Thailand’s tourism industry experienced a setback during last month’s Labour Day holiday, with the Chinese market failing to meet expectations despite relaxed visa policies.
The country, a pioneer in offering visa-free entry for Chinese tourists as a marketing tool – launched in September 2023 – saw a five per cent decline in arrivals compared to the same period in 2019. This stands in stark contrast to fellow Asian destinations like Malaysia (33 per cent growth) and Singapore (21 per cent growth) that implemented similar visa-free programmes.
Additionally, ForwardKeys reported a staggering 212 per cent increase in Chinese tourists visiting Kazakhstan, a rising destination for the Chinese in its analysis of Chinese international departures from April 27 to May 5.
Chuwit Sirivajjakul, executive director for East Asia region at the Tourism Authority of Thailand (TAT), attributed this unexpected outcome to a new challenge: price wars from Asian neighbours.
“Take for example, Japan – traditionally, they haven’t competed with us on price,” Sirivajjakul explained. “Now, they’re leveraging their lower cost of living and favourable exchange rates to attract Chinese travellers with budget-friendly travel packages.”
He said Japan’s geographical proximity to China also allows for cheaper airfares which appeal to budget sensitive travellers.
Prior to the pandemic, Chinese tourists comprised a significant portion of Thailand’s tourism industry, accounting for roughly 25 per cent of all arrivals (10 million out of 40 million in 2019). However, post-lockdown recovery has been hampered by traveller safety concerns, a weakened yuan, and China’s focus on promoting domestic tourism.
Recognising the current limitations of the Chinese market, Chattan Kunjara Na Ayudhya, TAT’s deputy governor for international marketing Asia and South Pacific, advocates for a strategic shift, suggesting that “rather than doubling down on a struggling market, it’s time to explore other promising source markets and growing segments”.
He highlighted India’s rapid rise, climbing from fifth to third place in tourist arrivals this year, with over 868,000 visitors to date.
“India holds immense potential,” Na Ayudhya emphasised, adding that while “India can’t replace China’s volume entirely, any key market growth is beneficial and influences our marketing strategy”. He also pointed out that the Tourism Roadshow to India in August will help capitalise on this trend.
He shared that the Indian market has responded well to visa-free offerings, which started in November 2023 and have been extended another six months as of May 11.
“The visa-free scheme has extended Indian travel demand throughout the year. India, which traditionally saw a dip in arrivals during the mid-year period, has now emerged as our third-largest source market,” he noted.
