Tourism Situation Concerning Inbound Foreign Visitors in 2005
Overview
The World Tourism Organization (WTO) estimated that the average growth of
international tourists in 2005 would be 5.5% (lower than in 2004, when the growth of
world tourism experienced a 10% expansion), with 808 million international tourists.
However, the tourism industry saw a slowdown, as a result of the world economic
downturn. The region which was expected to grow at a higher rate was the Asia
Pacific (+10%) owing to the fact that tourists paid more attention to finding new
attractions in this region, especially in Cambodia, Vietnam, India and China, where
there was high growth in the number of visitors. Other regions at the lower ranks were
Africa (+7%), the Americas (+6%), Europe (+4%), and the Middle East (+3%),
respectively.
In Thailand, the tsunami disaster and disturbance in the 3 southern provinces,
as well as the increased market competition in new destinations (Vietnam, China,
India) and tourism product creation (Japan, Hong Kong, and Korea) were key factors
of Thailand’s steady tourism growth in 2005, with 11.52 million inbound visitors, a
1.15 % decrease from the previous year. However, this slowdown is not that severe,
due to the attempt of the public and private sectors to stimulate markets and recover
the attractions affected by the disaster as fast as possible. These resulted in a slight
impact of the above-mentioned factors on the Thai tourism industry.
In the first quarter, the tsunami dramatically discouraged Thai tourism growth
(-10%) because visitors from all over the world were shocked by the unexpected
terrible damage. Moreover, they waited and were looking forward to hearing of the
safety, security measures, and what the disaster would bring. Nevertheless, in the
second quarter, the situation gradually recovered. The rate of the slowdown decreased
(-1%) and improved to be positive during the second half of the year, with a growth
rate of 2% in the third quarter and 4% in the final quarter, compared with the same
periods in the previous year. In addition, most tourists who prefer visiting beaches
and the sea changed to visit other alternative provinces in the Gulf of Thailand, such
as Trat, Hua Hin and Samui, rather than the Andaman coast. Those destinations had
the highest occupancy rate during the past five years. Also, the ceremony to
commemorate the first anniversary of the tsunami disaster created Thailand’s good
image and showed the world that all affected areas were recovered.
During the crisis, the Americas and Oceania were only two main regions
which still tended to continuingly visit Thailand in each quarter, because the affected
areas were not popular destinations among Americans, who preferred cultural
tourism, while Oceania was stimulated by the great successful sales promotion,
especially to bring the market back to the Andaman rapidly. However, East Asia,
which was the largest market of Thailand was quite sensitive to the crisis and
experienced a sharp drop. Although there was a rebound in the last quarter, it had only
a 1% increase. Therefore, the overview of the Asian market in this year experienced a
rate of -5%, and this was the key factor of a slowdown of the Thai tourism situation.
East Asia
The total number of inbound visitors from East Asia was 6,692,569 million,
with a 5% decrease in the growth rate. The key markets were China, Korea, Japan,
Hong Kong, Taiwan, and Malaysia, all of which were affected by the tsunami disaster
on 26 December, 2004, especially in the first quarter of 2005. The catastrophe also
had a great impact on the main tourism province, Phuket, which is very popular
among the mentioned markets, particularly honeymooners. Therefore, there were a lot
of cancellations of visits, partially resulting from the media which reported news by
focusing too much on the damage and distorting the real situation in Thailand with the
pictures in Indonesia, Sri Lanka, and India, although there was an effort to urgently
recover the attractions. That led tourists to get confused and believe that Thailand was
terribly destroyed. In addition, first-time travelers could not know exactly the distance
as well as location between Phuket and Bangkok; thus, they thought that Bangkok
was damaged, too. Furthermore, most Asian tourists would not like to travel to the
place where tragedy happened, and it must take months to forget the painful situation.
However, in the last quarter, the situation seemed to improve especially in China and
Japan.
Considering the details in each market, Singapore was the only main
destination which was not affected by the tsunami; therefore, the growth in the
number of visitors in this region did not decrease sharply. Most tourists travelling to
Singapore were repeat visitors who knew Thailand well and often spent weekends in
Bangkok. In addition, the low-cost airline, Tiger Airways, had opened the new route,
Singapore - Chiang Mai, in February and increased flights to Bangkok from 21 to 28
flights per week.
The main markets which were not very affected and took a short time to
recover were China, Japan, and Malaysia. Japan was affected for a very short time
since it regularly experienced tsunami many times a year and the Japanese understood
the situation well. About China, it recovered rapidly during the second half of the
year, resulting from the celebration of the Sino-Thai relationship in September and
both governments signed terms of reference to exchange visits and the Chinese
government transferred visitors to attend a large-group seminar during the end of the
year. Regarding Malaysia, it was continuously affected by the disturbance in the 3
southern provinces, so there were less tourists traveling through the South border.
Although some of those visitors travelled by plane through Bangkok, the total number
of visitors still decreased as the South border supported larger amounts of visitors.
The most affected markets were Hong Kong, Taiwan, and Korea since there
were cancellations of flights to Phuket by Dragon Air, China Airlines, and Korean Air
all year. In addition, last year, the competition in the tourism market increased while
Japan and Hong Kong were important competitors. Japan held the Expo 2005 in Aichi
Prefecture from March to September and launched the Visit Japan campaign with a
policy to attract inbound tourists, such as exemption of entry visa for Taiwanese
tourists temporarily at that period and permanently since October onward, which
made Japan a popular destination among Taiwanese visitors.
Concerning Hong Kong, people tended to travel domestically especially the
family market because of the opening of Hong Kong Disneyland in September. Korea
was affected because the area where the situation took place covered the popular
marine attractions for honeymooning couples. After the tsunami, many tourists
seemed to change their route to Bali and the Philippines instead. However, Korea
recovered better in the end of the year, especially when there was a bomb in Bali.
In 2006, it is estimated that East Asia will tend to recover from the tsunami,
with more visitors than in 2004, particularly in the first quarter, when the Chinese
New Year Festival stimulated more inbound Chinese tourists. Besides, many airlines
such as Korean Air, Asiana Airlines, Air China, and charter flights which used to
cancel flights to Phuket resumed their flights to the province, which is expected to
revitalize Thai tourism. However, other factors such as the political chaos and
disturbances in the 3 southern provinces should be taken into consideration because it
might be important factors for some groups of tourists to make decisions on travelling
to Thailand, especially in the first visit.
Europe
Although the tsunami in the end of 2004 had a great negative impact on
Thailand and terribly damage tourism in 2005, especially along the Andaman coast,
which was a key destination for European tourists, it was found that the European
market had recovered very rapidly. It resulted in the overview growth at a rate of a
3% increase, equivalent to 2,686,567 European tourists. The sign of recovery was
noticeable since the second quarter.
For Scandinavia, which had the highest number of victims in the tsunami
disaster, also had a quite rapid recovery. The market began to expand positively since
March and it resulted in more than a 6% growth rate in 2005. The growth in the
number of travellers and the return of visitors resulted from the impression in Thai
people’s hospitality, assisting foreigners in the disaster, guaranteed by many prizes of
popular destination that Thailand got from the Scandinavian countries. In addition, at
the end of the year, there were a lot of flight reservations to Thailand, contributing to
the growth in the number of Thai Airways’ direct flights from Stockholm to Bangkok
from 4 flights per week to 5 flights per week in June, and to 6 flights per week in
October, respectively. Thai Airways had also increased direct flights from
Copenhagen to Bangkok since November.
In the UK, a large market, there was a steady growth all year due to the fact
that it has been a familiar market for a long time. Most tourists knew and understood
the situation in Thailand well. In addition, Thai Airways increased direct flights from
London to Bangkok from 13 flights per week to 14 flights per week (2 flights daily),
since the middle of the year, which resulted in more convenient transportation.
Therefore, the UK market had an 8% increase in growth, with 680,978 tourists.
France, the third largest market in this region, expanded at a rate of 4% according to
the marketing trend. The market growth decreased in the first quarter owing to the
impact of the tsunami and enjoyed a rapid recovery in the second quarter. Although
there was news about some French infected with bird flu in Thailand, at the same time
when the disease spread in Europe, it did not affect the market growth that much.
However, it was noticeable that at the end of the year, Air France adjusted the route to
Southeast Asia by halting the route Paris - Vietnam through Bangkok for 7 flights per
week, and provided direct flights to Vietnam instead. This led to the decrease in the
number of seats although Air France still had 7 direct flights per week to Bangkok.
Then, Thailand lost its status as a gateway to Indochina, reflecting the strength of
competitors which developed themselves to get more market share than Thailand.
Therefore, all related parties in the marketing promotion in France should take this
point into consideration seriously.
Nevertheless, the situation in the second largest market such as Germany was
steady and had a slight slowdown at a rate of 0.38% due to the pressure from the
country’s economy which began to slow down, besides the impact from tsunami in
the first quarter. Consequently, the market could not recover positively while the main
market such as Russia, East Europe, and Italy were in a bad situation. The crisis
caused by the tsunami disaster had decreased the growth expansion from 10%, 8%, to
4%, respectively. These three markets were very sensitive to crises and most Russian
and East European travellers are first time visitors, so they did not know Thailand
well. Most travellers lacked correct and precise information, so they were not assured
about the situation in Thai coastal attractions. In addition, the news concerning the
return of the bird flu epidemic both in Southeast Asia and Europe, and the re-bombing
in Bali stressed the unsecured image of this region.
Regarding the trend in 2006, it is estimated that Europe will recover from the
crisis and return to a normal situation, driven by the growth factors such as the
opening of Suvarnabhumi Airport, which will increase the passenger flow and bring a
good image of Thailand, besides Thai’s people expressions of kind hospitality helping
victims in the tsunami disaster, and the arrangement of the ceremony to commemorate
the 1st anniversary of the catastrophe, which were very touching for foreigners. In
addition, the good impression is also the result of the celebration of the 60th
Anniversary of His Majesty’s Accession to the Throne, in which the King invited
royal guests from many countries to attend and special events have been planned to
celebrate this auspicious occasion all year. Moreover, the Royal Flora Ratchaphruek
2006, an international horticultural exposition for His Majesty the King, will be held
at the end of 2006, with hope to encourage the ongoing inbound visit.
The Americas
In 2005, there were 705,481 inbound visitors from the region, a 2% increase
compared with the same period in the previous year. The American and Canadian
markets were the key markets of the region which has had a strong growth since the
beginning of the year driven by the economic growth of both countries. Canada,
especially, had an expanded growth in the oil export sector, the main industry of the
country. In addition, the Canada dollar which tended to be stronger appeared to be the
key factor to encourage more long haul Canadian travellers. However, both markets
were affected very little by the tsunami disaster at the end of 2004, as most travellers
often came to cultural attractions, mostly visiting Bangkok and Chiang Mai, while
travellers who preferred visiting the Andaman coast changed their destinations to
other places. Besides, the market growth was also driven by the Thai Airways’
opening of direct flights in the route Bangkok - New York and Bangkok - Los
Angeles. Furthermore, the external factor, such as hurricanes Katrina and Rita, the
severely damaging natural disaster in the US in September, did not affect the tourism
market that much, because the affected areas; namely, Louisiana, Mississippi, and
Alabama were not the major cities of departure for travellers to Thailand.
In connection with the situation in 2006, the American market is expected to
have an ongoing growth, positively driven by the economic strength of the US and
Canada, and the follow-up reinforcement from the Thai Airways’ opening of direct
flights from New York and Los Angeles. In addition, Thailand’s attractions are
ranked in the top popularity among American travelers, voting through many travel
magazines, which encourage a good image of Thailand.
South Asia
In 2005, the South Asian market had an 11% increase with 503,959 visitors,
while almost every market in the region experienced the growth expansion. India, the
major market in the region had been growing at a rate of 18%, with 352,766 visitors,
driven by the country’s economic factors during the past few years. In addition,
Indian travellers often choose Thailand as one in the list of popular destinations for
shopping before going back home. Furthermore, Indian Airlines added 2 more flights
per week in the route Kolkata - Bangkok in the 2006 summer flight schedule (the total
was 6 flights per week). However, Bangladesh, the second largest market, had a
slowdown, resulting from the chaos after the assassination of an ex-minister, such as
violent actions, demonstrations, and bombs in strategic points. Besides the political
disturbance, those circumstances had a severe impact on the country’s economy and
led to less outgoing travellers.
In 2006, it is estimated that the South Asian market will remain at a steady
growth due to the healthy growth of India’s economy, including the policy to increase
the number of flights between the Thai and Indian governments with the goal to
increase the number of seats to 10,000 seats per week within 3 years. According to the
discussion of the government of both countries, it resulted in the increase of the
number of seats in flights from Bangalore and Kolkata. Bangalore will apply this
measure in the summer flight schedule 2006, and Kolkata in 2007 (at present, Thai
Airways provides 5 flights per week in each route). In addition, the consensus in the
discussion encourages airlines from Thailand to open the route Hyderabad - Bangkok
in the winter flight schedule in 2006-2007. (At present, Indian Airlines provides 2
flights per week).
Oceania
In 2005, the Oceania market had been growing steadily since 2004, although
there was a temporary stop in January and February 2005 after the tsunami disaster
because tourists still panicked. However, after being assured of the safety, they chose
to travel to Thailand again, resulting in an 8% increase in growth and it expanded
continuously all year. In overview, the Oceania market had been growing at a rate of
8%, equivalent to 501,882 inbound visitors. The key driver of this growth was the
economic recovery in the previous year and in terms of crisis management, public
relations plans and events were created to stimulate the market, including publication
of articles in various media, special offers of lower-priced package, and provision of
charter flights directly to Thailand. In addition, the increase in Emirates’ flights from
Sydney to Bangkok, and Thai Airways’ change to provide direct flights in the route
Oakland-Bangkok for 3 flights per week in the middle of 2005, which increased to 4
flights per week at the end of the year, also contributed to the growth. In October,
since there was another bombing incident on Bali, Indonesia, many travel agencies
changed their tour programmes from Bali to Phuket during that period, partly driven
by the Thai public relations campaign to present the recovery of attractions in Phuket
after the tsunami disaster. Furthermore, at the end of the year, Jet Star, a low-cost
airline of Australia, opened new flights to Thailand. All of those were key drivers
which enhanced the growth of the Oceania market all year round.
About the trend of the tourism situation in 2006, the Oceania market has a
healthy ongoing growth, resulting from many supporting factors, such as the
economic stability and positive factors from the opening of Jet Star’s routes, Sydney Phuket and Melbourne - Bangkok, which offer more convenience and lower prices. In
addition, the arrangement of the celebration of the 60th Anniversary of His Majesty’s
Accession to the Throne, where royal guests from many countries were invited to
attend, also created a good image to Thailand, promoting attractions and presenting
the security which are the key factors that tourists consider after the incident in Bali
until now.
Middle East
The Middle East market has been growing at a rate of 12% increase in 2005,
with 274,267 inbound travellers, compared with the same period in the previous year.
However, in the beginning of the year the market was discouraged, resulting from the
tsunami disaster taking place in the end of 2004 because the affected areas were top
destinations, besides Bangkok and Pattaya. Furthermore, most travellers
misunderstood that those areas in Pattaya were also damaged and at that period there
were grand festivals in the region, such as Dubai Shopping Festival and Global
Village Activities, so the outbound travelling of the Middle East decreased. In
addition, there was a problem regarding the peace-making process and threat of
terrorism in the Middle East. However, in the middle of the third quarter, it
experienced a rebound, according to the progression of a plan to withdraw troops
from the Gaza Strip and West Bank. The serious action to solve the problem of related
organizations reassured that peace will be back in the Middle East again.
In 2006, the market is expected to retain the growth at a moderate to lower
rate. There is still a negative factor that may have an impact on the decision to travel
overseas among Middle East travellers such as the worry about terrorism in major
cities of Israel, political weakness caused by the problem in Palestine, and conflicts
with Hesbollah in Lebanon.
Africa
In 2005, the growth in the number of travellers from Africa decreased at a rate
of 12%, with 72,873 visitors. Even South Africa, the key market, had a 19% decrease
with 33,120 visitors. The key factor was the tsunami disaster, which took place in the
end of 2004, leading to misunderstanding about the affected areas and change of tour
routes. In addition, the lack of direct flights is still a major obstacle of the growth.
In 2006, it is expected that the African market will grow again following the
Thai Airways’ opening of the route, Johannesburg-Bangkok, with 3 flights per week,
and the economic situation in South Africa that tends to have a good growth.