Bank reconsiders China tally

September 30, 2016 by  
Filed under News, Thailand

BANGKOK, 30 September 2016: Kasikorn Research Centre says Thailand remains a top destination for Chinese travellers despite the zero dollar controversy.

The bank forecasts 9 million visits, this year, which is a million below the Ministry of Tourism and Sports’ forecast of 10 million trips this year.

The bank’s think-tank unit conducted a survey interviewing 400 Chinese travellers at Suvarnabhumi and Don Mueang airports, 15 August to 15 September, to assess market trends.

inside no 1According to the survey, Chinese travellers identified Thailand as their top travel destination in Asia due to its natural attractions, particularly beaches, followed by  entertainment, sports, food and shopping.

In addition, 41.1% of respondents said they would return to Thailand.

As for the government crackdown on so-called zero-dollar tours, the research centre said it would impact on the country’s tourism in the short-term.  Zero-dollar tourism has plagued the country for decades, and it prospers due to the participation of tour operators in both China and Thailand. This is often overlooked when projects are initiated to end the practice.  Officials usually place the entire blame on Chinese tour operators.

The crackdown targets tours that are costing less THB500 to 800 per person, per day, which is weill below cost. The minimum selling price is not supposed to fall below THB1,000 per person, per day.

It will probably cut the volume by around 300,000 trips, October to December, and the bank estimated the revenue loss at around THB8,500 million.

However, tourist revenue is estimated on an average spend per market based on exit survey and other financial data (credit card sales).  Zero- dollar tourists are spending on average THB500 to THB300 a day for land content which includes accommodation, airport transfers, breakfast and two half-sightseeing trips.  This compares with the average daily spend of THB2,500 a day calculated  for Asian markets.  The estimated loss in the zero-dollar tour sector could be less than the bank estimates if it based its assumptions on official average daily spend.

Private tour companies and guides make a killing on shopping and the sightseeing trips that are not included in the tour sold by their Chinese partners. This will include trips to Pattaya, a boat trip to the island, visits to attractions and restaurants. The earnings on commissions can be so high that they will handle Chinese groups without charging their Chinese partner for their services, hence the name zero-dollar tours. To keep costs down even further the local agent will contract a free bus from a gem stop and promise two stops per trip at the gem store’s outlets ( jewellery and handicraft shops).

The bank said: “The clampdown policy will impact on Chinese travellers who buy group tour packages during the National Day celebrations of the People’s Republic of China, known as the Golden Week (1 to 9 October)and not FIT travellers,” it said.

The centre projects that Thailand should attract 9.0 million Chinese travellers up 13.4% from 7.93 million visits in 2015.

Kasikorn Research Centre is a subsidiary company of Kasikorn Bank, which conducts tourism and business research mainly on Thailand’s economy including tourism with reliable recommendations and indicators on business prospects.

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