While the rest of Asia-Pacific countries, mainly Japan, Korea and Vietnam, expect strong growth in Chinese tourist arrivals in the third quarter of this year, Thailand has been struggling to bring back Chinese tourists since the boat tragedy in Phuket.
Chinese tourist arrivals to the country fell by 230,000, or 8.8% year-on-year, in the third quarter, compared to the same period last year.
According to the latest data available from each Asia-Pacific country's tourism organisation, Japan reported a year-on-year increase in Chinese tourist arrivals of 12.6% in July and 4.9% in August, while South Korea displayed signs of healthy recovery from the political fallout between the two countries with a year-on-year increase of 45.9% in July and 40.9% in August. Closer to Thailand, Vietnam showed an average growth rate of 21.6% year-on-year in Chinese tourist arrivals in the third quarter.
The figures show that Chinese tourists did not stop travelling to Thailand because of a weaker Chinese economy but are travelling and spending elsewhere.
The depreciation of the yuan against the baht is not helping us either since it means Thailand has become more expensive for Chinese holidaymakers. From January to October this year, the yuan depreciated by over 6% against the baht and by almost 20% from 2015.
Total international tourist arrivals to Thailand for this quarter, according to Ministry of Tourism and Sports, grew by 3% year-on-year despite a 9% drop in Chinese tourists. This is mainly due to a remarkable 40% increase in Malaysian tourists year-on-year during Malaysia's Aug 31 Independence Day.
CBRE Research believes that a large number of Malaysians came by car through the southern border during the period, which does not significantly benefit the overall Thailand tourism and hospitality industries.
In any case, the number of international tourist arrivals for October has not been released and Thailand may have benefitted from the Chinese Golden Week.
However, the increase might not be as favourable as Thailand had hoped. Ctrip, China's biggest travel booking website, has reported that Japan, for the first time, has surpassed Thailand as the top destination during the Chinese Golden Week.
The Tourism Authority of Thailand (TAT) is launching security measures to restore confidence among Chinese tourists, while the Association of Thai Travel Agents (ATTA) is urging the government to take serious action to win back the Chinese market such as issuing multiple-entry visas or waiving the visa fee for Chinese tourists.
The drop in Chinese arrivals is a problem as hotel supply in Bangkok and major resort areas continues to grow and tourism is a significant contributor to Thailand's gross domestic product.
Many people have focused on arrival numbers, but quality is as important as quantity. Given infrastructure bottlenecks and overcrowding at the most popular tourist sites, the policy needs to focus as much on getting tourists to spend more as on increasing the overall numbers.
The government has clamped down on zero-dollar tours but it is very much up to hotel managers and owners to promote quality and for the government to continue the work on protecting and preserving the environment of key attractions.
Rathawat Kuvijitrsuwan is a manager at Research and Consulting, CBRE Thailand. He can be reached at bangkok@cbre.co.th, Facebook: CBREThailand, LinkedIn: CBRE Thailand, LINE: @CBRE Thailand, Twitter: @CBREThailand and website: www.cbre.co.th