What a week that was: Trophies and dollars

October 5, 2016 by  
Filed under Travel Logs, TRAVEL TALK

BANGKOK, 5 October 2016: When Mastercard confirmed Bangkok as the world’s leading tourist destination, who was surprised?

It outshone London by close to 2 million visits clocking up 21.47 million tourist arrivals. But does last week’s revelation tell the whole story of Thailand’s journey to tourism success? Probably not.

Achieving the number one spot was simple arithmetic courtesy of the Immigration Bureau’s head count at the city’s two international airport.

inside no 1The tally counter clicked for every foreigner passing through the passport checkpoints and with a little forecasting based on trends from the past, Mastercard has an outright winner for 2016. It’s something akin to being 20 points ahead three quarters way through the football season. The trophy is yours; season done and dusted.

Other important metrics, such as gross travel spend and length of stay, are not trophy winners for Bangkok.

It’s home to the some of the cheapest hotel rates across the region’s capital cities, street food is as cheap as the mucky streets it is served on, but shines as a fashion statement. An evening on the town costs a fraction of the financial damage inflicted in Hong Kong, Tokyo and Singapore.

Perhaps Bangkok’s bargains kept the spend metrics down at Mastercard, allowing Dubai to sneak into the number one slot for the first time with annual gross revenue of USD31.30 billion. It was followed by the grand capitols of splurge, London and New York. Even if your dollar goes further in Bangkok the overall spend on a volume of 21 million visits secured a fourth place with USD14.84 billion, just ahead of Paris.

This year’s 33 million tourist arrivals, compared with just short of 30 million in 2015, will push the country into the mega league, but still some distance off France, Spain and the US.

Spend calculations are a different ball game. They are based on huge leaps of faith. First you have to believe that people who participated in the exit surveys told the truth. Then the samplings are often too small, or not conducted often enough to capture changes in spending trends.

Usually, first-year university students pose the questions. Once you have finished exaggerating your spending power they thank you and give you a cheap ball pen as a keepsake. If you smile they give you two.

The average daily spend is a figure estimated by government departments. Average days in the country are multiplied by the average daily spend and multiplied one more time by 33 million tourist arrivals. Now that’s what I call a ballpark figure. Yet, government officials and the PR troupe who bow and scrape in their wake declare the score without a hint of irony.

I wager the head count trophy was not the best news for the Minister of Tourism and Sports, Kobkarn Wattanavrangkul, who enthusiastically preaches the gospel of quality tourism. The current policy is to trade down on head counts and talk revenue and time spent soaking up the Thailand experience.

She speaks from the heart and says head counts are not a priority. Delivering quality and a safe environment to host tourists are her pet themes. Good on her, too, for stepping to the plate and calling for change, teamwork and transparency.

So instead of head counts let’s talk tourism dollars.

One third of  arrivals will be Chinese visitors and we know that around 46% of them travel on what are graphically called zero-dollar tours. It’s a catch-all phrase for trips that cost next to nothing when you book them and end up with your friendly travel agent in Thailand (in partnership with your friendly Chinese tour operator) robbing you blind of all the cash you brought with you. Some have got it down to a fine art. They deduct sightseeing tours from your credit card using a mobile phone app. Every time it pings you are one more step to being well and truly broke when your return home.

I am told some of the deductions that ping on the app are in the region of THB5,000 for what is called a ‘Russian Show’, a cabaret that is popular with Chinese that costs everyone else including the Russians just THB500. I fear an identical repertoire sold to Russian tourists might be called the ‘Chinese Show’.

A visit to a temple costs the traveller THB1,000 instead of THB100 and so the almost endless list of rip-offs unfolds.

All this gives travel agents a steady flow of kickbacks and under the table commission tax-free. I am told by a reliable travel agency source that there are close to 300 registered travel agents dealing exclusively in the China market. Do they all dabble in  the zero dollar game  and still remain official and registered with the Ministry of Tourism and Sports?  They probably do as no one is convinced that their commission-based business model contravenes the law.

Zero-dollar tours from China this year could account for 4.6 million of the 10 million tourists expected to visit by year-end. According to the government, the estimated revenue from kickbacks and commission is a handsome THB350 billion, all tax-free.

Some hard-nosed travel agents are probably convinced that they are not doing anything illegal. It is not even clear if the country’s tourism law has a ruling on the practice.  Perhaps this explains why the authorities have carried out numerous crack downs on bus companies, shops and gem stores that paid kickbacks, while leaving travel agencies are free to continue feeding on the green pastures of China’s outbound travel sector?

But eventually the sheer size of the  China market and the massive revenue that the government is missing in tax will spell the end of zero-dollar tours.

Comments

2 Responses to “What a week that was: Trophies and dollars”
  1. Those are interesting points and hints which both the Thai tourism public and private sector must take note for serious consideration. It is important to reduce income loss from international tourism. We have to prevent the leakage as much as possible and develop tourist expenditure surveys that are more reliable. We even don’t know whether ones who work in the Thai tourism public sector ever read TTR or not and if they read it we also don’t know whether they take some points to improve their work or not.