Thailand Must Diversify its Tourism to Keep it Resilient

Thailand Tourism Forum 2020 took place on Monday in Bangkok highlighted the necessity for Thailand tourism to diversify its source markets, its products and to go even more sustainable if it wants to turn around negative trends seen in 2019

From left: Ms. Khongchanok Paepipatmongkol, Innovation Project Manager, Fuchsia MuangThai Life Assurance; Mr. Jesper Palmqvist, Area Director – Asia Pacific, STR; Mr. Bill Bensley, Creative Director, BENSLEY; Mr. Bonn Paramacharoenroj, Associate Director of Business Development, YOO Worldwide.

Thailand Tourism Forum 2020 took place on Monday in Bangkok highlighted the necessity for Thailand tourism to diversify its source markets, its products and to go even more sustainable if it wants to turn around negative trends seen in 2019. The Kingdom will also have to get used to slower growth in the next years to come…

Thailand Tourism Forum 2020 was less bullish than former years regarding the evolution of tourism demand. This was confirmed by Jesper Palmqvist, Analyst at STR in Singapore. The growth in hotel rooms supply seems irresistible but the demand is now stagnating. And it could further stagnate if Thailand does not rapidly look at growing in a more sustainable way its tourism industry.

Last year saw the Yearly RevPAR (Revenue per Available Room) declining across the country by 5.6%. Southern destinations suffered the most according to STR data with Krabi RevPAR down by 18.3%, followed by Samui down 12.8%, Phuket down 10.3%, Chiang Mai by 8.4%, Pattaya by 4%, Hua Hin by 2.3% and Bangkok down by 1.8%. Bangkok should, however, revert the trend in 2020.

But more worrying is the unstoppable growth in supply which is having a destructive effect. “While Thailand continues to focus on the elusive target of 40 million international visitors, the industry continues to cannibalise itself by degrading and destroying the very environment that makes it so attractive. Alarm bells are ringing and we want TTF 2020 to be the wake-up call the country needs to stop it sleepwalking into disaster,” criticised Bill Barnett, Managing Director of C9 Hotelworks, the co-organiser of TTF 2020.

STR Jasper Palmqvist revealed the data behind the decisions; according to STR, there are more than 50,000 new hotel rooms on the way in Thailand, including 15,000 in Bangkok alone. This development surge will put huge pressure on land and resources in the country.

They are currently a certain number of issues which put in jeopardy the growth of arrivals to the Kingdom. According to Jesper Palmqvist, the strong Baht exchange rate, economic uncertainties as well as problems specifically inherent to Thailand put a cast on tourism.

The slowdown in the growth of arrivals from China has been partially offset by increases from India, Japan, Korea and the USA. Thailand tries to broaden the arrivals base and build on MICE and events. The new norm for Thailand tourism seems to be arrivals growth of 3-5% rather than a double-digit. For Palmqvist, this is also a sign of tourism maturity for the Kingdom.