As International Arrivals Head South for Thailand, is Enough Being Done in the Land of Smiles to Arrest the Decline?

November 5, 2019

For decades past, the allures of a wai and a smile have enriched Thailand tremendously. Tourism reportedly accounts for 18.4% of the kingdom's GDP in 2018 and its visitor expenditure is currently the highest in Asia, raking in $57 billion in international tourism receipts.

 

The victory monument at Bangkok Old Town has seen livelier days

 

Yet despite the tremendous boom, the future does not look all that well for Thailand's hospitality sector. Even as the country's tourism authority is heralding rebounding figures for arrivals over the past 3 months, it has already shaved its arrival projections and had announced visa-free measures for more countries in tandem with a post-election 316 million baht boost for the economy.

 

Industry realities also project contrary scenarios - businesses seem to have suffered across the board notwithstanding the official optimism via government mouthpieces. In May, Thai Airways revealed that it was suffering a US$26.2 million (828 million baht) net loss in the first quarter of 2019. Another airline in Thailand – low-cost carrier Nok Air – reported a $12.6 million (391 million baht) loss for the first quarter of 2019, both casualties of lower arrivals into the country. Declining arrivals from China, Thailand's biggest market, is a serious knock that is far from unraveling. The inexplicable strength of the baht in the current economic climate has also made Thailand significantly more expensive, and therefore a less compelling destination, to visitors. 

 

 There is variety, as well as complacency within the Thai tourism sector

 

More significantly, the value of the quintessential Thai experience has also been in steep decline, ironically brought on by the boom of its tourism sector, and also in no small part by politically-induced developments within the country.

 

Since the military-led government came into power in 2014, a perceptible drive to 'clean up' the country was hastily put into effect. Food carts along famous stretches like Sukhumvit Soi 38 were pushed off the streets after the coup, right after the capital was voted best destination for street food 2 years running. In Chiang Mai, the annual spectacle of lantern releasing over the Loy Krathong festival was disallowed, or largely scaled back since 2014. This year, the administration of the northern city will be imposing fines of up to THB200,000 and/or jail terms of up to 5 years for offenders of the ban. These are just 2 examples of unique attractions to Thailand being haphazardly erased from a country that depends much on tourism.

 

 The weekend market of Chiang Mai is still worth a stroll but the usual line-up of knick-knacks, and skewered scorpions, is getting staid

 

Compounding such heedless policies with limited developments in areas where the country can really benefit from - effective immigration controls, environmental conservation, traffic and law enforcement etc, it is really a matter of time before interests wane in a country that merely repeats itself. The same predictable night markets, overtly sweet cuisine, uninspiring spas and the overblown sites and sights can only maintain interests for so long before the crowds disperse. And it has already begun, with the disappearing Chinese tourists hitting the sector hardest this year.

 

In spite of the buoyant figures the Thai tourism authority is quick to cite, the grouses from the ground evidently ring contrarian.

 

 Lavish welcome at the Four Seasons Koh Samui, one of the island's top luxury resorts

 

"Compared to last year Chiang Mai is definitely quieter this year. Throughout the year we haven't experienced a high season like in the good years. Businesses from street vendors to hotels are feeling the sting of the situation,' the hotel general manager of a luxury hotel in Chiang Mai told us.

 

"The authorities are not helping with their unclear policies. The lantern releasing over Loy Krathong is supposed to aid the industry in such challenging times, and now with the order to ban the festivity tightened, we fear it will affect us negatively moving forward, for this and other years ahead," another general manager in the city lamented.

 

 A beautifully restored Thai house once inhabited by the Leonowens family adds to the charms of the famous 137 Pillars House Chiang Mai

 

Over at Koh Samui, the country's upscale resort island, the situation isn't any better.

 

'There is no denying that the demand has softened for Koh Samui over the past 18 months, and we see this across all markets and segments for a multitude of reasons. In these times we just have to work harder to remind our traditional markets what makes us special not just as a resort but as a destination," said the general manager of an international luxury resort on the island.

 

 Villa Mahabhirom in Chiang Mai features over a dozen restored Thai houses set amidst an elegant tropical garden, possibly the first of its kind in Thailand

 

Our latest visits to these Thai destinations have shown us that while there are still charms aplenty in the country, the industry needs to be reinvigorated with better infrastructure and attractions that are meaningful as they are sustainable. Perceptibly the luxury resorts and hotels rigorously making their mark, being some of the best establishments in Asia, have remained some of the kingdom's top attractions whilst the macro channels seem to have stalled one way or another.

 

  Inspired cuisine at Anantara Lawana in Koh Samui,  a stand-out resort that renders trek out to nearby Chaweng unnecessary

 

On the flip side, over-development in the midst of the industry's current slow-down may also prove to be another millstone around its neck. With a slew of high profile openings expected this and early next year in and out of Bangkok, none is too hopeful that the proverbial build and they will come adage will ring true this round.

 

 

 

 

 

 

 

 

 

 

 

 

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