22 May, 2006
Fear of Tsunami “Ghosts” Hurts Thai Tourism Arrivals
Fear of ghosts in the tsunami-hit destinations and instability in South Thailand are set to exact a devastating toll on Thailand’s 2005 visitor arrivals.
Although it is now May, final figures for 2005 have not yet been released, the longest such delay ever. However, some very significant clues are contained in the final figures for January-September which were released last week and show total arrivals of 8.18 million, down 3.19% over the same period of 2004.
The final tally for 2005 is expected to be around the psychologically significant 10 million mark, well short of the target of 13.3 million and about the same as that recorded in the worst years of tourism this decade — 2001, the year of the 9/11 attacks and 2003, the year of SARS and the US-led attack on Iraq.
The shortfall threatens to become another embarrassing political liability for the in-limbo Thaksin administration which coughed up record budgets for tourism revival in the aftermath of the December 2004 tsunami, and is still struggling with the unrest in South Thailand.
It may also affect the future of TAT Governor Mrs Juthamas Siriwan who, inspite of reaching the retirement age of 60 this year, is rumoured to be seeking an extension of her four-year contract due to expire in September. Having developed close ties with Deputy Prime Minister Somkid Jatusripitak on the basis of her tourism marketing credentials, she needs to show results to justify the huge amounts spent last year.
Poor figures will also put Thailand in a bad light vis-a-vis other ASEAN countries, nearly all of which reported arrivals growth last year. e.g., Singapore, +7.4 % to 8.94 million, Malaysia, +4.6 % to 16.43 million and the Philippines, +14.6 % to 2.6 million. Thailand will land up in the same camp as Indonesia, another formerly high-flying destination when it was politically and economically stable but which has also recently impacted by instability in its key destination, Bali.
An analysis of the visitor profiles for January-September 2005 (by country of residence), posted on the TAT website last week, provided clear indicators of both the sources of and reasons for the slowdown:
<> The most noticeable trend is a steep fall in first-time visitors to 3,211,225, down a massive 23.77% over the same period of 2004.
<> The key markets of North East Asia were worst hit. First-time visitors from China were down 25.51% to 335,674; Hong Kong -58.90% to 111,137; Korea -17.35 % to 406,980; Taiwan -50.72 % to 163,469; and Japan -23.49 % to 312,845. First timers from another key market, Malaysia, fell 20.86 % to 249,411. These markets are Thailand’s top sources of visitor arrivals; in 2004, they generated a combined total of 5.5 million arrivals, or 48% of that year’s total.
<> Although all six source markets (except Hong Kong) did show considerable increases in repeat visitors in Jan-Sept 2005, the overall total was not enough to compensate for the sharp downturns in first-timers. In the Northeast Asian countries, tour operators reported that massive publicity about the tsunami-related casualties had generated a major fear of spirits and ghosts haunting the beaches of Phuket.
<> In fact, first-time visitors fell across the board, with the sole exception of three insignificant markets, Brunei, Laos and Saudi Arabia. First-timers from Europe were down -19.13% to 703,568 and the Americas, -5.68 % to 202,393. They were also down from other key source markets like India (-3.08 % to 119,553) and Australia (-19.05% to 100,726).
<> The country was saved largely by strong growth in repeat visitors (+17.24 % to 4,975,258). In addition to those leisure travellers who are familiar with Thailand and keep coming back, there was strong growth in convention delegates (+397% to 433,409). Business travellers totalled 711,091, a statistically stagnant “growth” of 0.14% over Jan-Sept 2004.
In 2005, the TAT spent a lot of time, money and effort to prop up visitor arrivals, especially from China. A number of senior delegations visited China to generate interest, based on the 30th anniversary of the opening of bilateral diplomatic relations. An agreement was also signed with Chinese tour operators for tourism promotion including tactical advertising campaigns designed to generate quick-fix results.
At the moment, the statistics being publicised are the “positive” ones, such as arrivals at Bangkok International airport in the first quarter of 2006, which are showing strong growth over the same period of 2005. That is a no-brainer given the fact that the first quarter of 2005 was marked by significant declines in the post-tsunami period.
Much will depend on the final arrivals tally from Malaysia, Thailand’s top source-market. In Jan-Sept 2005, arrivals totalled 988,675, a fall of 3.4% over the same period of 2004. However, the fact that Malaysian arrivals at Bangkok airport are up indicates that there has been a sharp decline in overland arrivals via the southern border points, mainly due to the local unrest.
The industry awaits the final 2005 results with bated breath.
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