Thai tourism grapples with price competition

Asian Economic News, June 7, 1999

BANGKOK, May 31 Kyodo

Thailand's tourism industry may soon find itself threatened by intense competition from neighboring countries selling themselves as tourist destinations in a bid to recover from the financial crisis, a senior government official said Monday. Pitak Indravitayanan, a minister in the Prime Minister's Office, said that although the other countries have less attractive places to visit, "what they can do is sell at very low prices."

Last year, tourist arrivals in Thailand increased 7.5% from the year before to 7.7 million. Several other destinations in Southeast Asia, however, saw a downturn during the same period. Singapore fell 13.3% last year, the Philippines 29.9%, and Malaysia 74.9%, according to the Tourism Authority of Thailand (TAT).

For this year, Thailand expects another big increase, of 7%, for a total number of visitors of 8.2 million, said Pitak who supervises the government's policies on tourism.

He credited much of the growth on a two-year "Amazing Thailand" campaign that ends Dec. 31.

Now a new plan for the year 2000 is being mapped out to sustain the trend and fend off competition from cheaper neighbors. The plan would apparently emphasize Thai culture and ecotourism.

Pitak said Thailand is also considering creating links with destinations around the Indian Ocean -- India, Sri Lanka, Bangladesh and Myanmar, according to the minister.

With Thailand at the center, the five countries would launch a joint tourism campaign by 2001. The plan would include new flight schedules linking Bangkok with destinations in the other countries, Pitak said.

Thailand is widely considered a model example of how a country can use tourism to offset the effects of a regional economic crisis. Tourism is now the country's largest single industry and the only one to have seen major growth since the recession began in mid-1997, said Seree Wangpaichitr, who heads TAT.

TAT expects the industry to create around 4 million jobs by the end of this year. By 2010, the number is predicted to grow to 5.6 million, or about 15% of total workforce of the country.