Thailand Tourism Rebounds With Chinese Arrivals

Tourists are flocking to Thailand at record levels, especially from China, as the country enjoys its first period of prolonged calm after massive flooding in 2011 that left two-thirds of the country submerged and years marred by political upheaval.

An estimated 21 million tourists visited Thailand last year, the most ever for the kingdom and a more than 15% increase from 2011, according to the Tourism Authority of Thailand. Authorities hope to welcome nearly 25 million tourists this year, generating more than $38 billion in revenue for the country.
"People in Thailand are so friendly. And everywhere you turn, there's something to do, see or buy," said Stefanie Chan, a 24-year-old from Singapore who fondly recounted stumbling across a wholesale market while lost in Bangkok on a trip in December and having strangers rush to her help with first-aid supplies when she fell into a manhole. Ms. Chan plans to return to Thailand in April.
Government, tourism and hotel officials are hopeful the tourism boom will continue, especially from China, which took the No. 1 spot for foreign arrivals for the first time this year. But Thailand faces competition from exotic locations, such as neighboring Myanmar.
Thailand has long been one of the world's most visited and tourist-friendly nations, but natural disasters and political troubles in recent years have sometimes disrupted tourists' plane schedules and sightseeing plans.
Some tourists, for example, were stuck in Bangkok's Suvarnabhumi International Airport while it was barricaded by protesters in 2008, and others were caught in army fire along the legendary Khao San Road in 2010 when protesters were setting the city ablaze. And in 2011, some tourists found themselves dealing with severe flooding that submerged 65 of Thailand's 77 provinces, including the Unesco heritage site of Ayutthaya, a tourist favorite, and parts of Bangkok, including Don Mueang International Airport, which typically services regional budget carriers.
Still, tourists keep coming, with arrivals rising even in chaotic years. According to the Tourism Authority of Thailand, tourists are also spending more, with earnings from tourism reaching more than 965 billion baht ($32.4 billion), a 24% rise from 2011.
Tourism authorities are increasingly positioning Thailand as a destination for luxury holidays, with five-star getaways catering to European and American travelers, many of whom continue to visit Thailand's beaches and cities despite turbulent economic times. Thailand's tourism revenue from the French market, for example, was €671 million ($892 million) from January to October last year. That represented a 13% increase from 2011, according to tourism authority data, bucking global trends.
As the Asian-Pacific region enjoys rising levels of disposable income, though, Thailand is receiving its largest boost of tourism arrivals and receipts from travelers much closer to the country. Top spenders in the first half of last year hailed from the United Arab Emirates, Hong Kong, South Africa, Singapore and Kuwait.
Sittichai Duangrattanachaya, an analyst with UOB Kay Hian Securities in Thailand, said a large reason for the jump in tourist arrivals is a big push by tourism authorities to market Thailand to travelers from the Asian region, particularly from China.
The Chinese were among the top 10 spenders in Thailand last year, many of whom traveled to the well-trodden beaches of Phuket and Koh Phi Phi for the first time in large tour boats and buses.
The experience of a Chinese tourist was recently captured in the low-budget film "Lost in Thailand," a comedy that set box-office records in China—beating even James Cameron's "Titanic 3-D." The film is likely to convince more Chinese to visit, analysts say.
Chinese tourists already account for the largest chunk of arrivals to Thailand. Last year, 13.8% of all visitors were from China, more than 2.7 million tourists. That is an increase of 62% from 2011, as many Chinese vacationers chose Thailand over such destinations as the Philippines and Japan owing to China's political tensions with these nations over competing territorial claims in the South China Sea.
"We've noticed a shift in tourism trends, with Asian travelers assuming more prominent positions against European travelers," said Lothar Pehl, regional vice president for Starwood Hotels & Resorts Inc. which owns 20 hotels in Thailand. There is "evidently [a] stronger demand from China and an increasing the number of Chinese guests at our hotels," Mr. Pehl said.
Major hotel players are also following suit. New five-star, brand-name resorts are opening every few months. That is true even in Bangkok, which is already one of the most hotel-packed cities in Southeast Asia. The Sofitel So, Okura Prestige, Sofitel Sukhumvit, Grand Eastin and most recently the W Hotel all opened their doors in 2012. These and other new hotel openings added almost 6,000 new rooms to the already crowded market, according to a report from Jones Lang LaSalle JLL +3.21% .
At least for now, tourist arrivals show no sign of slowing. The new W Hotel in Bangkok, the first W hotel in any of Thailand's urban cities, had all of its 407 guest rooms and suites packed up for the month of December, even before the hotel's official launch.
Dozens of hotels were booked solid over the New Year period—typically a quiet time for Bangkok, where many Thais return home to celebrate with their families. Starwood Hotels—which owns the W Hotel brand—said all 20 of its hotels in Thailand had more guests last year. In 2011, hotel occupancy rates hovered around a respectable 62%, according to latest available data from the Thai Hotel Association. Analysts estimate that rose to about 70% last year.
Still, the looming threat of political strife and violent protests are never far from the minds of hotel developers, who privately worry that recurring tensions between political factions will once again spook travelers from visiting Thailand. Some governments, including the U.K. and the U.S., still warn their citizens of a volatile and unpredictable political situation in Thailand, cautioning them against getting caught up in large demonstrations or gatherings.
Thailand may also start to face some competition from Myanmar, whose nascent tourism market has boomed in the past year since the civilian government embarked on a series of reforms aimed at democratizing the once-pariah nation and opening it up to the international community.
While still paling in comparison to Thailand, Myanmar welcomed over one million tourists in 2012. Myanmar expects more visitors as infrastructure—including financial services and the availability of ATMs—improves in coming years.
Nick Walsh, a 26-year-old traveler from the U.K., is one Thailand-weary traveler looking for a new adventure spot. "Bangkok is great, but I've come here so often that I'm bored of it," Mr. Walsh said. "Myanmar is definitely my next holiday destination. I've heard the beaches are amazing."
(Source: WSJ)

Suvarnabhumi International Airport