Staying ahead of regional rivals

Shortly after taking office, Tourism and Sport Minister Weerasak Kohsurat made a bold commitment that 2008 would be the year of Thai tourism and 2009 the year of investment in the tourism industry.

He also raised the tourism revenue target for this year to surpass one trillion baht with 800 billion from foreign visitors.

Previously, the Tourism Authority of Thailand (TAT) projected revenue from foreign visitors would hit 600 billion baht, with domestic tourists contributing 385 billion.

In 2007, Thailand welcomed 14.46 million foreign visitors, registering 4.65% growth over 2006. This year, the country expects almost 16 million international visitors, up 6% over 2007.

The minister also drafted a four-year plan starting this year to increase tourism revenue, and pledged to invest up to 6.5 billion baht in new projects.

The new projects cover the four key regions of the country and include hot springs, Lanna northern traditional culture, eco-tourism in the North, riverside tourism in the central region, and development of the Gulf of Thailand coast in the South.

Plans are also afoot to develop new tourism routes along the Mekong River, dinosaur fossils and cultural tourism in the Northeast, as well as jewellery and agricultural tourism in the East.

According to Mr Weerasak, 21 provinces have the potential of becoming world-class destinations, with Bangkok, Phuket, Chiang Mai, Chiang Rai and Chon Buri earmarked as the highest-growth areas.

Others include Rayong, Phangnga, Prachuap Khiri Khan, Surat Thani, Songkhla, Krabi, Kanchanaburi and Trat.

However, only two projects - the Royal Coast and Chiang Mai convention and exhibition centre - are likely to get off the ground this year.

Formerly called the Thailand Riviera, the Royal Coast development plan calls for an investment of 31 billion baht, 10 billion of which would come from public funds for infrastructure development, and 21 billion from private investment.

First initiated in 2005, the Royal Coast project aims to make the upper South an internationally renowned destination.

The project involves four provinces - Phetchaburi, Prachuap Khiri Khan, Chumphon, and Ranong - with great potential for further tourism development. The 400-kilometre-long coastal area already has good basic facilities, especially road, rail and air links. The four provinces have diverse and famous attractions, such as historical and cultural sites, national parks, beaches and hot springs.

Clear water, fine sand and magnificent views attract nature lovers to Koh Chan, a quick boat ride from Prachuap Khiri Khan.

They would also be linked to eastern coastal tourist sites, such as Pattaya, Sattahip and Rayong.

Under the original 2007-11 timeframe, Phetchaburi would be turned into a centre for historical and cultural tourism. Prachuap Khiri Khan and Chumphon would be developed for natural attractions, while Ranong would be a health tourism centre.

According to a TAT study, the project would quadruple the number of Thai tourists to the four provinces to 20 million in 2011 from 5.4 million in 2004; and foreign visitors to three million from 661,017.

In the meantime, construction of the Chiang Mai convention centre is likely to start this year. It was initiated by former premier Thaksin Shinawatra and is located on a 400-rai site in Muang District with an investment of 1.4 billion baht.

On the marketing front, the TAT is flexing its muscle to tap India and China, starting with the opening of new offices in Mumbai, Shanghai and Kunming.

The TAT's only Indian office now is in New Delhi, which it has operated since 2003. It opened a marketing representative office in Mumbai last November, while in China, it has only one office in Beijing.

Thailand is the second most popular Asian destination among Indians.

Last year, 536,356 Indians visited Thailand, second only to Singapore, which attracted 749,000. hailand was the third most popular destination for Indian tourists after Singapore and the United States.

This year, the TAT aims to draw at least 600,000 Indian tourists, with the number expected to reach 667,000 next year and 728,000 in 2010.

For China, the focus is on affluent urban Chinese. About one million Chinese visited Thailand in 2007, down 2.9% from 2006. The TAT expects the number to grow by 10% to 1.3 million this year.

However, growing anti-government demonstrations could threaten tourism growth, concedes TAT governor Phornsiri Manoharn, especially among Japanese and other Asians who are more sensitive to political and social instability than their western peers.

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Protests put a damper on progress

CHATRUDEE THEPARAT

Investors are threatening to suspend or cancel tourism projects if the government does not address anti-government protests and address political instability.

"I don't think there would be any investors who are willing to invest in tourism projects such as Royal Coast or other tourism development projects if the leader of the administration fails to create a investment climate," said Apichart Sankary, the president to the Association of Thai Travel Agents. "The government needs to try harder to make peace and restore investors' confidence.

"Prime Minister Samak Sundaravej should send a message to the public in a peaceful and compromising manner, instead of stirring up more [discontent]."

Mr Apichart said that new tourism development projects would be stalled for at least seven months because of political instability and continued rising oil prices.

"The ongoing anti-government demonstrations will affect the Thai tourism industry in the long term, even though there has been no violence yet ... news of the unrest has already undermined tourists' confidence in safety," he said.

He said more visitors might cancel their trips to Thailand and head to other countries if the problems drag on.

According to Mr Apichart, some groups of Malaysian and Singaporean tourists had already cancelled their trips while Japanese and European groups were monitoring the situation.

This year should have been a banner year for Thai tourism, he said, as the first five months showed signs of improvement. The number of visitors from Russia and Scandinavia had increased by 4%, which could help offset fewer Asian arrivals, which are more sensitive to personal safety.

Mr Apichart shrugged off mounting concerns about surging oil prices, saying that other countries had shared the same effects. Visitors, especially from Europe, could still afford their trips as long as costs increased by no more than 10%, in his view.

Thailand remains a better choice for tourism because it has many attractive locations, he said. Even though travel costs would be higher, many visitors said that food and lodging was still reasonably priced.

"The government has designated 2008-09 as the year of tourism and investment in the tourism industry. I don't think any investor dares invest in a tourism project if the leader and his administration fail to create a good climate for investment," he said.

Anake Srishevachart, president of the Thai-Japan Tourist Association, said high oil prices would indeed take a toll on visitors, especially on long-haul routes such as Europe.

In some cases, the cost of flying has almost doubled because of huge airline fuel surcharges. The industry thus needed to adjust its strategy to focus more on short-haul travellers, he said.