BANGKOK — In an effort to reduce its dependence on a single country while reviving its once tourism-dependent economy, Thailand is attracting visitors from India, the Middle East and its South Asian neighbors -East.
“We aim to exceed pre-COVID revenues by 2024,” Phiphat Ratchakitprakarn, minister of tourism and sport, said last week. “Although the number of tourists will not be as high as before COVID, the focus will be on quality tourists who respect our environment.”
The minister was speaking at a hotel strategy announcement by a leading conglomerate. It was an unusual appearance that signaled how the public and private sectors are coming together to resuscitate tourism.
Phiphat is responsible for reviving the tourism industry which accounts for around 12% of Thailand’s gross domestic product. This will mean reducing dependence on China – which provided more than a quarter of arrivals in 2019 – by attracting tourists from other markets and maintaining the attention of domestic travellers.
Even before COVID, Thailand tried without much success to diversify from the sheer number of Chinese arrivals. If the strategy is successful, it could serve as a model for other tourism-dependent economies in Southeast Asia, as local and regional populations continue to grow in numbers and purchasing power.
“We want to break the old concept that when you think of hotels, you only think of international tourism,” said Wallaya Chirathivat, chief executive of Central Pattana, which unveiled its medium-term plans on Thursday.
The commercial real estate development arm of Central Group on Thursday announced 37 new hotel projects in Thailand spanning three price-segmented brands, in addition to 49 existing properties in nine countries. Central Pattana aims for hotels to generate 10% of their revenue within five years, catching up with revenue from commercial, residential and office real estate, Wallaya said.
“Many have asked why Central Pattana started a hotel business at that time,” said Phoom Chirathivat, the company’s hotel manager.
“The domestic tourism market continues to grow and may recover faster than the international market,” he said.
As an example, the domestic market has kept occupancy in Indonesia afloat throughout COVID, accounting for more than 90% of rooms sold by French hotel group Accor last year.
“One thing we’ve taught ourselves is to work hard on that domestic market to make sure we don’t lose it in the future,” said Garth Simmons, managing director of Accor Southeast Asia.
In Thailand, 30 million Thais traveled across the country last year, up from 38 million seen in 2019. “Holidays, staycation and digital nomads – these are the groups that are likely to grow,” Phiphat said.
Hoteliers have seen more stable performance during the pandemic in destinations easily accessible by car from major metropolises like Bangkok and Jakarta. The first new Central hotel to open will be in the town of Nakhon Ratchasima, known as Korat, 220 km northeast of Bangkok.
An industrial park in the province has attracted several Japanese manufacturers, including Canon, bringing business travelers. Central said its nationwide development projects will create 3,900 jobs, a particularly urgent need in Thailand’s underdeveloped northeast.
“We found that the hotel market in Nakhon Ratchasima province has great potential and the average occupancy rate tends to be longer,” Phoom said.
Stays in Thailand have lengthened as Europeans, who stayed an average of 16.82 days in 2019, overtook international arrivals this year and last. But European spending has not matched that of Chinese tourists who remain cooped up at home.
Tourism receipts are at a third of pre-COVID levels and could only increase by half by the end of the year without Chinese arrivals, said Somprawin Manprasert, chief economist at the SCB Economic Intelligence Center. .
As summer temperatures peak in the Middle East and India, the Ministry of Tourism has organized roadshows for potential tourists to meet the minister’s revenue target of 1.5 trillion baht this year. Kuwait, Egypt, the United Arab Emirates and Saudi Arabia led in per capita spending in 2019, with average spending of more than 6,800 baht per day.
Tourism will be a major growth engine for Thailand’s economy in the near term, according to SCB, as signs of recession in the United States and Europe cloud Thai export forecasts. The research house raised its forecast for international tourists this year from 5.7 million to 7.4 million thanks to pent-up travel demand in Southeast Asia, India and Europe.
But hurdles remain in Thailand’s path to tapping into that demand, including inflation eroding travel budgets and limited airline capacity.
Phiphat said last week that he would propose to the cabinet to scrap the Thailand Pass, the last barrier to entry in the COVID era. The online pass only requires flight and accommodation details and a vaccination record, without the need for a negative COVID test.
“That’s another requirement that makes you less desirable as a destination,” Simmons said.