Visitor Arrival Targets Remain Unchanged

Despite the sharp downturn in arrivals in the first half of 2005 caused by the lingering effects of the tsunami, the Thai government is sticking to the original target of 13.38 million international visitors and 76 million domestic trips for 2005.

The target revenue earnings will also remain unchanged at 450 billion baht from international markets and 347 billion baht from domestic tourism.

It is funding this policy with a special budget of 1,500 million baht, of which 800 million baht is to be spent on marketing and promotions in key potential markets including China, Japan, Australia and New Zealand and 600 million baht on boosting domestic tourism.

The remaining 100 million baht will be spent on establishing a new Tourist Channel as a joint venture between the Tourism Authority of Thailand (TAT) and the Mass Communications Organisation of Thailand.

Part of the overseas marketing budget will be used to subsidise charter flights to bring tourists directly to southern Thailand.

Although reviving the tourism industry in the six southern Andaman provinces remains the top priority, the TAT is realising that putting too many eggs in one basket is not necessarily a good strategy.

Hence, a conscious effort is being made to promote other destinations, especially those adjacent to the neighbouring countries of the Greater Mekong Subregion.

A summary of the new policies and strategies that will be driving Thailand's tourism marketing efforts in the near-term future includes:

l The Ministry of Tourism and Sports is to cooperate with the Ministry of Finance to position Phuket as a duty-free port, starting with the duty-free shops at Phuket airport and in the city.

l Promotional efforts are to be stepped up for other beach destinations like Hua Hin, Cha-am, Samui and Chumphon all of which are on the Gulf of Thailand with more than enough tourist infrastructure and hotel supply.

l More attention will be paid to promoting Chiang Mai as the tourism hub of northern Thailand by stressing its new products and giving them wider exposure through public relations activities.

l Position Thailand as the film-making capital of Asia by making it more convenient for interested film-makers from abroad to both shoot their films and documentaries here and do postproduction work. The government plans to reduce the bureaucratic procedures that foreign film-makers have to follow in getting permission to film in Thailand.

l Promote northeast Thailand, especially its southern parts where the famous Prasat Hin temple straddles the border with Cambodia and attracts a lot of visitors keen to visit both countries. Most of the visitors stay on the Thai side as the facilities are better.

l Promote Kanchanaburi province as the tourism hub of central Thailand. The province is already world- renowned because it is home to the Bridge over the River Kwai, made famous by the movie of the same name.

l Improve the average length of stay in Bangkok by promoting day and overnight tours along the Chao Phraya river.

l On the infrastructure side, the Ministry of Tourism and Sports will be working to upgrade services and facilities for tourists, especially in terms of convenience, hygiene and safety.

l Efforts are to be made to boost sales of the Thailand Privilege Card by attracting more private sector investment in it.

One strategic goal that may take a little extra effort is to eliminate the long-standing problem of zero-cost tours, especially from China and the Northeast Asian source-markets. This has been on the agenda for several years but made little progress.

Had the tsunami not hit in December 2004, 2005 would have been a record-breaking year for most hotels in Thailand. At the Shangri-La Hotel Bangkok, our business is comprised of a balance of leisure, MICE and corporate travel. Of all segments, the incentive travel sector has been hardest hit this year. As incentive travel is used as a motivational tool it is very sensitive, so post tsunami, many companies hesitated to use Thailand as an aspirational destination. The good news is that hesitation seems to have passed, as we currently have tremendous interest for 2006 and beyond for our incentive product. Leisure and Corporate markets were very slightly affected. The Shangri-La Bangkok has performed well and to expectations in 2005. However, 2006 will definitely be an improvement. Additionally, with our new Chiang Mai property planned to open in 2007, the outlook is very bright for Shangri-La and Thailand's tourism industry.

Jane Roennfeldt
Director of Sales and Marketing
Shangri-La Hotel Bangkok

I have a very good feeling for our business in 2006. Phuket and the south will be heading towards full recovery after a solid start to the year. Many hotels are already reporting stronger demand. The litmus test will be seeing if this demand has staying, power past Chinese New Year.

Bangkok may or may not have a new airport operating in mid-2006. Interestingly, THAI will not be moving its head office from Vibhavadi Rangsit, so existing support business from THAI, which is a strong producer of hotel room nights, will not automatically migrate south to Suvarnabhumi – not yet, at least.

Japan and Korea have seen dramatic drops in arrivals to Phuket, and the troubles in the South will certainly influence cross-border traffic with Malaysia. This has in the past, artificially inflated visitor arrival figures.

I expect explosive growth in internet-related hotel reservations next year as more consumers turn away from traditional sources to technological solutions. Watch out also for greater consolidation in hotel chains and Global Distribution Systems (GDS) portals.

Andrew J Wood
General Manger
Chaophya Park Hotel & Resort