BANGKOK, 21 October 2016: Association of Thai Travel Agents says the country tour operators dealing with the China market should adjust their business model and offer tours that comply with government policy and its crackdown on zero-dollar tours in the Chinese market.
Speaking at the association monthly meeting, last Thursday, ATTA vice president Surawat Akaraworamat said the Committee of Tourism Business and Guide has recently issued a regulation of a minimum standard daily cost of a package at THB1,000 for Chinese tour groups.
“The announcement sets the minimum standard daily cost of a package for Chinese tour groups should not be below THB1,000 per person per night…however, it didn’t specify what the daily cost should include. It just informs that the minimum price should not go below the issue rate.”
Usually tour operators include hotel, breakfast and two half-day sightseeing tours. There are about 300 ATTA member agencies dealing with the China and if each one was questioned not a single one would admit to being in the zero-dollar tour trade.
According to the new regulation, tour operators have to complete a service rate document in the Thai language . The tourism law regulations stipulate that every tour itinerary has to be filled with the Department of Tourism clearing identifying all details of the day’s tour, the price and the guide assigned to the group.
In addition, the optional tour price for Chinese tour groups will not exceed THB3,000 per person per trip, he said.
Even at THB3,000 per trip (three days) the cost is ridiculously cheap. A hotel on average charges THB1,000 a night which would exhaust the budget without taking into account tours and transfers.
Tour operators in the China market say the crackdown is hurting the country by reducing tourist arrivals, however, these kind of groups are not benefitting the country revenue wise.
Most of the hotels used are linked to the Chinese tour operator, all the business is cash driven so there are no tax payments and the local tour operator is paying his Chinese tour partner to handle the group. Their revenue is earned from cash commissions paid by attractions, boat operators, restaurants and shops.
The cash commissions are collected by the local agent on all items except the basis package details sold to the Chinese customer by the Chinese tour operator.
He shares it with guides and pays cash for additional hotels stays not included in the basic itinerary from commissions earned from shops and service providers.
The government hopes that the regulation that requires every travel agent to forward to the Department of Tourism a daily itinerary for every group, or FIT transaction, will identify the culprits dealing zero-dollar tourism as it will show the itinerary is outside of the advertised package. If they fail to file the itinerary they could face a fine and suspension.
“Thai tour operators therefore should adjust themselves to do business according to the regulation,” the association secretary Adith Chairattananon suggested.
He said: “Tour operators would need around two to three months to adjust as there are details that have to be studied carefully..the government should have a long-term measure to handle the situation and tighten the service standard.”
He added the government crackdown on zero-dollar tour and setting minimum tour package price measures will help to spread Chinese tourists to secondary destinations.
Up to 10 October, 2.88 million Chinese travellers booked trips with the association’s members increasing 22.93% over the same period last year. A substantial part of that business would be termed zero-dollar tourism.
For the minimum standard daily cost for Chinese group tours announcement visit www.tourism.go.th/home/details/6/125/26633 (in Thai).
For the optional tour price announcement visit www.tourism.go.th/home/details/6/125/26640 (in Thai).