CHIANG RAI, 30 October 2018: Proposals on how to win back Chinese tourists are flying like paper in the wind if you listen to Thailand’s Deputy Prime Minister, Somkid Jatusripitak.
They rise and fall on the currents and whims of popular opinion expressed mainly by Thailand’s travel trade associations such as the Association of Thai Travel Agents.
Of course, ATTA has an agenda. It has to convince trade members that it is fighting from their corner.
But the only meaningful trend detected so far is that with the changing winds, paper proposals are flying in and out of favour by the day, aided by a flurry of contradictory reports in local media. To his credit, the Deputy PM’s persistent call for packages and incentives will probably succeed even if the gloomy forecasts are exaggerated.
That’s because there is a sliding rule mechanism on tourist-related data that attempts to measure the loss while moving the goalposts.
ATTA agents move the estimated loss of Chinese tourists along the calendar to suit its own agenda. Just a few months back it was saying Thailand would lose 1 million Chinese tourists by the time the peak season kicked in this October. Now it is saying the 1 million loss has a time frame from November to March 2019. So by the end of the first quarter of 2019, Chinese visits will have plummeted by 1 million when compared with the same months of 2017 and 2018. These wild predictions are supposedly based on advance bookings, but as ATTA members handle at most 5 million tourists a year it is hardly representative of the other 30 million tourists who book their own travel arrangements.
There’s no doubt that Chinese tourists are giving Thailand a miss, but the calculation on the actual loss could be muddled. Over the first nine months of 2018, the official count of Chinese tourist arrivals reached 8.3 million up 13.38%. By year-end arrivals will comfortably reach 9.8 million, about the same as 2017. Unfortunately, the travel industry was hoping for 10.8 million this year and that would be a stretch.
Between the Ministry of Tourism and Sports and ATTA’s data, which is limited to arrivals at Bangkok’s two airport gateways, there is evidence of a decline, post July through to 20 October, but at the close of play on 31 December 2018, Thailand will have hosted close to 10 million Chinese tourists and the year will close with 38.5 million tourist arrivals.
So why are we in panic mode? Thailand needs to cool down the China market to restore quality content and build confidence in safety and services. Take it as a gift from heaven, a breathing space to improve the product.
And if ATTA agents are losing bookings it is not entirely because of the Chinese problem. Their own figures show that member agencies are losing business from Russia down by 16.41% and the negative trend is now in its second year. Agents have seen their bookings from the Middle East drop by 46.39% during the first nine months of 2018.
Yes, China dropped 3.42% for ATTA agents over the three-quarters of 2018 and it represents more than 50% of all the bookings handled by Thailand’s ATTA agents at the two Bangkok airports. so a hiccup in the business flow from China raises an alarm.
But the alarm bells have been ringing over declines in the Russian and Middle East markets for two years, while everyone was happily preoccupied with the Chinese boom without a thought for the old proverbs – eggs in one basket.
The Deputy PM’s proposals cover three areas. One calls for the travel trade to cooperate with Thai Airways International to sell discounted tours beyond the airline’s gateways, Bangkok, Chiang Mai and Phuket. It is based on long-haul travellers, buying an airfare and hotel package to a gateway destination and tacking on a trip to a secondary destination that makes the short domestic flight sector virtually free. This technique worked in the good old days when THAI flew to around 12 destinations in Thailand beyond its gateways. Today, more than 50% of Thailand’s holidaymakers are short-haul travellers who fly low-cost airlines from cities in Asia. To work, the scheme would need to recruit support from Thai AirAsia, Thai Lion Air, Vietjet, Nok Air and Bangkok Airways rather than limiting it to just the national airline and its subsidiary Thai Smile.
Tax deductions on jewellery were floated as an incentive to impress Chinese tourists, without a mention of the massive profit margins on jewellery and the kick-back commissions that go into the pockets of travel agencies handling the China market. Jewellery shops need to take the lead to reduce prices and commissions rather than ask for tax cuts from government.
Finally a waiver of the THB2,000 visa-on-arrival fee is on and off the table depending who is being interviewed, but it appears the Deputy PM has gained considerable traction on this topic and it might garner enough support from the Cabinet to sail into reality by mid November.
But again why give new life to a visa scheme that is so costly to manage and takes up far too much space at already overcrowded airports. The immigration checks are hurried and if travellers are rejected they have to fly back home from the airport rejected and venting their fury on social media.
In the long-term, Thailand should offer the 21 countries that are eligible for a visa-on-arrival an eVisa service paid in advance by credit card. An eVisa gives immigration officials an opportunity to screen travellers in advance, before they leave their home country.
It is also trendy for do-it-yourself travellers who enjoy organising a holiday without travel agency input. Once they have completed their visa online and gained their barcode approval they move on to book flights and hotels. It’s part of the travel experience, while queuing for hours at an airport’s visa-on-arrival zone is definitely not. Waiving the THB2,000 fee is not an incentive either. The real incentive would be to remove the Visa-on Arrival pain point entirely, right at the outset in the airport, when travellers are weary and feeling vulnerable and replace it with a user-friendly online eVisa that keeps travellers happy, while satisfying the requirements of the immigration bureau.