26 Apr, 2013

PATA Youth Forum Hears “Anarchy” Warning if Thai Tourism Growth Neglects Sustainability

Imtiaz Muqbil

BANGKOK – Decrying the corruption and poor law enforcement plaguing the Thai tourism industry, three “NextGen” Thai executives have warned of “anarchy” and a looming crisis if the problems are left unaddressed. One executive also warned of another round of cut-throat pricing competition when the next crisis hits.

The strong words rang out loud during the PATA Youth Forum organised on April 25, just one day before the PATA summit. The subject was The Future of Tourism: Industry Next Generation Speakers from acclaimed private sector hospitality companies in Thailand.

Moderator Mr. Dale Lawrence said questions on the subject of the quality vs quantity challenge facing Thai tourism had been sent in advance to the panelists, Mr. Siradej Donavanik, Manager-Operations & Profit Improvement, Dusit International; Mr. Arrut Navaraj, Managing Director, Sampran Riverside and Ms Chittimas Ketvoravit, Managing Director, Universal Hospitality.

The remarks came as Thailand announced another record arrivals figure in the first quarter of 2013 with a total of 6,828,718 visitors, up by 19% over the same period of 2012. The growth was led by China which surged 93% over Jan-March 2012 to hit 1,122,691, the first time the figure has crossed one-million in a mere three months, thanks mainly to the Chinese New Year holiday in February.

Ministry of Tourism and Sports figures showed visitors from East Asia totalled 3,623,713 (+28.50%), Europe 2,131,719 (+10.28%), the Americas 331,070 (+8.71%), South Asia 313,634 (+16.03%), Oceania 250,124 (+6.07%), Middle East 139,499 (-1.20%) and Africa 38,959 (+6.70%). Russia, Japan, Korea and India all reported double-digit growth in the first quarter.

Mr Siradej and Mr Arrut discussed how the changes in Thai tourism were personally affecting their family-owned companies. The Dusit group, founded by family matriarch Mrs Chanut Piya-oui, Mr Siradej’s grandmother, is now undergoing a revamp and restructuring to prepare for a highly competitive future. Mr Siradej said the group would also be expanding the Dusit Thani college, which has 4,000 students across six campuses in Thailand and the Philippines.

Mr Arrut, a member of the family which owns what was once known as the Rose Garden, a hugely popular venue for incentives, has now diversified and returned to the country’s agricultural roots by entering the organic farm products market. Ms Chittimas’ company owns the Novotel hotel at Bangkok’s Suvarnabhumi airport. A separate company also manages the Novotel Siam Square in downtown Bangkok.

Ms Chittimas said that in spite of several years of repeated disasters and conflicts, the number of tourists continue to rise. The need of the hour, she said, is to “do better by managing our destinations around the country more properly and show better consideration and respect for national heritage sites, our national assets.

“There is enormous room for growth and hence revenues. But all of us, hoteliers, tour operators, all those who benefit from tourism, we have to be responsible for our environment. Sustainability is the key word here. Tourism has to be sustainable.”

She said she had spent the last weekend in Phuket, her first trip in many years, and gone over to Tachai island in the Similans archipelago of the Andaman Sea. The island is in pristine condition, she said, because it is only open for tourists from November to April and closed for the rest of the year so that the environment can take a rest and refresh itself. By contrast, she added, many of the surrounding islands are being over-run with tourists and all the fallout that results.

“With the increasing number of visitors coming, more growth is guaranteed. But all of us have to take care of growth. It is even more important for the next generation to be more cautious and responsible. We have to (include) the social costs into the costs of our running business.”

She cited the example of Pattaya which she said was completely degraded 10-15 years ago but has now been rehabilitated after the local people realised the problem and took the necessary measures to clean up the beaches and improve the sea-water quality.

Mr Siradej said he felt that tourism growth and national assets were in a state of “huge conflict.” He added, “There was no regulation (of industry growth in the past) and there is none now. People run riot and open hotels and develop new real estate deals without taking onto consideration the natural environment.”

As an example of best-practise, he cited the Maldives where he was involved in the opening of a Dusit resort. “The government there has gone a long way towards protecting those islands and the natural environment because that is all they have. We (Thais) are not island people but we have to be mindful of our natural assets too.”

Citing the popular dictum that the natural environment is not handed down to this generation to by the previous generation but merely held in trust for the next, Mr Siradej noted that tourism was one of the economic sectors which had helped Thailand develop as a nation.

“But the regulatory side has not gone hand in hand. If that continues, at the current pace of development, there will be anarchy.” Even now, he said, with all the corruption and the bureaucratic requirements, there are places in Thailand “where you don’t even need a license to open a hotel.”

He said that if nothing is done to educate people, it will be too late and some of the changes will become irreversible. “This is the crisis we have come to. I think we need to have more of a louder, united voice to raise our concerns. Unless we can make our voice heard, nothing will happen.” He also called for benchmarks to be set for the future so that cause of growth and sustainability can be advanced hand in hand.

Mr Arrut agreed with all of the above. “We cannot throw around (target) numbers like 30 million visitors without putting some thought into it. With the numbers, they are just trying to prove something and make a point or win awards without putting any thought into what’s behind the growth.”

Such short-term targets need to be replaced with a more long-term view. “Numbers are not important to me. I’ve been a stockbroker and worked for Shell (oil company). I don’t believe in five-year plans because they never come true anyway and nobody remembers what you did the year before.”

The discussion also dwelt on the issue of marketing Thailand as a value for money destination and how to distance this from acquiring a “cheap destination” image.

Mr Siradej said, “In the market, we are getting stuck in the cycle of competing on price all the time but with quality tourists, we can focus on our product. We have (the right range of products), the food, culture, heritage, and the religion and we have the natural assets like the beaches. People do want value for money but if a crisis hits, we will go back to competing on price.”

He indicated that although both last year and this year have been good, it would be unrealistic to expect the good times to continue indefinitely.

Ms Chittimas said, “We have to manage our industry properly. We have to be more strict and enforce the laws equally for all, investors, developers, tour operators, hoteliers and tourists alike. All have to be treated the same. There has to be (higher) standards of law enforcement.”