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Thailand focuses on international, but needs domestic tourism

Neill Fronde

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PHOTO: While international tourism disappeared, Thailand hasn't been focused on growing domestic tourism. (via Pixabay)

With Covid-19 closing borders for more than a year, the damage from losing international tourism has revealed a major weakness in Thailand’s overall tourism strategy. With up to 18% of the country’s GDP brought in by tourism, the disproportionate dependence on foreign travellers and lack of attention to domestic tourism has ravaged the industry and the national economy.

Thailand had enjoyed a booming international tourist market, with up to 40 million foreign travellers arriving each year in the country and spending trillions of baht. But many fear now that it was to the detriment of a healthy domestic tourism market. Figures show that, while tourism made up 14.2% to 18.2% of the GDP each year, domestic travellers made up only 5.3% to 6.39%, while international tourism generally made up 11% or more.

Without foreign holidaymakers due to Covid-19, once lively resort towns and tourism hubs are ghost towns, with 80%-90% of hotels, restaurant, bars, walking streets, and other tourist-related businesses shuttered. The National Economic and Social Development Council downgraded their travel estimates to only 500,000 foreign travellers, less than 2% of Thailand’s peak figures. They are forecast to bring in 150 billion baht, a fraction of last year’s domestic tourism totals of 480 billion baht.

Thailand has spent the last few months falling all over itself trying to get a cohesive international reopening plan stabilized while failing to vaccinate enough of the local population to safely reopen by the original July 1 goal. But other countries have recognized the pros and cons of closed borders and focused much more intently on growing sustainable domestic tourism. Thai people take an average of 3 domestic trips a year, while countries like Taiwan with more attention to domestic travel average 5.

Thailand could take a lesson from China, which has embraced its closed border by creating unique incentives to get people to travel and spend. Tech-savvy innovation like localized digital vouchers and distribution of stimulus money only available from ATMs in locations targeted for tourism growth has encouraged people to travel around the country to collect and spend their money. Model cities that emulate foreign tourist attractions are drawing crowds, as well as luxury tourism draws like making Hainan island a high-end duty-free shopping destination.

In fact, China’s domestic tourism success and tight border restrictions also mean the vital demographic of Chinese tourists won’t likely be coming to Thailand in big numbers in the near future.

But instead of catering to a captive domestic tourism market, Thailand is still laser-focused on getting those big foreign spenders across the border, and are missing opportunities and overlooking growing problems. Vaccination has been at a snail’s pace and locals will not be inoculated yet, let alone achieving herd immunity in Thailand’s tourism sandbox destinations. And there’s no guarantee that, when the international tourism tap is open, it will be a flood out travellers and not a trickle.

Locals may consider the incoming tourists and, with often-negative opinions of foreigners and Covid-19, domestic travellers may avoid destinations that open the border, further damaging the tourism economy. Thai people with means may also opt for international travel themselves, abandoning Thai destinations. Many domestic travellers already express frustration with restrictions at provincial entry points for Covid-19 safety, and the general inconvenience and extra expenses of Covid-19 testing and pandemic travel.

Thailand’s international tourist influx has accounted for two-thirds of the tourism sector for years, with domestic travellers often neglected, digging a hole that the country is struggling to address now that the pandemic makes it vital. With no guarantee of international tourism roaring back to pre-pandemic levels, the Tourism Authority of Thailand is aiming to bulk up domestic travel to 1.2 trillion baht for 2022, nearly matching the target of 1.3 trillion baht for international tourism. But is it too little too late to try to reimagine their tourism focus fast enough to recover? Or, while planes aren’t flying, has that ship already sailed?

SOURCE: Bangkok Post

 

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28 Comments

28 Comments

  1. Avatar

    Ian Bromley

    Friday, May 21, 2021 at 7:05 pm

    There are few parallels between China and Thailand when it comes to domestic tourism. Thai have been able to freely travel their country throughout their lives whereas most Chinese have had limited ability to visit their own country. So to Thai people visits to their own back yard are not particularly interesting unless it is tied to VFR. Add to this the soaring household debt and you find many simply have no funds to cover anything more than a day trip which is not going to help rescue the Thai tourism industry. Unless international tourism returns worldwide and this country is able to offer a safe experience there is little hope of rescuing tourism businesses. And right now there are no positive signs on the horizon.

  2. Avatar

    Slugger

    Friday, May 21, 2021 at 7:18 pm

    Oh Lord, not again. This weeks doom and gloom forecast, same as last weeks, and the week before…….

  3. Avatar

    luca

    Friday, May 21, 2021 at 7:32 pm

    comparing with China is impossible, in Thailand there are not enough people able to spend high amounts on holidays, the industry has grown thanks to western international tourism, only in the last decade have the Russians arrived first then the Chinese and finally the Indians reaching up to 40 million tourists.
    It was the foreign currency that helped the spread of well-being even among the lower classes, domestic tourism can only grow with the increase in average income but without international tourists it means that the economy itself must change, in which direction it is hard to imagine.

  4. Avatar

    J West

    Friday, May 21, 2021 at 9:09 pm

    Anutin blew enough BS to sink a barge about “ Thai First” vaccines. It looks like he mixed up Thai with Chinese…..just like he forgot to get emergency assistance to the starving children in Klong Toei. What a righteous citizen. “Dirty stinking farang looks pretty high on the morals ladder right now.

  5. Avatar

    Nigel

    Friday, May 21, 2021 at 9:13 pm

    Well put @Luca. Even now, the average per day spending of a Thai National is less half that of a western tourist. Their visits are also more likely to be a few days rather than than a few weeks. There is only one way to solve this. Vaccinate, vaccinate and vaccinate. Get international tourists back by doing it properly. Not by increasing prices by 25%-50% to try and recoup losses. That will simply lead to lots of negativity and a slow return of tourist numbers. The Thai Baht is currently much more in line with previous performance and that will also help.

  6. Avatar

    Sanuk

    Friday, May 21, 2021 at 9:18 pm

    Comparing Thailand and China is like apples and oranges. The two countries have nothing in common. Population wise alone it makes sense that China can have a robust domestic tourism sector. Thailand’s small population makes this impossible. Thailand is and always will be reliant on international tourism.

  7. Avatar

    Toby Andrews

    Friday, May 21, 2021 at 10:04 pm

    “while the planes aren’t flying has the ship already sailed.” Er, yes.
    Sounds like a crossword clue.
    Or “while the planes aren’t flying” the plane has already flown.
    The problem for the Thais is many tourist hotels are priced for foreign tourists.
    If they start charging Thais reduced prices, and the word went out, the backlash against these hotels would be dire.
    Tragic.
    .
    .
    .
    lol

  8. Avatar

    Dreqo

    Friday, May 21, 2021 at 10:51 pm

    I don’t think the Thais are going to fall for the tourist trap shenanigans and they’re certainly not going to pay western prices or even half. Things are simply going to make an economic reversal, people can pretend it’s not all they want, but it is. You’re watching it happen in real time, and it’s not even close to done.

  9. Avatar

    EdwardV

    Friday, May 21, 2021 at 11:02 pm

    Thailand has spent the last year trying to increase domestic tourism and its having little effect. Trying harder isn’t going to change the underlying factors of why it’s not working now. You can’t compare what China is doing this year to anything, it’s unique to them alone. There are reasons every country in the world (China included) encourages international tourism. It’s an efficient and inexpensive way to generate hard currency and employ lots of people.

  10. Avatar

    intlbankster

    Saturday, May 22, 2021 at 1:16 am

    Let’s get universal basic income going. $2000 for every thai making less than $85,000!

    And an extra $300 for every child..

    Every month!!!

    Dollars, not baht.

  11. Avatar

    Steve

    Saturday, May 22, 2021 at 1:43 am

    My wife is in Thailand, until she met me she never seen much of her own country. I seen more of it than she has. She is middle class not poor. Lets face it, Thai people don,t have the extra income to go on expensive domestic vacations and especially now they don’t. Thai people would not pay the prices westerners pay. Domestic tourism does not bring new money into the country, it only recirculates money in the country already.

  12. Avatar

    Steve Morgan

    Saturday, May 22, 2021 at 3:09 am

    The guy who wrote this is literally just talking his book.

  13. Avatar

    Jack Sombra

    Saturday, May 22, 2021 at 5:24 am

    ‘But instead of catering to a captive domestic tourism market,’

    You mean like they have been doing for last year and half and still have most hotels outside of driving distance of BKK either closed or empty? Hell they have virtually been paying thais to go on holidays and still get such poor showing. Domestic market is just to small and poor, those huge numbers of domestic tourists TaT keeps posting? 1-2 day tourists and even by TaT own admission lowest spend per day, per person and per trip. The only reason they have spent last year talking up the domestic market is because its only market they have had and they have been trying to gloss over how bad things have been

  14. Avatar

    Jokers

    Saturday, May 22, 2021 at 7:00 am

    @intlbankster – @Slugger – you are a weapons-grade moron

  15. Avatar

    Northern Scott

    Saturday, May 22, 2021 at 7:41 am

    Curious as to why the author wishes to see fewer foreign tourists. His solution to the economic problem appears ridiculous. He should leave his California-type govt solutions/ideas back at home in the US.

  16. Avatar

    Gosport

    Saturday, May 22, 2021 at 8:28 am

    It would be better to be the hub of medicine rather the hub of tourism. Thai traditional medicine is so so so amazing.

  17. Avatar

    Jason

    Saturday, May 22, 2021 at 8:28 am

    I don’t know that I would be courting Chinese Tourists. In my country we did and here’s what we found. They arrive on their own chinese owned airlines, are taken by their own chinese bus company, to their own chinese owned hotel. They rarely meet the public as they are conducted by chinese tour guides and come in bus loads to be shown certain places to return to their Chinese owned hotel at night where they rarely leave on their own or in small groups to explore and buy things. Then they get back on their chinese owned airline and fly home. Therefore where does all the money go? Back to China and the CCP (by and large). Maybe they employ hotel staff, paid minimum wages.

  18. Avatar

    Jason

    Saturday, May 22, 2021 at 9:13 am

    Further to my last comment. Contrast the Chinese Tourist to someone from other countries. I choose the airline that is reliable and will give me a good deal (not necessarily my national carrier). I’ll stay at a hotel that gives a good deal and is recommended by reviews (there are stack to choose from). I arrive and take a taxi (owned by a Thai, or driven by a Thai). I eat breakfast at the hotel. Go to a Thai to hire a motorbike for two weeks (not a day), filling up with petrol at a street vendor (not a Service station owned by some overseas corporate). Then travel all over the place every day, eating street food, going to Thai restaurants, buying goods from Thai stores, going on longboats to the islands. Hiring scuba equipment, jet skis etc, etc. And where is the money going? To the Thai people. I get a great holiday and they get valuable income to support their Family and life.

  19. Avatar

    Guillermo Willy BOSSE

    Saturday, May 22, 2021 at 10:05 am

    @Steve – Same opinion Steve. I also like many critical comments made by various readers to this article. My Thai girlfriend (and almost all my Thai friends) knows only the area of Bangkok where she eats, lives and goes to work. Nothing else. Even my taxi drivers know almost nothing inside or outside Bangkok; when we are traveling outside of Rama IV to other parts of Bangkok, I am showing them the way. This is also the case when I need to travel to Lam Luk Ka, Pattaya or Hua Hin, for example. I also share completely the view of many readers that most Thais don’t have enough money for traveling or spending a holiday in international hotels. Best, Willy

  20. Avatar

    BS

    Saturday, May 22, 2021 at 10:46 am

    @Ian Bromley – completely false assertion about Chinese having limited ability to visit their own country, even 30 or 40 years ago, let alone today.

  21. Avatar

    Crispy

    Saturday, May 22, 2021 at 12:15 pm

    The author has framed this piece round the idea that the govt (TAT) has focused on hopelessly trying to revive intl tourism in the midst of a pandemic, while – he argues – the focus should be on domestic.
    It is just a story.
    What the author doesn’t say is that the economy runs 20% on the foreign currency from intl tourism and you simply cannot replace that slug from within the domestic economy. Never mind that domestic tourism would only infect the whole country.
    If Thai strategists were to follow his advice, and succeed, what are his proposals for generating the other, say, 10%? The electric car?

    It is true – and has been often remarked – that expecting intl tourism in the midst of this pandemic is a madness.
    What could be done is to hibernate the industry (it is now in large part destroyed) by upgrading assets and retraining staff; and to focus on defeating the virus.
    Had the govt spent a bit of its foreign reserves on improvements and vaccines, it would come out ready for a bumper high season 2021/2

    The objective should be to hibernate the industry and race to defeat the virus, after which the industry can be re-animated.
    Not waste resources trying to squeeze ordinary Thais – the income and debt levels are not enough

  22. Avatar

    Ray

    Saturday, May 22, 2021 at 1:26 pm

    @Jason – In Vietnam there’s the phenomena of the $10 tourists from China. Before the pandemic, this was happening in Ha Long bay which borders China. The only income for Vietnam was the park entrance fee. Everything else was spent on Chinese owned businesses. For everybody else it was a nuisance as places got overcrowded and a lot of trash left behind.

  23. Avatar

    TS

    Saturday, May 22, 2021 at 1:55 pm

    more doom & gloom: no amount of silly, confusing on/off “schemes” will change the average Thai tourist’s ways. I’ve been here long enough to see the majority of Thais aren’t big domestic vacay spenders. They just don’t have that kind of disposable income. Not saying they don’t have a great time getting away for a long weekend enjoying each other’s company over meals and drinks. Budget hotels and camping. Extremely fun loving by nature but never were or will be money makers for the industry. Pre 2020 foreign arrivals were the tourism engine and this incompetent regime is way behind even countries in it’s own region getting it even close to starting up again. Thailand has other negative non-covid related issues as well.
    Mr.pm dolittle & co: Get your own people vaccinated with quality non chinese vaccines. Quickly. You know, like most of the modern world is doing. Your Hi So’s are booking flights to other destinations to get them. Drop the Thai consulate paper chase/US$100k covid insurance/expensive quarantine for vaccinated arrivals. Maybe, just maybe, foreigners will consider visiting Thailand again in numbers but I think it’s gonna take a long time.

  24. Avatar

    pascal

    Saturday, May 22, 2021 at 7:30 pm

    hummmmm i don t think many thai peoples can afford high class hotel so basically domestic tourism won t help a lot.
    vaccination roll out is running behind, hence before to see the effect of it, it will take more time. if the virus is not under control peoples will think twice before to travel to Thailand at least a certain category of peoples.how long the tourism industrie can hold the situation, how all the families depending of tourism can hold the situation? clock is ticking. I m still surprised of this 3000 cases on daily basis now ……. how many more are not identify …..yet?

  25. Avatar

    Bruce Weber

    Saturday, May 22, 2021 at 8:46 pm

    Thai tourism is little more than revolving business. Every foreign tourist brings in NEW MONEY, money the Thai economy didn’t have until that tourist arrived and started spending. And even the Cheap Charlies spend more than the average Thai can afford.

  26. Avatar

    James R

    Sunday, May 23, 2021 at 2:07 am

    @Jason –

    What do you think the Chinese live on in Thailand, fresh air?

    I see for example the restaurants in Phuket are packed out with Chinese tourists, talking at the top of their voices so the rest of us have to avoid eating at the same place. I must admit they are very messy eaters in general, well the ones on the big tours are.

    They travel in groups but the bus they travel on buys local petrol, needs repairing, servicing locally.

    The Chinese love shopping so they buy local goods, which means tax.

    The hotels, restaurants and whatever else sells things has go pay tax locally as well, plus there are many more millions of Chinese going to Thailand than farangs each year, this is yet another example of the superiority some farangs feel.

  27. Avatar

    Henry Ford

    Sunday, May 23, 2021 at 9:10 am

    I would love to travel domestically in Thailand but they make it impossible. You book hotels or flights then have to cancel because of restrictions. You are forced to take tests or quarantine. You find all the hotels/bars/restaurants/beaches closed when you get there. Why would anyone bother.

  28. Avatar

    Jason

    Sunday, May 23, 2021 at 1:13 pm

    @James R – There are millions of Chinese. But don’t worry James…keep thinking they are helping. That’s what they want you to think 🙂 Just remember when you have a good product, they will copy it, produce it at half the price and send you out of business……

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Neill is a journalist from the United States with 10 years broadcasting experience and national news and magazine publications. He graduated with a degree in journalism and communications from the University of California and has been living in Thailand since 2014.

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