The international New Year often catches me by surprise. There are just too many things to do at year-end and not enough time to think about the New Year, let alone making a proper New Year's resolution. The Thai New Year, however, is a totally different story. With a long weekend and few social activities, I can usually plan better for myself and others.
This Songkran, my family and I managed to go together to Cha-am. Although the long weekend was relaxing, the town was also quite crowded and certainly looked much busier now than I remember. This part of Thailand _ Cha-am, Hua Hin and Pran Buri _ has become very popular with foreigners, especially retirees. I saw so many new condominiums being built.
The tourism industry is booming in Thailand. Since the start of the year, even despite the strong baht and disappointing global economic outlook, tourism has continued to do well. Foreign tourist arrivals reached 6.8 million in the first quarter, up by 19% year-on-year. The momentum is clearly continuing from last year, when foreign arrivals reached a record 22.3 million, a 16% increase. Last year, arrivals in Asia-Pacific, which led the global tourism growth, expanded by 7% compared with the worldwide average of 4%.
For the Thai economy, tourism revenue plays an increasingly important role. Tourism is our biggest service export sector, with a value of almost 1 trillion baht or 8.5% of gross domestic product. Tourism receipts, which accounted for only 48% of service revenue in 2005, today accounts for almost 70%. Last year, while goods exports grew by only 3.2%, service exports grew almost 20%, a lot of which came from tourism growth.
The Tourism Authority of Thailand modestly set the tourist arrival target at 24.5 million this year, about a 10% increase. Looking at the first-quarter outcome, I think the risk is on the upside and foreign tourists will likely hit 25 million without much difficulty.
Today, about 60% of foreign tourists are intra-regional, mostly from Asia and the Pacific. A notable increase in recent years has been Chinese tourists, who have surpassed Malaysians as the country's largest tourist group.
In fact, Chinese tourists have now become the top spenders worldwide. Due to rapid urbanisation, rising incomes and an appreciating currency, expenditures by Chinese tourists abroad have increased tremendously in recent years. In 2012, Chinese tourists spent a record US$102 billion on their international travels, up by 40% from 2011 and jumping to first place from third ahead of former top spender Germany and the US.
Among the world's top 10 by tourism expenditure, Russia recorded an increase of 32% last year to $43 billion, rising to fifth place from seventh. Russians now outnumber any other European nationality visiting Thailand and rank fourth overall, behind only Chinese, Malaysian and Japanese tourists.
Given the bullish outlook, the important question for Thailand's tourism industry today is probably not the lack of demand but how to sustain growth in the face of the country's infrastructure constraints.
In the tourism competitiveness rankings by the World Economic Forum, Thailand is seventh in Asia and 43rd worldwide, after Singapore (10th), Japan (14th), Hong Kong (15th), South Korea (25th), Taiwan (33rd) and Malaysia (34th). While rich natural resources, friendliness, strong government support and relatively good prices are key strengths for Thailand's tourism industry, several major weaknesses remain. Areas for improvement include environmental sustainability, health and hygiene, safety, ground transport, and airport density.
In the future, tourism will play an even more important role as Thailand's growth will likely become more service-oriented. The benefits of tourism are not limited only to hotels and travel agencies but spill over into other sectors such as entertainment, spas, golf clubs, restaurants, transport, hospitals and souvenir businesses.
For employment, tourism benefits the poor by creating jobs that are more labour-intensive compared with manufacturing activities, employing semi-skilled and part-time workers. It is estimated that tourism has generated direct and indirect employment for about 4 million people in Thailand or 10% of all people employed in 2012.
The costs of booming tourism are environmental degradation and congestion. So we should target upscale tourism and the meetings, incentives, conventions and exhibitions sector, which generate more revenue per head.
Given the benefits that tourism brings, this Songkran I was happy even though I had to compete with foreign tourists for a place at restaurants.
More travelling is good for us as individuals. It gives us a chance to meet people outside our old circle, giving us a new perspective on things. Travel can also be a perfect way to separate life stages, providing a break from our previous phase and giving us insight into a new one. Happy belated Songkran!
Dr Tientip Subhanij holds a PhD in economics from the University of Cambridge and pursues twin careers in banking and academia. She can be reached at tien201@yahoo.com