 Published in TDRI Quarterly Review Vol. 12 No. 2 June 1997, pp. 14-24 Editor: Belinda Fuller |
Published in TDRI Quarterly Review Vol. 12 No. 2 June 1997, pp. 14-24 Editor: Belinda Fuller |
Since Thailand launched "Visit Thailand Year" in l987, the number of foreign tourists visiting Thailand has increased dramatically, despite the Gulf War in l991. The period 1987-1996 can be termed the Golden Decade of Thai Tourism. Over this period, unprecedented economic growth of Thailand has also stimulated local tourism. By 1996, the number of trips taken by Thai tourists was estimated by a Thailand Development Research Institute (TDRI) study at 42.5 million.
A number of positive and interactive factors have contributed to making 1987-1996 the Golden Decade for Thai tourism. These include the end of the Cold War, the expansion of international trade and investment, the shift of the growth pole from the Atlantic rim to the Pacific rim (especially to the Asian Pacific-rim countries), the opening of new tourism destinations in the socialist countries in Thailand’s vicinity, technological progress in the aviation and telecommunications industries and others. These factors have combined to increase demand for tourism and at the same time increase the comfort as well as reduce the costs of long-haul travel.
Thailand has been well placed to benefit from these global changes. Recognizing the benefits tourism can bring, Thailand was an early starter compared to its neighbors in the region, in implementing active tourism campaigns. Its location as a half-way stopover between Europe and East Asia and Australia, and as a gateway to Indochina and Inner China provides a strategic position to offer a diversity of tourism packages to international tourists.
Within Thailand, the expansion of the middle income class following rapid economic growth has encouraged unforeseen growth in local tourism, especially the demand for nature-based attractions. Increases in income have also stimulated demand for foreign travels among the Thais, which in turn has reduced the net foreign exchange from tourism.
Concurrently, the rapidly growing manufacturing industry as well as government sponsored projects such as the Eastern and Southern Seaboard, have slowly penetrated the areas considered as prime locations for tourism. In addition to the stress on the environment, rapid increases in demand for tourism also competes for funding for infrastructure improvement. Given both demand and supply pressures, planning for tourism management in the next decade is therefore, a very challenging task.
The article reviews the trends in international tourism, traces the growth of Thai tourism, analyzes the structure of Thai tourism together with the income it generates, and evaluates the potential and competitiveness of the Thai tourism industry.
INTERNATIONAL TOURISM TRENDS
The World Tourism Organization reported 567 million international arrivals in 1995. By 2000 and 2010, this number is expected to reach 664 million and 937 million respectively, implying an average annual growth rate of 4.7 percent. The Asia-Pacific region tends to register higher growth than other regions.
The number of tourists visiting the Asia-Pacific is forecast to increase to 104 million arrivals in 2000 and 190 million in 2010, implying an average annual growth rate of 6.7 percent (Figure 1).
GROWTH AND STRUCTURE OF THAI TOURISM
In the last two decades, the number of international arrivals in Thailand has increased fivefold from 1.2 million arrivals in 1975 to about 7 million arrivals in 1995. This figure represents approximately 1 percent of the world’s total travels. This means that Thailand has ample opportunities to tap more new arrivals and expand its market.
Strategically located between destinations of great attractions of the West and the East and between those of the Northern and the Southern hemispheres, Thailand stands to gain from increased tourism in the region. As a member of the Association of Southeast Asian Nations (ASEAN), Thailand is well positioned to offer packaged services or to implement joint tourism promotion schemes which will yield increased mutual benefits, especially in areas where concurrent investments are necessary, e.g., sea-port facilities.
The number of international tourists visiting Thailand is projected to increase to 9.6 million arrivals in 2000 and a further 11.2 million arrivals in 2003 (Figure 2).
More staggering, however, is the forecast of the increase in the number of domestic tourists. Estimated at 47.3 million trips in l997, this figure is expected to almost double by the year 2003, reaching 97 million. By the end of this century, the tourism market in Thailand will be dominated by local tourists (Figure 3).
Thailand is no doubt one of the leading tourism destinations among the ASEAN members. However, the rate of increase in the number of international tourist arrivals in Thailand is relatively low compared with its ASEAN neighbors. By 2000 A.D., Indonesia will head the ASEAN list with the largest number of tourist-days (Figure 4).
Thailand’s Tourism Revenue
Thailand’s foreign exchange earning from international tourism in 1995 was about 14 percent of total export earnings and approximately 49 percent of the total income from the service sector. In 1995, foreign tourists in Thailand spent a total of 190,765 million baht. The foreign exchange income from international tourism has been greater than the country’s top ranking exports, which include garments, computer components and equipment, rice, jewelry, and plastic products (Figure 5).
Tourism receipts have improved. In 1985 Thailand ranked 22nd among the world’s top destinations in this category. By 1995 it had moved to 10th position. In the ranking for number of tourists Thailand moved up from 26th to 19th position in the same time period.
Tourism expenditure of domestic tourists has been growing rapidly. TDRI estimates show that local tourist expenditure will start to exceed foreign tourist expenditure in l998 (Figure 6) and is projected to reach 355,000 million baht in the year 2000 and 567,000 million baht in the year 2003. Internationally, Thailand’s performance in tourist receipts has improved more strikingly than in tourist arrivals.
In addition to increasing domestic tourism, the rapidly rising income levels of the Thais during the last decade has also fueled their quest for tourism destinations abroad. In 1995, 1.7 million Thai tourists costed the country 83,948 million baht in foreign exchange and reduced the tourism balance to 106,817 million baht (Figure 7). Thai Tourists are defined as ‘Thai nationals who travel abroad and stay at least overnight, but no longer than 90 days for voluntary leisure or business purposes.’ During the last seven years, the number of outbound tourists doubled, implying a growth rate of 15 percent per annum. If the current trend continues, Thailand’s tourism income surplus will turn into deficit in a not-so-distant future.
On the basis of past trends, a TDRI statistical model predicts a significant negative impact from international unrests and the devaluation of the Thai baht. If these two variables are unchanged, outbound tourism will grow at 14 percent annually. A drop of one percent of the real exchange rate of the Thai currency would, however, decrease the number of outbound tourism by 9,472 persons.
Interviews with 273 outbound tourists during office hours at the Don Muang airport during August 1996 revealed that:
STRUCTURAL CHANGES IN THAI TOURISM
In the past, tourism in Thailand was concentrated in and around Bangkok but this trend is changing. In 1987, Bangkok accounted for 76 percent of tourism income but in l994 this proportion was reduced to 37 percent (Figure 8). At present, five provinces viz., Bangkok, Phuket, Chon Buri-Pattaya, Chiang Mai, Songkhla-Hat Yai earn more than US$400 million a year from tourism (Figure 9). The opening of Indochina and improved access to these countries has also boosted income from tourism in the border towns and cities other than Hat Yai and Sungai Kolok which already benefit from border transactions with Malaysia.
Some significant changes that have taken place in the structure of foreign tourist arrivals during the past decade are noteworthy (Figure 10). Over the ten years between l985-1995, the proportion of foreign female tourists, first-time visitors, and the middle aged (45-54 years) who tend to be the big-spenders has increased. Although per capita spending at constant price has not increased dramatically, the average length of stay has increased quite significantly (Figure 11). Shopping expenditure has occupied the highest share and is higher than expenditure in accommodation (Figure 12). Since shopping in Thailand involves local manufacturers more than imported products, this seems to suggest that tourism income has spread widely to other areas of the Thai economy, notably the manufacturing sector. On the whole, it can be said that the structural changes have been in a positive direction.
TOURISM COMPETITIVENESS
The success of Thailand in tourism promotion has encouraged its neighbors in the ASEAN region and Indochina to share their tourist resources with the world. A few of these countries have also become successful to varying levels. This has increased the degree of tourism competitiveness in the Asia Pacific Region.
Tourism products are composite products, i.e., comprising of a bundle of goods and services covering three major groups: attractions, government management and the industry. Attractions include nature-based and historical tourism resources, culture, the taste of local food and the availability and quality of shopping. Local people are considered an attraction and can be an important component in the tourism industry. Government management comprises of the provision and management of infrastructure, sanitation, safety and other travel-related services such as visa issuance, immigration, customs and so on. The industry component includes transportation, accommodation, catering, guide services, etc.
The above components must be taken into account when evaluating the competitiveness of tourism. In September 1996, TDRI conducted a survey of 389 international tourists and 45 international travel agencies in order to rank Thailand in comparison with its competitors in the Asia-Pacific region in terms of the three components mentioned above. The results of this survey are discussed below.
In terms of overall appeal and efficiency, foreign tourists ranked Thailand third after Australia and Japan and followed by Singapore and Indonesia. Tourist agencies, however, ranked Thailand as second only to Australia.
Situated at the crossroads of the East and the West, and among the ancient cultures of India, Cambodia and China, Thailand boasts a unique and artistic blend of its own historical attractions as well as a mosaic heritage from the earlier kingdoms of the Khmer. At present, three historic places have been named World Heritage Sites by UNESCO. These are 1) Sukhothai – Sri Satchanalai – Kamphaeng Phet Historical Parks; 2) Ayutthaya Historic Park; and 3) Pa Tung Yai–Huai Kha Kaeng Wild Life Preservation Sanctuary. Thailand is also well known for its unique and well preserved customs and the gentleness of its people.
Among the 12 items listed under attractions, Thailand was ranked best in 5 categories: historical sites, culture, people, food and night-life. Moreover, it was ranked second in ethnic diversity after Indonesia, and after Australia in sun-sand-sea and adventures. Shopping in Thailand was considered third after Singapore and Hong Kong. Thailand’s new attraction—amusement and theme parks (Box 1)—ranked third owing to inadequate international marketing effort.
Government Management
An evaluation of government management revealed a number of areas for further improvement. Apart from visa application, Thailand did not rank first or rank highly in any other items on government management from tourism entry services (such as immigration and custom service) to broader management of infrastructure, inter- and intra-country communications, urban traffic, health and sanitation. Among the areas which need the greatest improvements are Bangkok’s traffic congestion, pollution control and tourist safety.
Among the eight items listed under industry competitiveness, Thailand ranked first in ‘value for money’ and hospitality. Japan tended to top in almost all categories under industry efficiency except ‘value for money’ and ranked second in hospitality after Thailand.
The results of the survey clearly indicate that Thailand has relied almost entirely on its natural and historical endowments to attract tourism. This makes the industry similar to mining or any extractive industry which is not likely to be sustainable without adequate investment together with prudent and careful management of the natural and historical resources.
GATEWAY TO ASIA
Strategically situated between Europe, Australia, Africa and Asia, Don Muang Airport in Bangkok boasts more than 400 flights per day. Thailand has been ranked by 45 international tourist agencies as the topmost gateway to Indochina, followed by Singapore and Hong Kong. Chiang Mai and Bangkok have also been ranked third as a gateway to Inner China, after Hong Kong and Singapore. At present, the Thai airline and Thai tourist industry have a great role in dispatching tourists to other Indochina destinations especially to Myanmar, Lao PDR and inner China through Yunnan and Sichuan. Enlarging joint tourism activities will require a number of improvements: better advertisement and public relations (especially regarding Thailand’s easy links to inner China and Tibet), promoting investments to construct the road network in Thailand known as the East-West and North-South Corridors, facilitating day trips for border tourism and easing the visa application process for travelers wishing to travel within the Indochina subregion.
NEW OPPORTUNITIES
New opportunities for Thailand to make capital of its existing infrastructure include the promotion of meetings, incentive, conventions and exhibition (MICE). These markets tend to generate a high expenditure per head per day, usually more than double of what an average international tourist will spend. The condition for a successful expansion of these markets is management, so that executives whose time is limited are able to use their time effectively, fruitfully and leisurely.
The cruise market is another high-value market but the volume of customers in this region is limited. A joint effort in simultaneous investments in sea ports of major tourist spots by ASEAN members could together lift the prospect of the industry.
Ecotourism does not usually bring in a high tourism income in total, or per capita, because it is not suitable for large volumes of tourists and stresses an economical use of resources. However, the encouragement of ecotourism is crucial for the sustainability of tourism resources in the long run, as this type of tourism educates tourists, students and tourism businesses to care for the environment.
Also promising is the development of participation tourism, whereby tourists will spend time enjoying, participating or practicing traditional culinary, arts and craft, for example Thai cooking, Thai flower arrangement, Thai dancing and so on.
LIMITATIONS AND CHALLENGES
Bangkok is known in the Thai language as "Krung Thep" or the "City of Angels." In 1996, it was voted as one of the top 25 favorite cities by 700,000 travelers who are members of the American Express. The uncontrolled growth of the city as a result of the economic boom has rendered some aspects of the city much less angelic, notably the traffic and the pollution. As Bangkok is a major center of communication for Thailand, it is important that it will not become a major bottleneck for future Thai tourism. A number of large scale mass transit projects aimed at solving the city’s traffic problem are under way and the major constructions are expected to be completed by 2011. Meanwhile, upgrading other gateways to Thailand will be a top priority.
The experience of Bangkok should be a good lesson for other major tourist cities; such as Phuket and Chiang Mai. Management capacities in major tourist cities will have to be upgraded so that the cities can cope with garbage and pollution. Human resource development for town planning and management is vital to the future development of the scenic cities.
The most challenging task is to reduce the impact human activities have on the tourism environment. Many tourism resources, for example near-shore marine ecology, are relatively fragile. The temptation of tourism income and lack of management often lead to these places receiving tourists beyond the carrying capacities of the sites. Pristine tourism resources have been introduced to too many tourists before appropriate investments in supporting management, infrastructure and amenities are made. In areas where the ecological system is fragile, controlling the number of tourists and limiting visits to certain seasons may have to be introduced.
It is evident that the bottleneck of Thai Tourism is not in the demand but in the supply side, notably management by the State. This means that the immediate tourism strategy is the Greening of Thai Tourism which includes management and control of carrying capacities, an increase of entry-exit points other than Bangkok, developing green areas for the urban population and de-emphasizing nature based tourism.
Finally, educating tourists and people in the tourism business is an important way to protect the environment. Educating young or child tourists will be especially rewarding.
PROVINCIAL TOURISM POTENTIAL
In the initial phase of tourism development, popular tourism sites are concentrated around the nation’s capital owing to easier access. In Thailand, the development of tourism has been relatively easy because Bangkok is not only the country’s modern capital but has also been endowed with unique historical sites and buildings. Pattaya, which became Thailand’s sea-side resort in the early years of tourism development, is situated within easy reach from Bangkok. As basic communications infrastructure improves over time, more and more tourist destinations have, and will become easily accessible.
Basic infrastructure in Thailand has improved substantially during the last decade, rendering easy access to a vast number of tourist sites. At the same time, border towns linking neighboring Indochinese countries have become new attractions. In order to facilitate private and public investments in tourism development, provinces in Thailand have been ranked according to their tourism potential. The tourism potential is determined by using 12 variables that serve as proxies for attractiveness, infrastructure and access, and include, for example, the number of tourism sites in the province and their significance, attractiveness, the number of visits paid by tourists, the availability of water, electricity, telephone lines, airport and seaport, density of roads, etc.
The provinces of Thailand have been ranked and grouped into three categories: provinces with high tourism potential, medium tourism potential and those with potential for activities other than tourism. Apart from the current five top tourism destinations, viz., Bangkok, Chon Buri (Pattaya), Phuket, Chiang Mai and Songkhla (Hat Yai), the other high potential provinces are:
ENVIRONMENTAL ISSUES
The environment is both the input and the sink for tourism. Tourism generally starts and cherishes in a pristine environment. In the early phase of tourism development nature plays an important role in attracting tourists. As demand for tourism grows unabated, too much investment is made to accommodate and feed tourists, while too little is spent on protecting the environment. It is not surprising then, that pristine and precious tourism resources are lost one after another and that often these losses are irreversible. The example of Pattaya is well known. Once a natural spot is degraded, substantial investments are needed to restore the environment.
Tourism could have an adverse impact on the environment because of over-crowding, pollution generated by tourists and businesses, encroachment of tourism sites by commercial and industrial interests, wanton vandalism and so on. However, most of these problems can be overcome by visionary planning, effective implementation of the plan, prudent management and local public participation in the monitoring of the status of the resources.
Over-utilization of tourism resources could be suicidal. Some tourism resources are ecologically fragile; for example, the coral reefs and some forest ecosystems. Studies conducted at Phi Phi, Samui and Similan islands and the Phu Kradung National Park indicate urgent need to control the number of tourists. Elsewhere, in Chiang Mai, Chiang Rai and Phetchaburi systematic studies of a number of popular attractions such as Phu Chee Fa, Doi Inthanon National Park and the Cha-am beach suggest the need to increase investment to extend their carrying capacity through improved management and regulation of tourist behavior.
ECOTOURISM: A NEW DIMENSION IN TOURISM
Ecotourism, which typically involves nature-based tourism, has been playing an increasingly important role in today’s environmental management. This is because ecotourism stresses the balance between nature and tourist activities and emphasizes minimal human impact on the environment.
Ecotourism can be defined as "a visit to any particular tourism area with the purpose to study, enjoy, and appreciate the scenery—natural and social—as well as the life style of the local people, based on knowledge about, and responsibility for, the ecological system of the area."
Controlling ecotourism within the limit of the carrying capacity of the environment can be accomplished through efficient management techniques, such as effective park wildlife management and imposing a limit on the number of visitors, or through the use of economic instruments, such as user charges (or entrance fees), various kinds of taxes, and tradable hunting permits.
Ecotourism is expected to provide incentives for conservation of natural areas. It should also provide resources, both financial and physical, for nature conservation, maintenance of environmental quality and improvement in biodiversity through breeding programs or gene banks, for example. Ecotourism can help promote environmental awareness and ethics among the visitors.
Ecotourism as a concept embodies three important factors: the promotion of public awareness about nature and conservation, tourist satisfaction and the participation of local communities who would receive a fair share of the tourism income. The policies of the TAT cover eight important issues, three of which concern ecotourism. They are: 1) Expansion of tourism sites to more remote areas to facilitate more equitable income distribution to the people of all regions; 2) Conservation and renovation of the Thai cultural heritage, natural resources and the environment so as to maintain the Thai identity; and 3) Encourage public participation in activities related to the development of tourism. Most importantly, ecotourism is a venue for changing tourists and tour operators’ behavior toward harmony with nature and the environment.
In National Parks—which are usually the main ecotourism sites—tourism activities are generally intense at long weekends and during the cool and dry season. In such times, the number of tourists is often beyond the physical carrying capacity of the recreation area of the Parks, resulting in overcrowding and even traffic jams. This is especially true of Parks located near urban centers; for example, the Doi Suthep and Doi Inthanon National Parks near the city of Chiang Mai.
The number of visitors to National Parks in Thailand has tripled in the past ten years. In 1985 there were 4,050,313 visitors to 54 National Parks. By 1995 this figure had risen to 12,047,542 in 104 National Parks. This clearly shows that more people now enjoy spending time in natural surroundings.
TDRI’s study of National Parks as an important component of ecotourism found that National Parks, especially those close to town such as Doi Suthep and Doi Inthanon National Parks are overused during public holidays (causing crowding and traffic jams) and are underused (scarcely any visitors) during the week.
TDRI surveys conducted among visitors of the following National Parks, 1) Khao Yai National Park, 2) Doi Inthanon National Park, and 3) Doi Suthep - Doi Pui National Park revealed that:
The notion that the entrance fee to National Parks is below the amount most visitors would be willing to pay suggests that business strategies, such as increasing entrance fees and charging for overnight permits could be implemented in accordance to the amount of facilities the Park provides. Most of the National Parks are losing potential income and lacking in strategies for monitoring visitors’ behavior. A system of deposit for bottles and food containers would help to monitor the amount of littering. Visitors must also be encouraged to use a larger area of the Park in order to minimize the damaging effects which crowds have on the natural environment.
SOCIAL ISSUES
Very often, tourism has been singled out as a culprit for cultural change, if not degradation. Face to face contacts with more affluent strangers has been thought to bring about wasteful and decadent consumerism and confusion toward the established role and relationship between genders. Much of such criticism tends to come from those who view culture as static and who tend to disregard the influence of today’s mass media, which perhaps constitute the strongest of all external influences. Others tend to consider culture as a set of relationships that are continuously evolving to correspond with changes in the economic and social structures of a society. Under this view, tourism can have positive effects in the conservation of traditions and culture as a response to intrusion of external culture or in response to new opportunities arising from the contacts. Changes per se are not always bad.
Past studies on the impact of tourism on culture revealed that although tourism is not the culprit in itself, it plays a catalytic role in affecting changes. Tourism opens an additional venue for the trade-off between economic, social and cultural consequences until a new form of relationship that best serves the evolving society emerges. In the case of the Bang Fai (Rocket Firing) Festival in the Northeastern provinces of Thailand, the changes in the way the parade is organized does not necessarily indicate social degradation for tourism purposes but is an open reflection of the changes in the status of the social groups or the communities.
Another case study of the elephant village in Surin (also in the Northeast) revealed a similar result. Thirty years ago, in this particular town, the TAT initiated the Elephant Festival based on the tradition of elephant round-up of the Kui tribe. Over time, elephant shows have become a profession of the Kui and the elephants and the Kui are seen roaming in the streets of Bangkok and other major tourist cities seeking income from shows and other elephant-related services. One can wonder if it is tourism that degraded the life of the Kui and their elephants.
An in-depth study of the Kui village revealed that tourism has created a brand name for the Kui village. Their village is known not only domestically, but also internationally as the elephant village. Elephant shows have become an income option for the Kui who traditionally depended on harvests of forest products. As their livelihood is threatened by deforestation, elephant shows have turned out to be their life saver. However, this economic option is not strong enough for them to remain in the village. As not enough tourists come to see the elephants in the village, the elephants will have to go to the tourists in the cities. Indeed the sustainability of the elephant festival depends on the possibility of earning extra tourism income elsewhere.
Nor can the Elephant Festival be said to have caused cultural degradation for the Kui. The Kui have never nurtured a closed society. The Festival allows the Kui to raise their social status in the Surin province and is in fact an opportunity for the Kui to be proud of themselves, as they have traditionally been considered as a lesser tribe than the Khmer or the Lao.
It seems that tourism may not have done enough to lift the standard of living of the Kui and especially the elephants in a sustained manner. With appropriate management and public relations, it may be possible to sustain the elephant village in the same way that the elephant camp in Mae Sa, Chiang Mai province, can be sustained by year-round tourism.
THE ROLE OF TOURISM AUTHORITY OF THAILAND
In the past, the major responsibilities of TAT were international marketing and promoting new tourism sites. It has won much international recognition as a dynamic marketing enterprise. It has also played an instrumental role in securing loans from Japan’s Overseas Economic Cooperation Fund (OECF) for upgrading tourism sites. In addition, social awareness and community participatory tourism projects have been initiated. As tourism develops rapidly, it is increasingly felt that a more active role in monitoring and coordinating investments in restoring and preventing tourism degradation is necessary.
TAT’s efforts in supply management date back to 1976 when the first five-year tourism plan was undertaken. It was followed by a number of plans for various regions and provinces, but most of the recommendations in these remained on paper.
Three factors were considered as the major constraints to the effective implementation of the plan. First, all the plans are suggestive and lacking in budgetary support. Secondly, there was no commitment from other agencies directly responsible for public investments and project monitoring. Thirdly tourism is not their mandate and investment in tourism resources means funds are drawn from projects for which those agencies are directly responsible. Even when the local authorities and communities are interested in developing and restoring local tourism sites, they have limited financial resources and expertise.
Sustainable tourism development not only requires the balancing of nature’s carrying capacity with consumptive use, but it also means that adequate funds and appropriate technology have to be secured for further investment and maintenance (and where possible, broadening) of the carrying capacity. As tourism development and restoration are long term processes, and require investment and cooperation from various agencies, a long-term target agreeable to all agencies involved will have to be set. In other words, a tourism vision shared by all concerned will have to be created. To make this vision a reality a budget has been outlined in Box 3.
| © Copyright 1997 Thailand Development Research Institute |