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China hiccup extends to October

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BANGKOK, 22 November 2018: Despite warnings of landslide losses Thailand’s Ministry of Tourism and Sports reported Wednesday tourist arrivals had reached 2,712,033 in October, down by a marginal 0.44%.

For the 10 months, January to October, the country registered 31,253,920 tourist arrivals, up 8.43%.

Based on a steady performance during the last two months, the year should close with 38 million visits, ahead of the ministry’s 37.5 million target.

In an assessment published earlier this week, KResearch, a Thai bank think tank, forecast international tourist arrivals would close the year at 37.99 million, up 6.7% from 2017. It said tourist receipts from international visits would hit THB2 trillion, up 9.2%.

But on the ground the Thai travel industry is still edgy about the Chinese market concerned that booking declines will continue well into 2019.

The ministry’s latest count for October will add some weight to those concerns. As expected the China market continued to slide registering 646,143 visits down by a substantial 19.79% in October, while another top-10 source market, Russia, generating 101,217 arrivals declined 4.12%

But for the rest of the top-10 source markets, visits increased. Together the top-10 source markets, representing a market share of 67.12%, generated 1,820,354 visits in October a decline of 2.41 year-on-year.

Second placed source market, Malaysia, continued to perform robustly with 310,172 visits representing a 26.60% improvement. Neighbouring Laos, the third strongest country performer, delivered 149,587 visits, up 13.51%. Fourth placed Korea supplied 132,014 visits an increase of 7.12%, while fifth placed Japan recorded 122,034 visits up 10.29%

Thailand’s largest single country market China has been in decline since July (-0.9%) a bigger decline of 11% followed in August and -15% in September. This negative drift continued in October with a drop of 19.79%.

Trade associations hit the panic button in September calling on the government to assist with easy visa measures and other incentives. It responded with a THB2,000 fee waiver for nationals of 21 countries that can apply for a visa-on-arrival, effective for just two months 1 December to 31 January 2019.

Association leaders and even the Tourism Authority of Thailand are hopeful the measure will reverse the slide in the China market and deliver an “additional 500,000 tourists over November and December”.

Cumulative data for January to October released by the ministry showed Thailand attracted 31,253,920 visits recording a respectable increase of 8.43%. Over the 10 months, the top source market China delivered 9,022,192 visits and despite setbacks, July to October, the overall gain edged past the 10% mark.

Last year, the country attracted 9,846,816 Chinese visits and even a worst-case scenario would suggest arrivals could surpass that benchmark by the end of December.

Looking forward to the end of the year, overall tourist arrivals are very likely to overshoot 38 million surpassing earlier forecasts and probably suggesting there was no need to press the panic button.

During October the ministry reported tourist earnings reached THB141,060.57 million down by a marginal 1.11%

Of course, the big negative was China where revenue dropped 22.48%, but two other top- 10 markets also declined; the UK by 1.26%  and Australia by 4.59%.

Over the 10 months, estimated tourism revenue reached THB1,631,518.58 million, up 10.78%

Due to its sheer volume, hiccups in the China market send shock waves through the travel industry that has enjoyed a boom in travel that required little or no marketing support.

However, the obsession with an easy sell in the China market has led the industry to ignore consistent declines evident in other country and regional markets.

Declines in the Russian market have been monitored for almost for three years, while regional monthly performance data shows massive declines in the Middle  East market, clearly illustrated by a 25% decline in October alone. A soft performance has been evident in Europe down by 3.93% in October.  These negative trends are a serious challenge for the industry and the Tourism Authority of Thailand, but forgotten in the panic to reverse setbacks in the China market.

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