Tourism plays a crucial role in Thailand's economy, contributing greatly to the country's GDP. In a bid to stimulate post-pandemic expenditure, the government is gearing up to attract more luxury and high-spending travellers.
With a reputation for hospitality, abundant natural resources and top-tier attractions, Thailand is also witnessing a surge in the development of branded properties and luxury hotels.
According to the Tourism Authority of Thailand (TAT), luxury tourists have annual income of more than US$60,000 (2.05 million baht). Most of them are working-age, according to the authority.
A high-spending tourist is defined as spending more than 6,000-7,000 baht per day, compared with the average of 4,200 baht a day for a tourist visiting Thailand, or spending 120,000 baht for the whole trip. This group mostly comprises couples, families and LGBTQ visitors, according to the agency.
Siripakorn Cheawsamoot, TAT deputy governor for Europe, Africa, the Middle East and the Americas, said these two segments alone are estimated to contribute 40-50% of the 2 trillion baht in tourism revenue generated last year.
However, to remain competitive in the luxury travel market, the private sector wants the country to ease some obstacles and upgrade supply and infrastructure, which are persistent weaknesses.
Central Chidlom mall reopened after a 4-billion-baht revamp. Shopping is a popular activity among high-spending visitors.
OPPORTUNITY ARISES
This year Thailand has welcomed a large number of luxury travellers from the US and South America, who tend to stay for extended periods. Short-haul luxury markets include China, Australia and New Zealand, said Mr Siripakorn.
"The agency is promoting Thailand as an affordable luxury destination for foreign tourists, as we can offer exclusive travel experiences on a lower budget than other destinations, including top-tier hospitality, wellness, food, and local cultural experiences," he said.
Since the TAT started promoting premium restaurants through the Michelin Guide, more high-spending tourists now enjoy fine dining experiences with their families, said Mr Siripakorn.
"Many tourists have saved money for years and want to have special moments in Thailand," he said.
While many luxury visitors may choose premium stays at five-star properties every night, they also want to experience local quality food and sustainable activities, said Mr Siripakorn.
Recent trends show tourists are increasingly opting for operators or attractions with sustainable practices, aligning with the growing responsible tourism movement, he said.
Mr Siripakorn said he expects these segments to continue growing annually regardless of the global economy, as the industry observed the first wave to venture out following the pandemic was largely from affluent markets.
The TAT is partnering with US-based luxury travel advisor Virtuoso to attract premium tourists. The agency is also in talks to develop a new city guidebook with Louis Vuitton, aiming at the high-end European market, as the TAT participates in the International Luxury Travel Mart in France annually.
Wareerak Hot Spring and Wellness, a lodge in Krabi. Many tourists opt for wellness retreats.
LUCRATIVE SHOPPING
Piyawan Leelasompop, head of corporate marketing at Central Retail Corporation Plc (CRC), said Thailand stands a chance to become a luxury tourism hub in the region thanks to its world-class shopping malls.
CRC has observed consistent growth in luxury goods sales at major department stores. For example, despite a slow recovery in Chinese arrivals, Central Embassy reported strong luxury goods sales from the Middle Eastern market, as the mall offers a wider selection of brands than can be found in the Middle East.
During peak tourism seasons, Middle Eastern tourists travel to Thailand not only to visit attractions, but also to shop.
Malls in Thailand also attract high-spending customers from Cambodia, Laos, Myanmar and Vietnam, as these markets have fewer luxury shopping options at home, she said.
However, Thailand's performance in this segment still lags competitors Hong Kong and Singapore, which benefit from lower luxury import taxes. Ms Piyawan said the government should consider reducing this tax to attract more foreign tourists and encourage locals to purchase luxury products here, rather than travelling abroad.
As the Tourism and Sports Ministry targets 9 million Chinese arrivals next year, she said the return of this market would lift luxury sales as shoppers from the mainland were among the top customers before the pandemic.
Ms Piyawan said economic factors to monitor include Beijing's efforts to push domestic spending and projected US tariff hikes against Chinese imports, which might affect Chinese consumers.
The all-new Central Chidlom is fully opened after undergoing a 4-billion baht revamp.
WELLNESS BOOMING
Bill Barnett, managing director of C9 Hotelworks, a hospitality consultancy based in Phuket, said the potential of luxury travel in Thailand could grow by relying on the robust wellness industry.
In 2022, Thailand's wellness economy ranked 24th globally, with a total market value of 1.2 trillion baht, of which 22.4% derived from wellness tourism. Mr Barnett said wellness hotels generally charge higher room rates and book longer stays, attracting high-spending tourists.
Phuket has become a global wellness destination, focusing on longevity tourism by offering holistic health programmes for tourists, he said. The island is home to international hospitals, clinics, wellness centres and luxury wellness resorts, such as the planned Bumrungrad Hospital Phuket and Clinique La Prairie Wellness Resort.
The wellness trend in Thailand has evolved from the rise of Thai spas and massages in the 1990s to aesthetic and beauty treatments in the 2010s, according to a C9 Hotelworks report.
Krabi also has strong potential to accommodate luxury guests, with its beautiful natural attractions and branded luxury hotels offering exclusive experiences, said Chamnan Srisawat, president of the Tourism Council of Thailand.
Mr Chamnan, who is based in Krabi and owns five tourism businesses including boat tours, limousine service and destination management services, said the province is known for its hot springs, and many hotels now offer wellness retreats for guests. He said he invested in a new wellness centre in Krabi offering a spa and therapy programme to capitalise on the growing trend. The 15-rai property is expected to open by mid-2025.
In addition, 5-6 more yachts are expected to join the operator's fleet of 50 boats, which includes yachts, speedboats and long-tail boats, upgrading the service to a premium level, said Mr Chamnan.
The all-new Central Chidlom is fully opened after undergoing a 4-billion baht revamp.
LUXURY CHALLENGES
Mr Siripakorn said Thailand still needs to improve tourism infrastructure to enhance the luxury travel experience, including better safety, cleanliness, and third-language skills of workers.
"The public sector is not keeping up with tourist expectations, unlike the private sector, which is quicker to adapt and provide high-quality services," said Mr Chamnan.
He said private operators are ready to provide luxury services, such as private jets, premium vans, five-star hotels and shopping malls, aiming to accommodate global leaders and tourists.
However, many public facilities managed by the government and local authorities still do not meet expectations, such as toilets, rest areas, roads, transport and connectivity, said Mr Chamnan. Even boat piers at major tourist destinations in Thailand are not fully equipped to cater to tourists with special needs, he said.
Many Thai staff still lack foreign language skills and the ability to communicate effectively. Mr Chamnan cited Japan, which attracts many Thais thanks to its well-designed public facilities and impressive service mind.
Yatches at Koh Racha in Phuket.
A tourists at Koh Phi Phi Le, Krabi.
Wat Arun in Bangkok.
Thai Dessert, Mango sticky rice.
