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Thai crackdown on budget tours hits Chinese New Year
January 12, 2017 / 6:11 AM / 10 months ago

Thai crackdown on budget tours hits Chinese New Year

BANGKOK (Reuters) - Chinese hotel bookings to Thailand for the Lunar New Year have tumbled as a crackdown on cheap package tours hits visitor numbers from its biggest source of holiday-makers.

Boat drivers wait for tourists at a pier at Chao Phraya River in Bangkok, Thailand, January 11, 2017. REUTERS/Athit Perawongmetha

Tourism is increasingly important for Thailand given that its economic growth lags other Southeast Asian economies. Between 2012 and 2016, the number of Chinese visitors trebled to nearly a third of all Thailand’s tourists by numbers and revenue.

But a crackdown on “zero-dollar” package tours in September sent that into reverse with little sign of recovery ahead of the Lunar New Year holiday Jan. 28 to Feb. 2

The D Land Holiday Co. Ltd caters to Chinese tourists. Bookings are only 300 for the Lunar New Year compared to 800 last year, its owner said.

“It’s the crackdown,” Ruengdet Amorndetphakdee told Reuters.

Other hotel groups, including Central Plaza Hotel Pcl, said Chinese bookings had fallen. Tristar Floating Restaurant Co. Ltd. has six cruise ships for Chinese visitors - now it operates only one.

Thailand’s tourism authority expects a 7.7 percent drop in Chinese tourists for the Lunar New Year this year, though offset by a 3.9 percent rise in tourists from elsewhere, and it sees Chinese tourist numbers rising back during 2017.

Zero-dollar tourists pay everything up front.

Operators cut any cost they can while tourists are sometimes cajoled into buying over-priced souvenirs so the company earns a commission. Those are the practices Thailand wants to stop.

But the government’s insistence on a minimum 1,000 baht (23 pounds)per night charge for package tourists had made Thailand uncompetitive for many Chinese visitors, tour operators say.

“We weren’t prepared for this,” Chanapan Kaewklachaiyawuth, secretary-general of Thai-Chinese Tourism Alliance Association told Reuters.

Chinese tourists wait for a sightseeing boat at a pier at Chao Phraya River in Bangkok, Thailand, January 11, 2017. REUTERS/Athit Perawongmetha

Chinese tourist numbers fell 30 percent in November from the year before to the lowest monthly total in more than two years. At least part of that drop-off was due to a one-month mourning period following the Oct. 13th death of King Bhumibol Adulyadej, tour operators say.

REBOUND FORECAST

Thailand nonetheless forecasts that Chinese tourist numbers will recover to reach nine million by the end of 2017 to just top last year’s total.

Slideshow (6 Images)

By targeting wealthier Chinese travellers, revenue from China will increase over 14 percent this year to around 500 billion baht, according to Tourism Authority of Thailand Governor Yuthasak Supasorn.

“It’s certainly a change, but Thai operators are able to adapt,” he told Reuters.

Overall, Thailand expects growth in tourist revenue of 8.5 percent to nearly $50 billion - more than double the overall economic growth rate forecast.

Although Chinese visitor numbers have fallen, the number of travellers from elsewhere has continued to rise. Central Plaza said increased bookings from Russia had helped despite Chinese cancellations.

Tristar Floating Restaurant Co., Ltd. is looking to new markets in Southeast Asia such as Indonesia, Vietnam, the Philippines and Myanmar, company president Vichai Tanasopananont told Reuters television.

“Cheap packages don’t yield high income and businesses will need to adapt,” said Thanavath Phonvichai, an economic professor at University of Thai Chamber of Commerce. “It will gradually improve.”

For those whose livelihoods have been affected, improvement cannot come soon enough.

“My income has dropped 50 percent,” complained Naruja Nakthong, a 27 year-old souvenir shop owner in the historic Thonburi area of Bangkok. “It might be good if we have tourists who spend more. They might shop and buy more stuff but I haven’t seen them here yet.”

Additional reporting by Manunphattr Dhanananphorn and Jutarat Skulpichetrat; Editingby Bill Tarrant

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