The next decade will see tourism in Thailand grow at well above the world average, in terms of both contribution to GDP and greater job opportunities, according to a 2012 country report from the World Travel and Tourism Council (WTTC). It forecasts an annual growth in contribution to GDP of 6.4% up to 2022 (world average 4.1%) and a yearly rise in the number of people whose livelihood stems from tourism of 3.9% (world 2.4%) by the same date. Those impressive numbers put Thailand in 14th place in the world of tourism growth.

It is even more impressive against a recent history of man-made and natural deterrents, such as the airport closure in 2008, violent upheaval in 2010 and the devastating floods that hit parts of Thailand at the end of 2011. But none of this has discouraged a growing number of tourists. According to the Ministry of Tourism and Sports (MTS), the number of international visitors in 2011 was 19.23m, a year-on-year increase of 20.7%.

INCOME: The ministry figures showed tourism revenues went up by 31% over 2010 to BT776bn ($24.75bn), considerably higher than the hoped for BT716bn ($22.84bn). Averages for length of stay and daily spend per person were 9.64 days and BT4187.12 ($133.57). Russian visitors topped the million mark, with 1,052,361 in 2011, and also the European table of tourists to Thailand. The number was almost two-thirds higher than the previous year. Second in Europe was the UK, which contributed 771,466. The biggest source market was Malaysia (2,492,034, up 21.7%), followed by China (1,704,800, up 50.6%). Rounding off the big five was Australia, which supplied 835,719 tourists.

Estimates for the whole of 2012 range from 20.5m to 20.8m visitors by the MTS to a less upbeat forecast of 19.55m from the Tourism Authority of Thailand (TAT). Agreement between official bodies on official figures is a work in progress. That extends not just to forecasts but also to the actual number of visitors.

INDIA: TAT put the number of Indians visiting Thailand in 2011 at a record 917,832, making it the top destination for Indians – and bigger than two of the ministry’s top five, Australia and the UK. Kasikorn Research Centre (KRC) in Thailand forecast that the total for 2012 would reach 1.07m. The centre said the number had grown consistently each year at around 15% from a base of 135,000 visits in 1997.

KRC said that travel agencies should switch from a “failing European market” to concentrate on high-end Indian tourists, including weddings and meetings, incentives, conventions and exhibitions (MICE) events. It counselled the establishment of wedding venues besides Bangkok, such as Chiang Mai, Phuket, Krabi, Samui and Nakhon Ratchasima, pointing out that the amounts spent on Indian weddings in Thailand can reach BT10m-20m ($319,000-638,000).

KRC’s thoughts were complemented by TAT representative Runjuan Tongrut, who said wedding planners were a high target market. “Indian weddings cover at least three days and some of the more elaborate events last up to 10 days,” she said. Some 40-50 Indian couples host their weddings in Thailand each year.

CHINA: Though the Indian market is expanding rapidly, the potential for growth from China is still enormous. KRC estimates the 2012 total will reach 2m and generate BT60bn ($1.91bn) in revenue compared to 1.8m visits and BT52bn ($1.66bn) revenue in 2011.

KRC said key factors for growth included the cancellation of a Chinese travel advisory and efforts to improve security for Chinese visitors. The centre suggested creating holidays specifically geared to Chinese visitors and studying the environment surrounding the use of social media in China to discover how much restrictions minimised the usefulness of promotions using these tools.

More Chinese are also visiting Chiang Mai, but the city has a shortage of qualified tour guides, according to Somrit Haikham, the chairman of the Chiang Mai Professional Tourist Guide Association. He said the 20,000 Chinese tourists going to the province annually was very likely to increase to 50,000 as transport improved.

A shortage of guides is not the only problem. Pornthip Hirunkate, the vice-president of marketing at the Tourism Council of Thailand (TCT), told OBG, “China has offered to send 1000 teachers here in each of the next five years to teach Chinese.” Teaching more Thais to speak English was also a priority, she added, “The Labour Department has a budget to train people in language, and the Ministry of Education dictates that from secondary school onwards students must practise speaking English for an hour a day,” said Pornthip. “The third language choice now includes Chinese, Russian, German and French, but it will be four or five years before we see the outcome of this.”

VISAS: Alongside a broad campaign to make it easier for Chinese to obtain visas, Chiang Mai’s hoteliers and the Chamber of Commerce (CoC) are pushing the government to extend non-immigrant visas for Japanese visitors from one year to three years to boost the long-stay market. Narong Kongprasert, the president of the CoC said the city attracts about 3000 Japanese visitors and that a tendency towards long-stays had developed since a tsunami and earthquake hit Japan in 2011.

Long-stay visits could earn hotels approximately BT300,000 ($9570) per person per year, he said. That niche market could grow to 10,000 visits, according to Narong. He said the town had 30,000 rooms suitable for this market, which consists mainly of people over 50 years old. Narong also pointed out that Malaysia was a competitor for Japanese long-stay guests and had granted visas for up to 10 years.

HOTELS: Whatever the true final figure for visitor totals in 2012, the beneficial spin-off for the hotel industry was clear well before the year was out. “The hotel business experienced a good year in 2012 after three bad consecutive years caused by floods and the political situation,” Sanya Saengboon, the executive director and general manager of Siam@Siam Hotel, told OBG.

For Peter Henley, the CEO of Onyx Hospitality Group, 2011 was not a bad year either. He told OBG, “Thailand achieved higher occupancy rates in 2011 over the previous year and we had 65-70% average occupancy.”

Although high occupancy rates are comforting, they do not solve the problem caused by low revenue per available room (RevPAR). Visitor influx from a particular country can be seasonal, but dropping hotel prices at certain times to match the market is “quite challenging”, according to Henley. Onyx wants to increase its hotel prices across the board by 5-10 % to keep up with competition. A related topic of debate is still that there are far too many players in the market and the Bangkok hotel industry is quite fragmented.

Pornthip told OBG, “We have 70,000 rooms in Bangkok but if we hadn’t had internal problems we would, based on previous growth rates, have 24m-25m visitors a year by now and no hotel oversupply.” She said given the time lag between conception and delivery, some four or five years, that means many of the hotels coming on-line now were planned at a time of great stability.

Occupancy year-round across the board in Bangkok is currently about 45%, added Pornthip. Although RevPAR in Phuket is $101, with an average daily rate of $135, RevPAR in the capital is just over $40, although there were some indications in mid-2012 of it strengthening. “Building a hotel in Bangkok is sometimes a fad for very rich people,” added Pornthip.

SAMUI: If the hotel market in Bangkok was still smarting, Samui is showing the way it should be done. According to a Hotel Market Update report by C9 Hotelworks, a sector consultancy, demand for high-end accommodation in Samui had raised average room rates by 16% and increased occupancy by 6%. Bill Barnett, the managing director of C9 Hotelworks, gave two reasons for the figures. First was that the number of high-end hotels had risen. Second, the demand for upmarket accommodation was being driven by foreign visitors. Some 63% were from China, Korea and Japan while Germany brought in 14%, the UK 8% and Australia 7%.

The economy and budget hotels used by Thai visitors, however, were not sharing the good fortune and their figures went down. “The lack of a low-cost airline service to Samui has restrained demand,” said Barnett. According to C9 Hotelworks figures, by December 2011 the island had 17,204 rooms split among 448 hotels. Another 500 rooms are scheduled to come on-line over the next two to three years.

STAFF COSTS: Hotel managers saw a new law raising the minimum wage to BT300 ($9.57) a day as an unfair burden. The Thai Hotel Association (THA) failed to obtain an exemption for hotels on the grounds that service charges added up to BT8000 ($255.2) a month to hotel staff salaries. The minimum wage law affected seven areas – Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon and Phuket. Elsewhere the new minimum was raised from BT222 ($7.08) to BT227 (7.24). The BT300 level will be spread nationwide in 2013. To help ease the shock of paying higher wages, the Department of Labour Protection and Welfare cut social security premiums from 5% to 3% for the first half of 2012 and to 4% for the last six months.

THA legal advisor Samphan Panphat said a survey of 57 hotels showed the average salary, including service charges, was BT16,000 ($510.4) per month. Samphan said the value of the service charge monthly was about BT6000 ($191.4)for staff at medium-sized hotel and around BT8000 (255.2) in five-star hotels. This did not include tips. The survey excluded expatriate hoteliers, who earn around BT300,000 ($9570) to BT800,000 ($25,520), plus benefits such as accommodation.

NEW ATTRACTIONS: The general resistance to creating large-scale attractions in favour of selling Thailand’s culture and history seems to have softened in the past 12-18 months. TCT’s president, Piyaman Tejapaibul, announced a recommendation to build an ASEAN family theme park that the council calculates could bring in BT2trn ($63.8bn) in tourism-related earnings over five years. No specific suggestions were made for its location, other than proximity to Suvarnabhumi Airport. TCT said the whole development should be accompanied by hotels and shopping centres.

Another attraction for visitors would come from government investment in and promotion of a Royal Barge Museum in Bangkok close to the Grand Palace. “Light and sound shows should be staged along the Grand Palace’s walls to attract tourists at night,” said Piyaman.

Still on a mega-project theme, Turner Broadcasting System Asia-Pacific has said it intends to open a Cartoon Network-themed water park in Bang Saray, close to Pattaya. Cartoon Network AMAZONE is being developed with Amazon Falls, a Thailand resort developer.

Covering 14 acres, Cartoon Network AMAZONE is basically a rethink of the Amazon Falls Water Theme Park initially due to open in 2010. The new water park is now slated to open in 2013. The need for new attractions was emphasised to OBG by the Siam@Siam Hotel’s Sanya, who said, “Thailand needs to develop new destinations to attract more first-time and repeat visitors.”

NORTH-EAST: Inevitably with such a breadth of activity, some areas are moving more slowly than others. TCT says the north-east urgently needs big investments in a variety of attractions to bring in more tourists. “Only about 1% of all international visitors will tour the northeast and just 20% of Thai tourists visit the region,” a statement from TCT said. Piyaman believes the solution is to build iconic attractions to lure more people to the region and once there, provide the opportunity to explore Thailand’s culture and heritage.

PHUKET: KRC reported its views that Phuket’s tourism earnings for 2012 will produce BT140bn ($4.47bn) in revenue. It also forecast that the level of visitors would rise by some 12% to 7.4m and that, of these, some 86% would come from abroad. However, in relation to spending, the international tourists would punch above their collective weight and provide 94% of the income.

Phuket’s tourism earnings account for almost three-quarters of the total at all the main Andaman Coast resorts – Ranong, Krabi, Phang Nga and Trang. According to KRC, Phuket should develop a MICE marketing strategy as well as improve business tourism knowledge, management and personnel efficiency. It also said the much-vaunted Phuket Convention Centre project should be fast-tracked so that the island would be able to accommodate large-scale events.

Even without the convention centre, Phuket was a MICE star in 2012. In fact, the whole MICE market received a massive shot in the arm in 2012, with the staging of Amway China’s month-long convention on the island, which around 16,000 people attended, and the global gathering of Rotary International in Bangkok, which attracted some 35,000 delegates (see analysis). Sports tourism too, especially golf, is making a healthy contribution to the tourism sector and there is a move under way to stage an F1 Grand Prix in Thailand within the next two or three years (see analysis).

STRATEGY: There is a tendency among marketing planners (and consultants) to believe an annual change in direction is necessarily good. However, since the industry has thrived for the past few years without a close and consistent overview, it is difficult to see why. Nevertheless, TAT has announced that for the 2013 campaign, it will focus on promoting domestic tourism. Since the real money comes from foreigners – as the Samui hotel figures show – it is hard to see the rationale other than the laudable promotion of holidays for Thai citizens. According to the authority’s projections, the local market should generate 107.4m trips and BT453bn ($14.45bn) in revenue in 2013.

At the time of writing, TAT also revealed an action plan given the groovy title of DISCO – digital marketing, image building, sustainability, crystallisation and crisis management, and organisation management. The brief explanations appended to each heading have few details. Digital media was chosen as it is mostly used by young people, to whom TAT wants to appeal. For image building, TAT believes it is best done by showing adverts on global media, especially sports channels. The rest are shrouded in consultancy speak. Under S, “balancing economic gains from tourism with environmental wellness” is a noble aim. Explaining how this is to be achieved would be more useful. The C – “improving information management systems to monitor data on unexpected situations” – sounds like polishing a crystal ball.

OUTLOOK: Whether tourists are met with “amazing value for money” or “very cheap deals” – depending on how anyone sees the situation – presages the same future. It would be almost impossible for the Thai tourism sector not to grow, irrespective of what man or nature hurls at the country. The Chinese and Indian markets especially should grow organically, even without much effort. A carefully thought out strategy for each would ensure the sustainability of sources that could enrich the sector for decades. The UN World Tourism Organisation has estimated that China will account for about 100m outbound tourism trips by 2020. The question is not whether the currently expected 2m in Thailand will become 3m but how long it will take.

Meanwhile, as Santi Chudintra, the executive-director of TAT’s planning department, told OBG, the tourism authority’s arm is stretching into Latin America. “Brazil has a good growth rate,” he said. “The current number of tourists is only around 20,000, but it is growing by over 10%.” Nurturing the next generation of tourist sources will be as important as growing the current crop.

And underlying everything is another prediction from the WTTC. By 2022, it says global tourism will provide 328m jobs, or one in every 10 jobs on the planet. Thailand will rise to that enticement and succeed in claiming its share more easily if it sticks to its announced intent to educate its workforce in languages and in the requirements of its multinational foreign clientele.