COMMENT: Thailand’s allure is too strong

Thailand’s allure is too strong to be undermined by potential political unrest, writes Michelle Grant, travel and tourism manager at Euromonitor

Since the removal of prime minister Thaksin Sinawatara in 2006, Thailand has gone through multiple episodes of political unrest, the most recent being between November 2013 and February 2014. Despite the protests and coup during this period, international arrivals reached a record 27 million in 2013, and since 2006, international arrivals have only declined in 2009 when the global recession had a significant impact.

Thailand’s resilience is thanks to an increasing number of Chinese, Russian and Malaysian tourists, which have surged in number since 2006 and are expected to continue to grow over the next five years. Chinese, Russian and Malaysian tourists accounted for 54% of growth in international arrivals between 2006 and 2013.

Thailand’s proximity, relative low costs, array of attractions and significant air capacity draw visitors from these countries. Chinese tourists visit Thailand for its temples, beaches and shopping. Additionally, the 2012 Chinese film "Lost in Thailand" inspired more tourists to flock to the country. Russians enjoy Thailand’s beaches, which are easily accessible through charter operations, while Malaysians prefer to cross into Thailand through its southern border to enjoy popular destinations such as Had Yai and Koh Samui.

These tourists are aware of the unstable political situation in Thailand, and when protests occur, they either avoid the affected areas or temporarily postpone their travel plans.

The country has a well-honed strategy to boost tourism in the aftermath of political unrest. After the unrest in 2009, the government compensated international tourists and residents during the airport closures; launched an ad-hoc marketing promotion budget to rehabilitate Thailand’s tourism image; reduced airport landing fees; reduced the tax on tourist-related businesses; and eliminated visa application fees for a year.

The government was also quick to react once the situation stabilised in February 2014. In that month, the Tourism Authority of Thailand and Thai Airways partnered to bring 40 media groups from Asia and Europe on a familiarisation trip, where the media visited various attractions and listened to presentations on the country’s marketing and visitor safety plans. In June 2014, the Tourism Council of Thailand (TCT) released proposed guidelines on how to increase tourism, including a visa fee waiver for Chinese and Taiwanese tourists. Although the TCT suggested that the waiver last for six months, the waiver has actually only been enacted for three (from 1 August to 31 October 2014).

According to the Ministry of Tourism and Sports, international arrivals declined by 10% between January and June. It seems, though, that destinations started to see a strong recovery in July. The Tourism Association of Koh Samui expects that hotel occupancy rates will normalise in August and finish the year strongly. The TCT expects that growth in international arrivals will only achieve 1% growth for the year as a whole. It is important to note, however, that the TCT predicted an 11% decline for 2010 but arrivals ended up growing by 14%. There is a significant chance that the second half of 2014 will be stronger than the TCT expects it to be and growth could be much higher than 1%.

The outlook in the medium term is bright for Thailand. Euromonitor International expects growth in total arrivals to be 36% over the next five years. Again, China, Russia and Malaysia will be the main drivers. The integration of the ASEAN Economic Community (AEC) in 2015 will also help as it will become easier for goods and people to move across borders.

The main challenge is that Thailand’s’ political instability is likely to remain and could potentially erupt into violence again. While tourists are aware of this risk, it does not mean that they won’t hesitate to cancel or postpone their trips in the short term. However, the government has great experience in reviving the tourism industry quickly and the country’s allure is too strong to be undermined by the potential for political unrest.