Thailand’s struggling tourism industry is finding support with visitors from the population colossus to its west, just as the years of bumper arrivals from the giant to its north are beginning to wane.
At a beachfront hotel on the tropical island of Phuket, the occupancy rate from Chinese clientele has stalled, while bookings from India have begun to rise. The Vijitt Resort is one of many in Thailand that has more cause for optimism.
“We’re starting to see new growth,” said Kongsak Khoopongsakorn, Vijitt’s general manager and vice president of the Thai Hotels Association. “Indians are now driving industry growth like the Chinese had previously done.”
What’s happening to Thai tourism could prove a canary in the coal mine for the leisure sector in other Asian economies as China matures and a new India emerges. The Thai industry had been expanding at about 10 per cent a year on escalating inbound Chinese arrivals, but a 2018 boat accident in Phuket that killed dozens of mainlanders and a slowing economy at home have triggered a drop in numbers.
In contrast, Indian arrivals accelerated in recent months due to more direct flights, a visa waiver and, most importantly, increasing wealth.
At least 10 million are now expected to arrive in 2028, a more than five-fold increase on 2018 visits. That sort of growth trajectory would mimic the rise of Chinese tourists, who jumped from 800,000 in 2008 to more than 10 million last year.
The rapid expansion of the middle class among India’s 1.3 billion people has prompted Thai authorities to upgrade their estimates of Indian visitors
Although China will remain an important market, it is likely to offer less growth potential in the years ahead. India, meanwhile, is set to become the new expansion story in Thai tourism, an industry that accounts for about 20 per cent of gross domestic product.
Chinese visitors currently make up 28 per cent of total foreign arrivals, well ahead of Indians at 4 per cent. But within a decade, Indian arrivals are forecast to surge to about 15 per cent of the total, while Chinese are predicted to edge up to about 30 per cent.
“The Indian inbound market could potentially rival that of China,” said Pisit Puapan, executive director of the Finance Ministry’s Macroeconomic Policy Bureau. Pisit said high growth from India has also helped offset a decline from markets like Europe.
Thailand received about 180,000 Indian tourists in June, a record, the Tourism Ministry reported last week. It also said Indians spend 11 per cent more per trip than average foreign visitors.
Chinese arrivals could actually fall this year from 2018 as the yuan has weakened against the baht, according to Bloomberg Intelligence. That might deter more cost-conscious Chinese tourists, or see them spend less if they do make the trip.
A cooling tourism market and dividend repatriation combined to help produce Thailand’s first current account deficit since 2014. The country’s forecast economic growth has already been revised down to the lowest level in four years as exports also fizzled.
There are more direct flights between Indian and Thai cities, one reason for the jump in visitors to Bangkok, Phuket and surrounding areas. They are drawn by Thailand’s food and shopping, and its beaches are emerging as significant attractions.
India’s fifth-largest airline GoAirlines India Pvt currently connects three Indian cities to Phuket, and plans to add seven more. InterGlobe Aviation Ltd’s IndiGo launched services to the tropical island late last year.
Thai AirAsia Co Ltd, the kingdom’s largest low-cost carrier, recorded 20 per cent growth in passengers traveling between India and Thailand in the first quarter of 2019 from a year earlier. It now operates 47 flights a week from Bangkok to nine Indian cities, and said it plans to add an additional destination.
With India projected to overtake China as the world’s most populous nation in eight years, and its middle class forecast to keep expanding, Thai Hotels Association’s Kongsak is cautious but hopeful about the future.
“We expect the industry will continue to grow,” he said. “But it’s important to spread the risk and have a good nationality mix in the market. We can’t rely on any single market.”
Source: Zee News