most important single country for tourism receipts.

Thailand’s years-long tourism boom has slowed somewhat in recent months. This is thought to be partly because of terrorist bombings in resort towns in August last year and a clampdown by the military government on some operators of large Chinese tour groups, which were judged to generate insufficient local spending.

Arrivals are likely to pick up in the second half of 2017 as security concerns fade and Chinese visitors embrace independent travel over package tours, according to Bloomberg Intelligence.

That signals more strain for the country’s airports, some of which are already stretched beyond capacity. State-run Airports of Thailand Plc is planning to invest about US$6 billion (202 billion baht) over a decade to try to ease the bottlenecks.

Even as Ms Kobkarn tries to focus on revenue targets rather than visitor numbers, arrivals are projected to climb.

The Bank of Thailand forecasts 34.9 million tourist arrivals this year, a climb of about 7% from 2016, and 37.3 million in 2018. That is projected to help Southeast Asia’s second-largest economy expand 3.5% in 2017 and 3.7% next year.

Thailand needs to be a quality tourism destination since a range of factors can prevent it being seen as merely the cheapest, Mrs Kobkarn said. “We’re working very hard for people not to think only of the cost,” she said. “We’re not the best. We still have many negative things. But we’re very sincere in improving ourselves.”