BANGKOK, 6 August 2017: For large-scale travel firms in Thailand’s inbound travel business the message in the numbers is far from reassuring, according to the latest data from the Association of Thai Travel Agents.
ATTA presents the most accurate data on guests handled by tour firms, through the monitoring of meet-and-greet service at Bangkok’s two gateway airports.
The running total for January to August, this year, indicates ATTA member companies handled 3,904,731 clients, compared with 4,122,817 in the same months last year. That’s a decline of 5.43% on a difference of 218,086 clients.
That might sound manageable at first glance, but the figures show that for the first five months of the year travel firms handled fewer clients that in 2016. The months closed in the red with black positive figures appearing on the ATTA chart only for June, July and August. But the positive trend, even if sustained in the final quarter, might still fall short of the 5,377,843 clients handled in 2016
The latest January to 31 August data appears to confirm that large travel firms, requiring a big monthly guest turnover, face a major challenge if they are not active players in Asia’s top markets.
The major markets that they should be tapping are Asian giants, China and India, followed by South Korea, Taiwan and Japan. But China with a whopping 51.66% market share of all visitors handled by travel agents suggests that companies seeking higher yield business have limited potential. Take the low-yield China slice out of the numbers and you have 1,603,136 clients sourced in other supply markets.
The long-term outlook in traditional markets such as Europe is worrisome for major tour companies and expansion into low-yield Asian markets might not be a tenable business option.
They are hampered by high operating costs, substantial payrolls, top heavy management, expensive office rentals and even the thought of laying off staff becomes an expensive exercise in the payout of severance and other benefits.
ATTA identifies the top 15 inbound markets for its slightly more 1,000 member companies.
China remains the top market despite suffering decline of 12% over the eight months. Tour companies handled 2,301,595 Chinese clients through the Bangkok gateways.
Fifth placed Russia should worry agents. Clients handled are down by 20% to 115,776 for the eight months of 2017.
Another traditionally strong market for agents, the UK in eighth place, has seen travel company related business drop by 15% down to 62,261 clients for the seven months.
There are some positive highlights. Germany has supplied more clients for ATTA member firms at 36,637, representing an improvement of 11.81%. France, too, improved by a handsome 21.3% delivering 30,665 clients.
In Asia, the markets to watch include India that delivered 166,066 clients, an increase of 20.8%, with a strong performance in events; weddings and incentives.
The brightest star was South Korea that grew by a whopping 71.7% (181,758 clients), definitely on the rebound for tour companies in Thailand.
Taiwan was no slouch either supplying 43,586 visits, an improvement of 17.9%.
The downside for the larger ATTA members remains yield, or more precisely the lack of it. Hemmed in by high costs, declines in yield, the constant haemorrhaging of bookings at the hands of competitive online sales channels and consumer trending that favours do-it-yourself holidays, tour companies find themselves fighting for survival, despite the massive increases in Thailand’s visitor arrivals.
ATTA does not monitor clients handled by its member companies at other international gateways such as Phuket. The data identifies the number of travel company clients who are given a meet-and-greet service, based on fees paid to the Airport of Thailand.
(Source: Association of Thai Travel Agents)