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Chinese tourists heading elsewhere – what did you expect?

The Thaiger

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Chinese tourists heading elsewhere – what did you expect? | The Thaiger

Don Ross of ttrweekly.com reflects on the self-imposed, but unplanned, reduction to Thailand’s tourist numbers – principally Chinese tourist numbers.  If there were growing calls to limit or better control the problems of too many tourists, lax Thai safety laws have done part of the job already. Don writes…

Just a few months back, the debate in Thailand focused on the threat of overtourism, a word we coined to explain how our destinations are at risk from over crowding.

We looked at travel forecasts and based on the more than 9 million Chinese tourists, who visited Thailand in 2017, the arithmetic suggested 2018 would push the total beyond 10 million.

Experts called for capacity caps at resorts and a concerted effort to cool the tourism temperature to counter the threat of “overtourism,” especially from China.

Tourism was accelerating almost out of control. Brakes should be applied experts warned,  but no one dared to slam on the brakes. In the end, Thailand’s notorious security shortcomings stopped the Chinese travel boom in its tracks.

If we believe what tourism leaders and market snapshots tell us, Chinese tourists are going elsewhere and the exodus could cut travel by as much as 25% by year-end. It is probably more likely to downgrade to a conservative decline of 8 to 10%.  However, even that could represent a million Chinese tourists who for various reasons decide Thailand is not a welcoming paradise any more.

Read the rest of the article HERE.



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Opinion

December 4 – Thailand’s national day of shame

Tim Newton

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December 4 – Thailand’s national day of shame | The Thaiger

Today is Thai Environment Day. Today convenience stores, trade stores and shopping malls will refrain from providing single-use plastic bags to shoppers and at the same time will campaign for donation of cloth bags to be distributed to hospitals for containing medicines.

Whether any of this actually happens, we will see.

The proposed plastic bag-free day is the outcome of a memorandum of understanding signed by the Ministry of Natural Resources and Environment and operators of convenience stores, trade stores and shopping malls to reduce the use of single-use plastic bags.

The cynical campaign is another chance for the Thai government to indicate its ‘commitment’ to the Thai environment and the reduction of single-use plastic bags whilst doing next to nothing to actually solve the problem.

Encouraging Thais to reduce their use of single-use plastic bags for one day out of 365 should be seen as national day of shame.

Thailand is one of the region’s main contributors to plastic waste floating around the seas with daily photos of dead sea-life making their way onto social media. Dead sea animals are routinely retrieved and, upon examination, are found to have ingested plastic bags or suffocated with plastic lodged in their mouths or around their necks.

The problem of single-use plastic bags, the removal of these items out of the retail chain and the proper disposal of plastics remains unmanaged and unplanned in Thailand.

Back in October the Central Pattana Group in Phuket, the operators of Central Festival and Central Floresta, who also own the TOPS supermarket chain and Family Mart convenience stores, loudly lauded their ‘no plastic bag’ campaign which meant they would ask customers if they really needed a plastic bag and offered a 200 baht cloth replacement… ONE DAY A MONTH.

Another cynical PR stunt without substance or any real commitment to reduce the amount of single-use plastic bags marching out the doors of their retail stores and shopping centres.

The Ministry of Natural Resources and Environment is saying that after the “plastic bag-free day” today, all the stores and malls will work out their own measures to reduce the use of the plastic bags, such as designating a day or a few days of a week that no plastic bags will be provided to shoppers.

In other words next-to-nothing. No commitments, no targets, just vague words without any concrete action from the Thai Government.

According to unofficial estimates, each Thai generates 1.4 kilograms of garbage a day or 74,000 tonnes of garbage a day for the entire population which means that a total of 2,960 10-wheel trucks with the capacity of hauling 25 tonnes of garbage each will be needed to carry the trash to dump sites or land fills for disposal.

There is enough evidence from multiple studies and surveys (or just walk along any Thai beach) to show that single-use plastics are a major environmental threat and need urgent political attention and action instead or meaningless words and PR stunts.

And watch today as thousands and thousands of Thais will, like every other day, stop on the roadside to purchase their delicious Thai iced coffee in a plastic cup, with a plastic cup-cover, in a plastic bag with a plastic straw.

December 4 - Thailand’s national day of shame | News by The Thaiger

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Opinion

How will ‘Chindia’ change Phuket’s tourism future?’

Bill Barnett

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How will ‘Chindia’ change Phuket’s tourism future?’ | The Thaiger

What exactly is this Chindia?  In a nutshell it’s a flash drive marketplace with 1/3 of the world’s population – China and India.

For a great number of Phuket hoteliers, the first half of 2018 saw marketplace velocity, where RevPAR’s rose on surging demand, and the most often heard comment was the ignominious ‘same same’. Though room rate growth was not there, volume ruled the day.

Next came, what is referred to on the Mainland as the ‘boat sinking’ and suddenly the monsoon gloom thrust the blazing sun into a dark room, way out back. Chinese numbers sunk, airlift declined and online chatter in China denounced not only Phuket but cast a broader shadow on Brand Thailand.

The traditional concept that the mojo of Thai teflon would result in only a slight momentary blip turned out to be erroneous. While the fallout from the incident has lessened, there remains a strongly demonstrated downward shift in Mainland Chinese tourists to both Phuket and Thailand.

What is clear is that there can be no separation in negative sentiment between Phuket and the larger Thai brand. Essentially both get a collective emoji award with an ‘un-smiley’ face.

Another negative has been the depreciation of the Mainland Chinese currency, the yuan. While most of the damage has been done over the past 4 years, this year has seen further erosion, as the Thai baht has remained strong.

Hoteliers staring into the looking glass of the fast approaching 2019 are increasingly being fixated by the magnetic attraction of Chindia. What exactly is this Chindia?  In a nutshell it’s a flash drive marketplace with 1/3 of the world’s population – China and India.

What’s most attractive is door-to-door average flying time to major gateways in both countries of 4 to 5 and a half hours. Over the years I have been asked the question “what is the secret of Phuket’s success?” A great deal of it actually has to do with geography.

Geography has a lot to do with accidental tourism. One can look back to 1967 and the ensuring decade when Thai Airways was instrumental in opening up broad access to Bali which was a connector from Bangkok, and fitting into the Sydney to London route as key access points. In those days, the constraints of long-haul flights made the refueling stop necessary but fast forward to the present and the emergence of single body dominated low-cost airlines fits like a glove into the Phuket Chindia equation. Yes history buffs, Thailand’s flag carrier was a key enabler of early stage Bali hotel growth.

There is little doubt that Indian tourism holds great promise for Phuket. Geography helps, as does the depth of the islands tourism sector to cater to marque events like Indian weddings. Looking into the numbers is enlightening, as there are two significant events on the island which are both valued in excess of US$10 million in spend.

Leading the change has been India’s GoAir who launched direct flights between Phuket and New Delhi as well as Mumbai in October. Next month Bengaluru will be added. Will other Indian carriers such a IndiGo or Jet Airways follow, or will AirAsia join the fray? It’s clearly only a matter of time.

Just last week, I was talking about STR hotel performance data on Phuket in October, and the fact is year-on-year performance remains ‘constrained’ or in straight talk -broad business is down. Inside the numbers some hotels have held traction but in the big picture, the loss  is evident event to the blindsided types out there.

The China situation has been hurtful. And though it’s comforting to see Russian travelers at Phuket International Airport lugging pink and blue plastic buckets of mangos around, the reality is the island’s tourism market is a year-round proposition and relying on snowbirds alone won’t cut it.

We live in an industry that flirts with the thin line between love and hate. The Chinese came, they were loved, then hated and now truly missed. With India, the play is cautious optimism, but the mounting importance of a solid Chindia strategy is the most prolific question facing island hotels now and in the coming year.

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Koh Samui

Koh Samui balancing on tourism razor’s edge

Bill Barnett

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Koh Samui balancing on tourism razor’s edge | The Thaiger

PHOTO: www.thekalasamui.com

“…shrinking Chinese demand due to the economic slowdown and depreciation for the yuan versus the baht”

The time has come to open the discussion about the troubling drop in one of Thailand’s leading resort destinations, Koh Samui.

Looking into the island’s performance numbers, according to data from international  hospitality benchmarking  group STR, at the end of August room night demand was down year-to-date by 4.4%.

Viewing a broader market metric C9 Hotelworks research has shown through September that hotel occupancy for the first nine months of the year declined by over 7% compared to the same period in 2017.

One cannot simply account for the dismal numbers as an effect of the China ‘boat sinking’ crisis which was triggered in the middle of the year. Airlift is the elephant in the room of island tourism destinations. During the first six months of this year, domestic arrivals at Koh Samui Airport dropped by 19%, with each month reflecting a negative variance compared to the same month in 2017.

Many industry watchers have pointed to the termination of Thai Airways International flights between Bangkok and Koh Samui in September as a trigger. The reality of the airlift in fact is TG retired an aging 737-400 jet that was used to service the route. It lacks an appropriate replacement given the island’s short runway and negotiated a codeshare agreement with Bangkok Airways to ensure travelers transit seamlessly.

One telling indicator of the market malaise is Surat Thani Airport on the mainland. Over the past few years a rising number of Chinese travelers had used the gateway and were ferried on to Koh Samui. Diving into the latest available data, international arrivals at Surat Thani for the period of January through September dropped 36%, while domestic arrivals only slightly moved downward by 1%.

Armed with the numbers I started a dialogue with island hoteliers to better understand the situation. For the most part, there were similar stories about shrinking Chinese demand due to the economic slowdown and depreciation for the yuan versus the baht.

Arguably the legacy European markets were slower based on the impact of a World Cup year. Lastly is the rise of Vietnam’s beach destination’s including Da Nang, Nha Trang and Phu Quoc.

Ultimately there is little doubt though that the sheer cost of airfares to Koh Samui remain a vital barrier to entry. Phuket continues to see more low-cost airline carriers which has contributed to growth in price sensitive markets. Samui’s environmental restrictions on the number of daily flights and lack of airline carrier diversity in the LCC space has created a glass ceiling.

For hotels, frankly there is no easy answer. The island has somewhat avoided the massive development crush of other resort locations in Thailand and Southeast Asia, but the nature of the island’s economic dependence on tourism has caged the golden goose. Damned if they do or damned if they don’t, the path to tourism maturity comes with a price tag with either staying small or going big. The hotel and tourism sector will likely remain stressed going forward, though certain niches such as luxury properties and wellness offerings tend to buck the trend.

To sum up the future, something has to happen with the airport issue to balance mounting infrastructure drains. The continued influx of Full Moon travellers transiting to nearby Koh Phangan and early stage development of Koh Tao are just another part of the equation.

In short, Koh Samui either needs to find a way to grow the existing airport or else find a new location and long-term solution to the airport conundrum.

Koh Samui balancing on tourism razor’s edge | News by The Thaiger

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