Operators must focus on niche markets

Operators must focus on niche markets

Tourists are seen checking their flights' status at Suvarnabhumi airport amid the Covid-19 pandemic on March 21 this year. Arnun Chonmahatrakool
Tourists are seen checking their flights' status at Suvarnabhumi airport amid the Covid-19 pandemic on March 21 this year. Arnun Chonmahatrakool

Higher spending free independent travellers (FITs) should be the key focus of the country's new tourism strategy as they are expected to contribute to rising GDP in the post-pandemic era, according to a joint study by the Bank of Thailand (BoT) and Visa International (Thailand).

The study suggests that Thailand's tourism industry should shift towards the new strategy.

The BoT estimated that under the old scenario, foreign tourist arrivals in 2024 would number 40 million with spending per trip per traveller of 48,000 baht, generating 1.9 trillion baht, BoT economist Nichaphat Surawattananon said at a seminar, 'Revitalising Thailand's tourism sector: In search of enablers for future sustainability', co-hosted by the BoT and Visa on Monday.

Under the first new scenario, arrivals would be 32 million in 2024 with spending per head per trip of 60,000 baht, also contributing income of 1.9 trillion baht.

Under the second new scenario arrivals would also be 32 million while spending per head per trip would be 70,000 baht, and income would increase to 2.2 trillion baht and contribute 2.7% to GDP.

"Focusing on income rather than arrival numbers, we can achieve the same level of income with 20% fewer foreign tourists, meanwhile boosting 10,000 baht more per person with the new strategy leading to GDP gains of 2.7%," she said.

With the new tourism strategy and focusing on FITs, Thailand should concentrate on niche markets with higher spending, especially medical tourism, health tourism and outdoor activities.

On average, spending per head per trip by group tours is around 38,687 baht compared with 51,083 baht of FITs.

The recent survey found that foreign travellers want to avoid crowded areas as a safeguard from the contagion. As a result, Thailand should continue to promote second-tier provinces and this approach would also help distribute tourism income as well.

For the post-Covid period, green tourism and digital tourism would also be key trends. Therefore, both the government and business operators should pay more attention to such factors to recover and sustain Thailand's tourism sector in the long run.

"Both the government and the private sector should cooperate to build up the tourism ecosystem through the digital platform. The existing TAGTHAi app is an initiative and it would be developed to a full-range ecosystem responding to tourists' demand in the digital era and the post-Covid period," Ms Nichaphat said.

SIZE DOES MATTER

"Tourism patterns have shifted from tour groups to independent travel, with the share of group tours decreasing from 80-90% to 50% and reaching only 30% in the next five years," said Vichit Prakobgosol, vice-president of the Tourism Council of Thailand (TCT).

Mr Vichit said independent tourists will generate more income as they prefer off-the-beaten track provinces to major destinations, which will help create more balanced income between second-tier provinces and popular destinations.

Meanwhile, operators and the government have to find solutions to balance income from the international and domestic markets as Thailand still saw the foreign market dominate in the pre-Covid era.

He said Thailand still has to rely on large-scale tourism to recover this sector because the supply has been made to serve 40-50 million visitors.

If the number of tourists is insufficent, there will be intense price wars which will affect revenue, he said.

The TCT estimated the number of international arrivals next year can bounce back to 60% of the 2019 level with around 20-25 million visitors, generating 1.55 trillion baht, based on the assumption that 70% of the population is vaccinated.

Chayawadee Chai-Anant, senior director of the economic and policy department at the central bank, said the outbreak forced the industry to face new megatrends, particularly digitalisation to meet new demand for safe and convenient travel via online platforms.

Digitalisation will be a key tool to combine fragmented platforms, such as TAGTHAi, a local tourism app, with Mor Chana, a Covid-19 contact-tracing app and payment platform, with support from the government.

Payment platforms can be used to support the use of cryptocurrency among travellers or convert credit card payments into tokens.

However, the government has to roll out a precise tourism action plan and establish a national agenda to let operators adjust to the new initiative, and set up an integration committee to effectively drive the plan.

Wirot Tanarak, deputy secretary-general of the National Economic and Social Development Council (NESDC), said tourism has to balance economic, social and environmental aspects to serve those changes globally.

The NESDC is currently revising the 13th National Economic and Social Development Plan from 2023 to 2027, to stimulate tourism spending and extend the length of stay as well as distributing more tourism income to communities.

Do you like the content of this article?
COMMENT (6)