Chinese tourists plunge after scam crackdown

Tourism crisis & three Thai airlines face bankruptcy after Chinese tourists plunge by half.

TOURISM, AIRLINES & SCAMS 

Tourism crisis: Plunge in Chinese tourists after scam crackdown

21/11/2016

Amornrat Mahitthirook

The number of tourists from China to Thailand has fallen significantly after the government launched a major crackdown on so-called zero-dollar tour scams in September.

As a result of the crackdown, three Thai registered airlines are experiencing a financial crunch after their operations were severely affected by a sharp drop in Chinese tourists.

ZERO DOLLAR TOURISM CRACKDOWN

Zero-dollar tours involve Chinese tourists paying low prices for tour packages but once in Thailand, they are pressured into buying overpriced food, accommodation and gifts.

In September, authorities raided the tourism company OA Transport Co and seized its 2,150 tour buses and confiscated 4.7 billion baht from its bank accounts and those of its affiliates.

The company, which was the main bus provider for Chinese tourists, is accused of illegally conducting businesses in connection with zero-dollar tour scams. Company executives have denied the allegation.

CHINESE TICKET CANCELLATIONS, DROP IN ARRIVALS

Tour agencies have cried foul, saying about 70% of tour groups from China are said to have cancelled their trips following the crackdown.

Critics, however, say the crackdown is not the sole cause of the drop in Chinese tourists.

The number of Chinese tourists entering Thailand per day via the airport did drop to 4,000 from 13,000 in August, according to Suvarnabhumi Airport general manager Sirote Duangratana.

AIRLINE PROBLEMS QUICKLY FOLLOWED

Revenues for the airlines fell sharply following the government's crackdown.

The three airlines operate flights to international destinations mainly in China.

The airlines faced liquidity problems and were unable to pay their debts including fuel costs and other expenses at airports overseas.

IMPORTANCE OF CHINESE TOURISM MARKET 

China's tourism market has great potential with 100 million Chinese people travelling abroad every year and many countries want to lure them to visit their destinations.

Chinese tourists are very important as they represent 30% of total foreign tourist arrivals in Thailand.

Last year, Thailand welcomed nearly 30 million foreign tourists and the figure is expected to increase to 33.8 million this year.

TOURISM INDUSTRY RESPONSE

The Association of Thai Travel Agents (ATTA) president Charoen Wangananont admitted that Chinese tourist arrivals have dipped by more than half after the crackdown.

"The declining number of Chinese tourists is not solely due to the zero-dollar tour crackdown but from other factors such as the weak Chinese economy and the mourning atmosphere after the passing of His Majesty the King that has made many festivals less lively and fun," Mr Charoen said.

Representatives from the Thai Hotels Association and the Thai-Chinese Business Association will meet this week to discuss the zero-dollar tour issue and plan to submit a formal letter to Prime Minister Prayut Chan-o-cha, requesting immediate help for the industry.

GOVERNMENT RESPONSE TO CRISIS 

The Civil Aviation Authority of Thailand (CAAT) ordered the three airlines experiencing problems to devise financial rehabilitation plans, work on solutions to their financial problems and submit their plans to the agency this month, CAAT director Chula Sukmanop said.

If the airline operators fail to meet the deadline, they could face tough measures including a suspension of their service, Mr Chula said. He declined to name the airlines.

Sports and Tourism Minister Kobkarn Wattanavrangkul said she will call a meeting of operators concerning Chinese tour businesses this week to discuss their problems and government policy. 

Ms Kobkarn remains confident that the number of Chinese tourists this year will reach 9.2 million, compared to 7.9 million last year.

http://www.bangkokpost.com/news/general/1140281/three-thai-airlines-face-caat-clampdown

http://www.bangkokpost.com/business/news/1141381/help-plea-as-zero-dollar-crackdown-hurts

About the author

columnist
Writer: Jon Fernquest
Position: Online Writer