In the 20 years since the new millennium, Thailand’s tourism industry has continued to grow.
We’ve now become one of the preferred destinations ranking 10th most visited county, based on 2018 statistics with 38 million arrivals. Much of the growth can be attributed to better infrastructure like roads, better airports, new hotels, shopping facilities, tours services, directly and indirectly related to tourism.
But it’s also a product of forward planning and the TAT has been proactive in the development new markets to help move the country forward.
Tourism Arrivals 2017
The direct contribution of Travel & Tourism to GDP was THB1,433.5bn (USD42.2bn), 9.4% of total GDP in 2017 and is forecast to rise by 7.8% in 2018, and to rise by 5.7% pa, from 2018-2028, to THB2,700.6bn(USD79.4bn), 12.8% of total GDP in 2028.
Over the last 20 years, we’ve seen a handful of countries including the UK, Germany France, and Russia, help drive tourism to new heights, together with those closer to home, such as Malaysia, Japan, Korea and Australia.
Now that these traditional markets have reached maturity, alternative supply sources need to be cultivated to keep the industry growing and profitable .
So far, Thailand has done a good job at harvesting new markets and now its up to the hotel industry to do it’s part to develop deeper ties and look for more value added services to keep tourism an important contributor to GDP.
Tourism demographics are evolving, so even though traditional markets will continue to play their part, they will offer less of a crucial role to the resources provided by the emerging markets of India and China.
Let’s take a look at how the dynamics are changing, and why both India and China are important to the marketing mix for Thailand’s tourism economy. Also, we’ll consider the challenges and benefits these market offer and some key issues that matter in catering to their needs.
People count and a country’s population is relevant in evaluating the growth potential. With India and China, we know they each have a large pool of working class and professional individuals and show similar growth patterns.
Presently there are 1.41 billion people in China and 1.36 billion in India.
By 2020, its expected that there will be approx. 240 million passport holders from China, and another 73 million from India.
As with size - population age and composition is equally important.
In the case of India and China, both have a working class population in the 15 - 64 years old age group representing 64 % and 72 % of the total population respectively.
The average spend rate for both Indians and Chinese is almost triple that of Typical Expat (Westerner) tourist and they’re staying for the same length of time (3 day holiday).
The Chinese are reported to spend on average around USD$1370 while Indians are spending about USD$1200.
This is over and above what they will spend on accommodation as the figures represent what they spend on shopping and other activities.
India: Let’s consider the market in terms of potential and size. Looking at recent arrival trends for potential growth within the top 10 tier arrivals as shown below, we see that India is one country with potential, having increased its year on year base by 13 % between 2017– 18.
China: The is undoubtedly already the leader… with more Chinese arriving in Thailand than any other country - 9.8 million and more than from all ASEAN countries combined at 9.1 million.
We should also note that recent travel trade reports mention that Thailand placed highliy and in the top preferred destinations of both India and China. And while Thailand was number one for Indians, China ranked Hong Kong, Macau and Taiwan (Chinese Territories) as their top outbound destinations with Thailand - placing forth.
That means, when it comes to tourists from both India and China, Thailand is actually number one.
To understand and evaluate what Indian and Chinese travelers liked and disliked, about their travel experiences in Thailand, one of the best sources of information is found in the feedback posted on Tripadvisor, Wechat and Crtip (reviews) respectively. This is where reputation management is important and offers opportunities for hoteliers.
Indian travellers tend to review their experiences and post feedback whenever there was something negative to report or when they were unhappy about something. The bulk of reviews posted on Trip Advisor were taken from Indians staying in lower grade (2 – 3 star) hotels. Perhaps there’s an opportunity for betterment there? And even with all the negative feedback, their review of top end and luxury hotels tended to be positive overall.
Compared with reviews posted by Chinese travelers (in Chinese) – theirs’s tend to offer a more balanced and “fair” opinion. Nevertheless what’s unique is the feedback is quite detailed – with reviews stating the good, bad and ugly. And, what’s really useful is that the reviewers provide ranking scores for things like Price, Location, Service, Hygiene, Quality of Sleep and Comfort.
In spite of a large number of hotels using Trip Advisor and Ctrip to garner hotel bookings, Thai hoteliers still don’t spend enough time dealing with reputation management or PR.
Witness the thousands of reviews and discussion threads about hotel’s and it’s clear, many don’t understand the power of social PR and reputational management. Especially in the case of the Chinese market, who use WeChat and Ctrip almost exclusively in Chinese - and you can see missed opportunities.
To be sure … WeChat isn’t just an app the Chinese use to communicate, but rather its something that facilitates their whole existence. Any hotel serious about the targeting the Chinese market - and in particular higher spending FIT’s would need to be conversant with WeChat.
We mention and make a point of reputation management because it's given free and one of the only ways to drive better more value added business to the hotel based on real time experinces.
Key issues Chinese travelers discuss have to do with Internet connectivity and access. Hotels that don’t offer free and fast Wifi are not well regarded and because Chinese travelers live on WeChat, if there’s poor internet connectivity they won’t come back.
Otherwise, what’s important are universal in room plugs and USB charging facilities. These don’t get offered enough, and many hotels offer charging points that are not conveniently located.
Finally, the Chinese love to shop, so it pays if the hotels offers tailor made shopping experiences and for that matter, assistance in speeding up the VAT refunds process. Also important is the choice of payment method in settling hotel bills, such as WeChat(Pay) and AliPay for example.
Meanwhile, the important issue for Indians revolve around money and food. Indians use debit cards rather than credit cards, so when a hotels needs a surety deposit, they are actually having cash taken out of their banks back home. Even though the hotels release the funds at checkout, Indian banks may take several months before depositing those funds back to their accounts.
Language barriers can be an issue for some travelers, so it makes sense to have staff on hand that can speak Hindi. In fact language issues are often mentioned in Feedback comments, which highlights the fact that not all Indians speak English.
For both demographic groups Food, and the quality and authenticity is important.
If the hotel is targeting these markets and advertise that they have Indian or Chinese food, but the food is a poor excuse for the real thing you can be assured its going to be a discussion point in reviews. So if you’re going to offer Indian or Chinese, do it properly or don’t do it.
Knowing already that India and China offer big potential, we can't ignore them as a source of tourism for now and into the future. With a better understanding about the relevance and potential each market offers, we can understand why we should target both.
How we go about doing this can only be through a better understanding of what’s unique and important to Indian and Chinese travellers.
The opinion and feedback they offer matter and are freely provided, so it pays to become more aware of the advice provided. Therefore we can prioritize and evaluate what’s important to them and adapt ourselves to becoming more relevant.