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Less could be moreTrue to the sufficiency economy principle, fewer tourists will be targeted in 2007. But with a smart shift in strategies and careful planning, this does not necessarily translate into less revenue By CHATRUDEE THEPARAT
But it comes not without some adjustments to suit the changing core policy of the sufficiency economy of the interim government. Tourism authorities are being asked to stress quality over quantity, and to do more with less when it comes to marketing spending. Promotional campaigns in the coming year will therefore highlight quality tourism that focuses on education and responsible use of natural resources rather than the number of tourists, Tourism and Sports Minister Suvit Yodmani declared on the day he took office. The minister, particularly through the Tourism Authority of Thailand (TAT), also pledged closer co-operation and co-ordination among related organisations, ministries and private agencies, as well as provincial and local administrations, in developing tourism marketing strategies and products that match their individual areas.
He committed over two billion baht to restoring tourism sites, and upgrading the standards of tourism services such as hot springs in both northern and southern provinces. According to Dr Suvit, the TAT, which is directly responsible for tourism promotion and marketing, has been assigned to look for ways to increase tourists’ spending during their stay in the country from 3,700 to 4,000 baht per head per day on average at present, and to encourage them to visit more provinces instead of sticking only to the five major centres of Bangkok, Chiang Mai, Phuket, Pattaya and Hua Hin. In keeping with the government’s policy, the TAT will no longer focus on the number of tourist arrivals. It even revised down its target of foreign tourists to about 14.8 million next year from the 15-million goal proposed to the previous government, according to Auggaphol Brickshawana, the TAT’s deputy governor for policy and planning,. The marketing strategy will thus focus mainly on promoting quality tourism that leans toward education and responsible exploitation of natural resources. At the same time, the cash rich premium segment will be tapped by products tailor-made to meet their varying demand—from classic destinations, emerging destinations, sports activities, trendy products such as beach resort luxury hotels and spas, and the gateway to neighbouring countries. In any case, the TAT remains upbeat that tourism should generate the country about 547.5 billion baht in 2007 from 14.8 million foreign visitors, up 8.42% from this year’s estimate. Revenue from domestic tourists is forecast at 337.8 billion baht from 82 million person-trips, up 3.35%. To achieve this goal, the TAT had sought approval to spend 5.6 billion baht next year on promotion and development, but only 4.43 billion baht was approved — even lower than the 4.7 billion approved for 2006. Since 2003, the number of foreign tourists has been fairly volatile due to unforeseen circumstances such as the Sars and tsunami. The domestic tourism market, however, has risen continuously since 1999 despite economic and political difficulties. The number of foreign tourists at the end of 2006 was estimated at 13.65 million, generating 481 billion baht. About84.63million local tourists would contribute an additional 383.2 billion baht. ‘‘Breathtaking scenery, local culture, historical sites, landmarks and architecture, and hospitality remain strong points for Thailand’s tourism, despite the fact that we have to be cautious about the weak points such as safety and air pollution,’’ said Chureerat Kongtragul, director of the TAT’s marketing strategy department during a presentation on the TAT’s tourism promotion plan for 2007. According to Mrs Chureerat, Thailand remains organised amongst the top10global destinations in the holiday segments of beach holidays, family destination, nightlife and conventions. Thailand was ranked eighth in terms of the perception of country branding, seventh for beaches, ninth as a family destination, fourth for nightlife tourism and 10th for conventions. Thailand’s tourism market features both teenagers and the elderly. Foreign tourists are mostly senior citizens, the middle-aged group, participants in meetings, incentive travel, conventions and exhibitions (Mice) and businessmen, while domestic tourists are families, working people and teenagers.
According to the TAT’s study, most foreign tourists favour entertainment, excitement, educational services and eco-tourism, while Thais travel to refresh themselves, broaden their experiences and seek health products and services. Foreigners’ attitude and tourism behaviour mostly centre around quality and value for money, as well as safety, while domestic tourists concentrate on spiritual values such as taking a break, escaping from a stressful environment, recharging or transforming themselves. To cater to both markets, the TAY came up with different strategies: Proactive campaigns in foreign markets: The new marketing slogan ‘‘Thailand Unforgettable’’ will be a key component in the strategy to increase market share, boost tourism revenue earnings, and enhance Thailand’s competitive edge in 2007. Under the new slogan, marketing activities will seek to accentuate Thailand’s key strengths as a destination: sun, sand and sea; modernity and heritage; and shopping, dining and golfing. According to Mrs Chureerat, the strategies for foreign tourists next year will cover brand presentation with the aim of increasing revenue particularly in the premium segment in Europe, the Middle East, Northeast Asia, Oceania, North America, Asean and South Asia. At the same time, the existing market share will be maintained by promoting Thailand as the gateway to neighbouring countries such as Vietnam, Laos, Cambodia and China. Five new tourism products and services have been identified to cater to the needs of the specific market segments: Classic Destinations (Bangkok, Phuket, Pattaya, Samui and Chiang Mai), Emerging Destinations (Koh Chang, Koh Lanta), Sport Activities (diving, golfing and yachting), Trendy Products (boutique hotels, spas, wellness, medical products), and Special Product of the Year (Royal Flora Ratchaphruek 2006, an international horticultural exposition that opened on Nov 1 and runs until Jan 31 in Chiang Mai.) The Special Product of the Year will allow Thailand to better target the desired market segments and also promote the geographical distribution of visitors nationwide to better distribute tourism earnings and prevent congestion at popular tourist spots. However, the celebration of the 80th birthday of His Majesty the King, and his Royal Discovery Initiative will again gain momentum next year, after the hugely successful celebrations of the 60th anniversary of His Majesty the King’s accession to the throne in 2006. According to Mrs Chureerat, other strategies include making a better use of technology, both as a means of online marketing through partnership with alliances, as well as a medium for getting updated customer feedback. For the domestic market, the TAT’s strategies will next year promote tourism as a part of life. There will be campaigns for responsible tourism and natural resource conservation, as well as educational tours, to encourage Thais to visit more provinces and regions. Keeping the customers happyThe interim government’s move to focus on promoting quality tourism has won applause from the private sector, but improvements are still needed in many areas, particularly in the private sector itself.
The private sector, particularly tour operators, still lags behind when it comes to adjusting to the government’s policy to promote quality tourism and catering to well-heeled tourists, according to Apichart Sankary, president of the Association of Thai Travel Agents (ATTA). In this regard, all fingers are pointing at unscrupulous operators, particularly promoters of the controversial ‘‘zero dollar tours’’, mainly aimed at Chinese travellers. Zero-dollar tours are package tours priced below the operators’ real costs for airfares and hotels. The operators make up the differences through alliances with Thailand-based agents and guides who then steer tour groups to shopping centres, tourist attractions and even sex shows, which in return pay them commissions and kickbacks. The practice has led to several disputes, particularly between Chinese tourists and travel agents in Thailand. Some Chinese visitors have refused to pay the service charges quoted by Thai travel agents since they did not bring sufficient cash to pay for the extras. Chinese media have reported the bad experiences of some of these tourists and the result has been bad publicity for Thailand. To solve this problem, Mr Apichart proposed that the interim government and National Legislative Assembly amend the Tourism Act, particularly clauses that supervise tour operators. As it is today, it is easy for new players to operate a tour business. By registering with the Commerce Ministry, they will automatically be registered with the Tourism Authority of Thailand. Most blacklisted tour companies have taken advantage of this legal loophole and re-entered the business time and again. Mr Apichart suggested that the Tourism Act be amended to authorise only the Tourism and Sports Minister to approve the registration of tour companies. To enhance and optimise the country’s promotional efforts, the ATTA also proposed that the ministry and TAT work as a team in organising and consolidating road shows to promote the country’s tourism. Currently, even local administrations are allowed to hold road shows abroad. Mr Apichart also urged authorities to allow foreign guides and tour leaders who accompany their clients to Thailand to stay longer than 90 days in the country. Many foreign tour operators, especially from Scandinavian countries, usually send staff to accompany their clients to Thailand because there are not enough guides who can speak the languages in Thailand. Mr Apichart said the Immigration Bureau now granted a one-year work permit to only one employee for each foreign tour operator with registered capital of two million baht, and three staff for companies with registered capital of more than five million baht. He said the rule was not realistic because each operator had brought in about 40,000 to 50,000 tourists. And most of the foreign guides have to stay in Thailand for three to five months. The ATTA already proposed to the Immigration Bureau and Labour Ministry that temporary work permits of three to five months be granted to foreign guides and tour operators, but no action has been taken so far. Thailand also tightened its visa-on arrival regulations two months ago for nationals of 41 countries to prevent abuses of the privilege and curb the rising number of illegal entries. After the amended visa rules took effect in September, foreigners from the 41 countries can stay in the country for 30 days after the first visa, which is renewable twice for 30 days each. In other words, a foreigner will be permitted to stay in Thailand for no longer than 90 days in total. However, some foreigners, including tourists bypass the law by resorting to the so-called visa runs to extend their stay. Most take a bus to a border, exit the country and then return on the same day to have their visas renewed. They repeat the practice as many times as they wish, which gives them almost unlimited stays in the country. Anake Srishevachart, president of Thais inn Express Co, also added that the TAT should review its marketing spending, particularly the funds it uses to promote domestic tourism, since several projects were not worthwhile. Shaky landingThe opening of Suvarnabhumi Airport was far from satisfying, and now it looks like the trouble has just begun By BOONSONG KOSITCHOTETHANA
People in the aviation industry agree that Suvarnabhumi, which replaced the overcrowded 92-year-old Don Muang Airport, was opened prematurely, leading to a number of problems. Indeed, as the Economic Review went to press, there were reports that authorities were considering a partial or full closure of Suvarnabhumi in order to put things right. The early days at the new airport, 40 years in the making, were marred by long waits for luggage, delays at check in counters, leaks and insufficient toilet facilities—much to the frustration of passengers and airport staff. Weeks later, uneven and cracked taxi ways were found at the 125-billionbaht airport. More recently, issues such as sexual harassment and aircraft noise pollution have further blackened the cloud above Suvarnabhumi.
All these problems have overshadowed the visual impact of the stylish, airy and futuristic structure, designed by German architect Helmut Jahn, which features an oval-shaped concourse. But despite the flaws and frustrations, most airline managers have given a passing grade for the initial stage of operations at Suvarnabhumi. But they will also admit that it has a long way to go before it can reach the same status as the world’s best, such as Hong Kong and Singapore. Ahead of the opening, airlines were concerned about a number of baggage handling and IT glitches, and even prepared contingency plans to deal with anticipated hiccups. But the problems turned out to be largely similar to those faced at the old airport right up until its closure. Aviation experts agree that Suvarnabhumi has the potential to become a world-class facility, but only if operational effectiveness and cost efficiency are ensured. Persistent problems at the airport have led the panel over seeing the opening of Suvarnabhumi to declare it unfit for an official opening by His Majesty the King, recommending that it be put off to around May or June of 2007. Chalit Phukphasuk, the committee chairman and air force chief, said safety and noise issues prompted the panel to urge the delay to the airport’s inauguration, which was originally scheduled for last month. Meanwhile, the new chairman of the board of Airports of Thailand Plc (AoT), Gen Saprang Kalayanamitr has ordered all airport contracts, plagued with rumours of widespread corruption, to be examined and their contents be made available for public vetting. The board has set up three panels to look into complaints about mafia gangs and passenger problems at Suvarnabhumi. The airport’s wobbly debut has AoT president Chotisak Asapaviriya on the hot seat, with the new board ordering a re-evaluation of his performance. The sub-committee of the previous AoT board, then chaired by Srisook Chandrangsu, gave him 62 points under his latest evaluation, just above the minimum requirement of 60 points needed to keep his position. If Mr Chotisak is deemed unable to carry out his duties efficiently, he may be asked to give up his position.
The opening of Suvarnabhumi Airport is likely to provide a brief respite from air-traffic congestion around Bangkok, before it becomes crowded again in less than two years. This scenario has become more likely based on recent statistics and trends that point to passenger volume through one of Asia’s busiest air hubs soaring to 42 million, possibly by the end of 2006. Air traffic through Bangkok grew robustly in the first nine months of this year, fuelled by the rebound in tourist volume, that was hit by the December 2004 tsunami, and the growth of budget carriers. The total number of passengers flying through Bangkok, including embarking, disembarking and transit, rose 10.76% in the January-September 2006 period to 31.46 million, pushing Bangkok up the Airports Council International’s latest global rating to 12th position, ahead of its rivals Hong Kong (14th) and Singapore (24th). This means there is limited time before Suvarnabhumi Airport reaches its full annual capacity of 45 million passengers.
The International Air Transport Association (IATA), the world’s largest airline group, and the Centre for Asia Pacific Aviation (Capa), the Sydney-based aviation consultant group, agree that the planned expansion of Suvarnabhumi Airport may need to be brought forward to accommodate expected growth in air traffic and to avoid congestion. Capa executive chairman Peter Harbisonand Albert Tjoeng, the IATA spokesman for Asia-Pacific, said the expansion, including the development of a midfield terminal and a budget terminal, at Suvarnabhumi Airport should proceed immediately. However, there has been no serious discussion at Ao Tregarding the original plan to build a mid-field terminal, a third runway and a host of supporting facilities that would raise Suvarnabhumi’s capacity to 54 million by 2011. Theplan,whichwouldcost48 billion baht, was shelved by the ousted Thaksin Shinawatra administration. According to the original master plan, two subsequent expansion plans would follow to ultimately raise Suvarnabhumi’s capacity to 120 million passengers a year by 2026, and double its cargo handling capacity to 6.4 million tonnes a year from three million tonnes. Mr Chotisak’s plan to spend 1.3 billion baht to build a new low-cost carrier (LCC) terminal (with 40,000 sq m of space and capacity for 17 million passengers a year) at Suvarnabhumi to alleviate traffic congestion has also seen no progress with the interim government and the new AoT board. Growing congestion at Suvarnabhumi has given rise to the idea of reverting LCC operations and point-to-point domestic flights back to Don Muang.
However, the Transport Ministry has initially dismissed a push by LCCs to have Don Muang reopened for them, insisting that Suvarnabhumi will remain the capital’s single airport, at least for the time being, to avoid confusion. Meanwhile, an idea to turn the old airport into a major aircraft maintenance centre for the region, to rival Singapore, has received serious consideration from the interim government. In fact, Transport Minister Adm Theera Haocharoen has advised aviation authorities to commission a study to determine the viability of such an undertaking over the next six months. The world’s leading aerospace groups Boeing and Airbus, as well as helicopter producers such as Texas-based Bell Helicopter Textron and Eurocopter, have also expressed initial support for the idea and discussed possible participation. This is seen a possible key role that Don Muang, now left to handle a small amount of chartered flights, will play in the future, as well as catering for private aircraft, public agencies, the military and the police. |
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Among the few policies that the interim government picked up where the old government had left off is promoting the tourism industry, the country’s most-prized cash cow.
Dr Suvit’s priority is to redevelop and rehabilitate popular tourism attractions nationwide after several years of heavy use and neglect.
Suvarnabhumi Airport, a pet project of ousted prime minister Thaksin Shinawatra, was opened for commercial flights as scheduled on Sept 28with little fanfare and under harsh criticism. 
Many of the problems remain unresolved and people continue to complain about confusing and inadequate directions, insufficient toilet facilities, poor air conditioning on the terminal’s top floor, overall terminal cleanliness, uncomfortables eating in departure lounges and poor lighting. 
The industry projects that LCC passenger volume through Bangkok will soar to 15 million in the next two years as more and more travellers embrace the LCC model.