Calculating zero-dollar tour costs

Calculating zero-dollar tour costs

The consequences of cheap Chinese tour packages aren't only monetary, as issues related to safety may put far more than Thailand's reputation as a tourism hotspot on the line. By Suchat Sritama

Chinese tourists head to the Temple of the Emerald Buddha in Bangkok. A trade group says many uncertified tour companies in mainland China are still offering ultra-low prices for Thailand packages. PATIPAT JANTHONG
Chinese tourists head to the Temple of the Emerald Buddha in Bangkok. A trade group says many uncertified tour companies in mainland China are still offering ultra-low prices for Thailand packages. PATIPAT JANTHONG

Who will be the biggest winner in the government's decision to stamp out so-called zero-dollar tours in late 2016: businesses, the government or tourists?

The story of extremely cheap Chinese tour packages has made many in the Land of Smiles frown. The proliferation of these packages has created undesirable ripples in the Thai hospitality industry, key tourism organisations involved in the Chinese market said last week.

Yet Thailand remains one of the world's top 10 global destinations, welcoming about 34 million tourists last year. Chinese visitors represent a big part of that total.

Last year, Thailand received 8.7 million Chinese tourists, a 10.3% increase from 2015. From January to May this year, 3.94 million Chinese tourists came to Thailand, generating 201.1 billion baht in income.

In turn, 637,386 Thai people travelled to China in 2016, a 22.7% increase from 2015.

Currently, 60% of Chinese tourists are free independent travellers (FITs). Online bookings from the FIT segment are soon expected to reach 70%.

But Chart Chantanaprayura, president of the Professional Tourist Guide Association of Thailand, said many uncertified tour companies in mainland China are still offering ultra-low prices for Thailand packages.

For example, he said an online package of 3-4 days is priced at 699-799 yuan (3,500-4,000 baht) per person -- about half the minimum rate the China National Tourism Administration (CNTA) set earlier after signing an agreement with the Tourism Authority of Thailand (TAT).

The military government moved to crack down on underpriced Chinese packages in October last year. It also embarked on efforts to stamp out illegal businesses and non-registered tourist guides working with Chinese tourists.

The CNTA and Thai tourism authority agreed that certified tour operators must charge a minimum of 1,000 baht per person per day in Thailand. They also agreed that an additional 3,000 baht must be charged for optional tours, which means three- or four-day packages should begin at approximately 6,000 baht.

On June 16, Deputy Prime Minister Tanasak Patimapragorn met with Wang Xiaofeng, vice-chairman of CNTA, members of the Chinese Tourist Police and the consul-general of China to further discuss bilateral coordination between the regulatory bodies.

While the number of cheap Chinese packages has dropped since the crackdown, the goal has not really been achieved, Mr Chart said. For example, there have been several cases of tour companies abandoning groups of Chinese tourists in Pattaya and Phuket over the last several months.

"The zero-dollar tour scheme is a big issue calling for a special plan," he said. "Government and law enforcement alone may not work. What is needed is a coordinated effort from all stakeholders: Hotels, tour companies and local authorities."

Zero-dollar packages and high-pressure tactics

The Professional Tourist Guide Association of Thailand said cheap package users are often forced to go to jewellery shops, pay for some meals or shell out for optional tours like entertainment shows. Tourists who refuse to pay may be forced out of a bus at night or made to wait in the hotel lobby until morning.

"Since many Chinese are unable to communicate in either English or Thai, they can't file complaints or deal with the problem," Mr Chart said. "Eventually, these tourists feel dissatisfied with their visits to Thailand, raising the issue with Chinese authorities when returning home."

Tour operators that use non-registered Chinese speaking tourists can easily force their customers to buy optional tours. They often also get kickbacks from shops they bring tourist groups to, he said.

Chinese investors have opened shops in every major touristic city, with some controlling hundreds of buses. Earlier this year, one giant zero-dollar operator with 8,000 buses was raided.

Mr Chart said the remaining zero-dollar tours may cost the Thai economy close to 30 million baht per day. That money will largely end up in Chinese pockets through the sale of optional tours, inflated food and accommodation prices and purchases at Chinese-owned shops.

Adith Chairattananon, managing director of Golden Discovery Express, a major tour operator in Bangkok, said more and more registered guides are losing their jobs to illegal guides. Most of the 40,000 registered guides in the market are jobless.

"People say Thailand does not have enough Chinese speaking registered tourist guides," Mr Adith said. "This is not true. The problem is that professional guides are not employed by travel companies serving the Chinese market."

Counting the costs

The impact of cheap and zero-dollar tours is not merely economic. Thailand's image is also on the line. Recent issues surrounding diving activities are a case in point.

A tour guide said many Chinese tourists almost died in the Gulf of Thailand because they rushed to dive shortly after their plane landed.

The guide said tourist flying for more than 4-5 hours should not go diving or swimming within 24 hours of landing, since their bodies need time to adjust to pressure conditions. Nevertheless, many flights from China land in Thailand late at night, and their passengers head to the beach the following morning.

To reduce diving injuries, the Professional Tourist Guide Association of Thailand strongly recommends individuals involved in the Chinese market (1) ask the government to continue its crackdown of illegal tourism businesses, (2) eliminate or reduce zero-dollar tours, and (3) adjust tour packages' diving programmes.

Tourists are also advised to aid in the implementation of these restrictions and drive non-registered tour guide out of the market.

Government urged to enhance competitiveness

Ittirit Kinglake, president of the Tourism Council of Thailand (TCT), said the government must solve, not prolong, these problems if Thailand is to remain a competitive international tourism destination.

TCT's recommendations for the government include improving transportation and infrastructure, implementing measures to protect tourists from accidents and crime, and providing tourists with real-time information.

Mr Ittirit said TCT also recommends that representatives from the private sector join government staff in tourism meetings and tourism committees in order to help shape laws and regulations regarding the tourism industry.



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