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24 Nov, 2014

Glimmer of Hope for Thailand: Uptick in Oct marks first monthly arrivals growth in 2014

Bangkok – A 67% surge in arrivals from China helped Thailand record an overall growth of 6.14% in visitors in October, the first month of positive growth this year. It was the first glimmer of hope that the third-quarter 2014 will generate an uptick, if not an outright upturn, in visitor arrivals and help Thailand meet the revised target of 25.5 million visitors.

Visitor arrivals to Thailand have reported monthly declines all through from January-September, with the biggest decline of 24% in June, immediately after the military coup and declaration of martial law in May.

In October, the total of 2,180,601 arrivals included 501,043 visitors from China, a market share of 23%. The upturn raised the total number of arrivals in January-October to 21,626,233, which is still down by an overall 8.72% over the same period of 2013.

An analysis by the Ministry of Tourism and Sports said that the main reason for the growth in Chinese arrivals was the exemption of visa fees approved by the National Council for Peace and Order (NCPO) specifically for the August-October period.

According to the Tourism Authority of Thailand, the visa-fee waiver was designed as a short-term tactical measure to take advantage of a Chinese long-holiday period in October. It also applied to visitors from Taiwan. To expedite facilitation of visa-on-arrival for Chinese tourists at Suvarnabhumi airport, Bangkok’s main airport and Thailand’s main gateway, during the three-month period, there were three specially assigned “Chinese Lanes” and five “Premium Lanes”. Chinese-speaking translators were also stationed at several areas throughout the Airport.

The October arrivals figure are showing some interesting trends, due to changing market conditions, external factors and new transportation developments. Some of the most noteworthy changes are in arrivals from the “million-man” source-markets, i.e. six countries from which Thailand received more than one million arrivals in 2013: China, Malaysia, Russia, India, Japan and Korea which together generated 45% of total arrivals.

In October, arrivals from three of those countries (Russia, Japan and Korea) were down while the remaining three (China, India and Malaysia), were up. In addition, arrivals from the entire European region (except Ireland and East European countries) were down.

  • Russia was the largest source market from Europe. In October, Russian visitors to Thailand totalled 115,197, a decline of 23.24% over Oct 2013 This was entirely due to geopolitical and economic reasons, specifically the fallout from the Ukraine crisis and the impact of the economic sanctions, which has depreciated the value of the rouble.
  • Japan recorded arrivals of 101,751, down 10.11%, and Korea recorded arrivals of 93,900, down 15.03%, largely due to lingering fears over continued martial law.
  • On the other hand, Malaysia, Thailand’s second biggest source market, recorded arrivals of 262,803, up by 11.05%, and India was up 9.14% to 87,990. This was a turnaround as arrivals from both countries had plunged following the May 2014 coup.

There were promising signs from the other ASEAN markets: Arrivals from Singapore were up 4.92% to 79,564; Myanmar (+48.65%), Cambodia (+16.40%), Philippines (+4.60%), Brunei (+0.99%). However, arrivals declined from Vietnam (-14.03%), Indonesia (-18.88%) and Lao PDR (-21.24%).

The huge growth in arrivals from Myanmar was the clear consequence of the positive economic and political changes taking place in that country. One of the most noticeable trends is an increase in medical tourists from Myanmar.

Arrivals from Europe declined 10.83%.

  • United Kingdom and Germany ranked the second and third largest sources of visitor arrivals — 70,913 (-1.31%) and 53,605 (-3.19%) respectively.
  • French visitor arrivals totalled 44,397 (-1.88%).
  • Arrivals from Denmark, Sweden and Norway were down -9.63%, -10.47% and -14.27% respectively.

Other key markets:

  • Arrivals from the UAE, one of the top high-spending, long-stay markets, grew by 0.35%. But arrivals from Kuwait, Egypt and Saudi Arabia were down -20.13%, -22.75% and -59.18% respectively.
  • Arrivals from the US, the tenth biggest source market for Thailand, totalled 64,130 (-6.82%).
  • From Brazil, a promising emerging ultra-long haul market, visitors grew by 18.61% to 3,882.
  • Bangladesh showed a growth of 12.87% to 10,330.
  • Visitors from Sri Lanka grew by 0.93% to 7,378.
  • Arrivals from Australia and New Zealand declined 7.84% and -14.66% respectively.

Some very important trends that are now becoming game-changers for Thai tourism:

  • Arrivals at Don Mueang airport were up 48.82% to 233,317, clearly showing the positive impact of low-cost carriers. This airport is Bangkok’s primary hub for low-cost airlines
  • Arrivals at Krabi were up 302% to 52,417. Krabi is getting an increasing number of direct flights from regional destinations such as Singapore and Kuala Lumpur.
  • Arrivals at Phuket by first point of entry were up 1.3% to 260,297.
  • Arrivals at Chiang Mai by first point of entry were up 79.7% to 54,009.
  • Arrivals at Samui by first point of entry were up 6.47% to 14,325.

All of these arrivals into secondary destinations are the direct result of increased aviation access, especially by low-cost airlines.

In 2013, Thailand chalked up a record 26.5 million arrivals, up 18.76% over 2012. The TAT and the entire Thai tourism industry are going all out to get business moving again in the final months of 2014. A major promotional effort was launched for the travel trade at both the ITB Asia in October and the World Travel Market in November.