Thailand Seeks Ways To Increase Tourism Despite Surging Baht Currency

Thailand’s tourism industry is seeking to increase more first-time visitors on the basis that they tend to spend more money than repeat visitors as the country seeks to find solutions to problems caused by the rising value of its currency.

“First-timers spend 10% to 20% more than repeat tourists and at the same time, we can build a new customer base,” said Yuthasak Supasorn, governor of the Tourism Authority of Thailand.

Tourism has been sluggish this year as the Thai currency, the baht, had increased 6.7% against the dollar, making it an expensive travel destination.

The authority, a state-owned agency, seeks to increase the number of first-time visitors to more than 10 million in 2020, or about 25% of the total arrivals, up from 10% now. As such, the agency has concentrated its marketing efforts in Central Asia, Eastern Europe and Latin America.

In addition, the agency wants the total number of arrivals to reach 41.8 million next year, which would be a record, up about 5% from 2019. The 2020 tourism target is projected to generate receipts of 2.22 trillion baht ($66.2 billion).

Tourism is extremely important to Thailand’s economy. Earlier this year the country’s National Economic and Social Development Council reported that tourism accounted for 18.4% of its gross domestic product.

But Thailand has witnessed a subdued tourism picture in 2019 – in the second quarter the country recorded about 8.97 million visitors, up only 1.43% from the prior year.

Nonetheless, Thailand is one of the most popular tourist spots in the world.

Between 2003 and 2018, the number of tourist arrivals skyrocketed from 10.08 million to 38.28 million – a period that included many problematic events, including tsunami, recession, flooding, riots, a military coup, etc.

Not surprisingly, China is a major source of tourism. In 2018, 10.54 million Chinese visited Thailand, accounting for 27.5% of foreign visitors. Any downturn in China’s economy would likely hurt Thai tourism.

Thai’s soaring currency has hurt one of its most popular tourist spots, Phuket, the island off the southern coast.

Although Phuket has seen a 4% increase in visitors this year, revenue generated from tourism dropped, Prince of Songkla University's Faculty of Hospitality and Tourism reported.

"Phuket's economy is undergoing a transformation. Annual economic growth in the province has been at 6% for the last two decades, but recently we observed a hiccup," said Chayanon Phucharoen, associate dean of research and graduate study at the faculty.

Chayanon blamed the stronger baht as well as “degraded beaches and poor road traffic safety” in Phuket.

"The sector can be improved in many ways, such as by offering tourists new experiences like cultural activities," he added.

Damrongkiat Pinitkarn, secretary of the Entertainment and Tourism Industry Association of Pattaya, another top tourist locale, said that the rising baht in changing tourist spending habits.

"In the evening, more tourists are staying within the confines of their hotels instead of venturing out to party at clubs or discos," he said.

In the north of Thailand the outlook is grim.

“Bookings in the north are down and the outlook for the first quarter of 2020 looks terrible,” said La-iat Bungsrithong, the head of the Northern Hoteliers’ Association based in Chiang Mai. “Compared to last year tourism was down and there seemed little hope on the horizon. Chinese visitors remain the mainstay in the north with direct flights coming in from [Chinese] cities.”

But she added due to the expansion of hotel rooms in recent years, each hotel operator is stuck with many unoccupied rooms.

In an effort to attract more tourists from China’s great rival India, the Tourism Authority of Thailand is offering free visas on arrival for tourists from India until April 2020. The tourism authority has also formed a partnership with Mastercard (MA) to allow easier digital payments for Indian tourists.

Manasi Narasimhan, Mastercard’s vice president of marketing and communications-South Asia, said “over one million acceptance points for digital payments make Thailand even friendlier for tourists looking for safe, secure, and convenient cashless tourism.”

Thailand is projected to receive 2 million Indian visitors in 2019, up from 1.6 million in the prior year.

“We are looking at increasing our efforts to make Thailand a more attractive place for Indian destination weddings,” said Chattan Kunjara Na Ayudhya, deputy governor for international marketing at the tourism authority.

He added Thailand already had hosted almost 400 lavish Indian weddings last year. He also wants to see more Indian families visit Thailand, especially to smaller, lesser known areas.

“There is only a 10% revenue coming from tourist spending in [smaller] cities. We want to change that,” he said. “Whatever events or disturbances happen whether in India or Thailand, we still have Indian tourists coming to the country. We have not noticed any dip during those periods. We have a lot of confidence in the Indian market.”

Imtiaz Muqbil, a travel-trade journalist and expert on Asian tourism, surmised that the primary problem with the Thai tourism industry is that it is aging and in need of a new approach.

“In the past years, Thailand has been hit by every kind of disaster known to mankind but its tourism figures have grown exponentially – this, to me, is what makes Thailand the greatest story in tourism history.”

But Muqbil cautioned that Thailand’s tourism industry is getting mature and needs a “complete check-up, and health and wellness survival plan.”

He suggested that the industry needs to downplay growth and annual numbers and focus more on long-term sustainability with an eye toward protecting the environment.

“Globally, tourism is a sunrise industry going forward – it’s the only industry that meets all the United Nations’ sustainable development goals,” he said. “Thailand has a lead start in this.”