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Evolution of New Tourism Feeder Markets in Thailand

By | May 18th, 2017 06.13 AM | View all posts in Blog Digital Marketing Marketing

TAT (Tourism Authority of Thailand) is showing great interest in tapping new potential markets. When the January 2017 statistics are compiled, Thailand expects to see high growth in visitor arrivals from Brazil, Russia, Argentina, Cambodia, and Saudi Arabia. These and other emerging markets are still small in size compared with the larger ones, however, the growth has opened the Thailand Government’s eyes towards new markets with stable economies which could potentially become the next major source of arrivals.

This article will focus on three major countries: Brazil, Saudi Arabia and South Africa. These three countries are chosen for a deeper analysis as they are as yet unexplored by campaign media and are growing fast, and most importantly the Thailand government’s efforts are being focused in these markets.

Saudi Arabia is the country with the highest growth in tourist arrivals between 2014 and 2016 with 72%, while Brazil is the second highest with 16%. Although South Africa has a comparatively smaller growth of 4% over the same period, it remains an important part of this analysis due to it bringing the highest volume of tourists among these three countries.

While currently, they may still make up a small percentage of the 30 million tourist arrivals in Thailand every year; they do possess immense potential for the future.

Annual Arrivals in Thailand from 2014 to 2016 in the months of January to August

 

Total number of tourist arrivals in Thailand in 2015

BRAZIL

Brazil managed to get the Thailand Tourism Minister’s attention when the numbers arriving in the country began to grow. As per the Minister, the interest in the Brazilian market is because they are a “quality tourist”, but what does that mean exactly? Apparently, they are ‘quality tourists’ as they stay longer in the country at an average of 13 days per tourist, while they also end up spending more.

To tap the importance of this new market and promote tourism for Thailand, TAT plans to open an office in Sao Paulo, the Brazilian city with the largest population. In addition to this, there are also plans to expand into neighboring countries in South America like Argentina – the second highest source of tourists from South America after Brazil.

It is still difficult to find any detailed research about the Brazilian market because they are as yet an infant market to Thailand, however, statistics from Sojern depict that tourists from Latin American countries tend to stay more at vacation destinations, which is a common theme with long haul trips.

 

Picture 1: Latin American Trip Duration

One of the explanations for the long stays in Thailand is the annual leave granted by the Brazilian government, which mandates that employees are to take a minimum of 10 consecutive days off within the maximum of 30 days offered within a year.

Graph 3: M-O-M Brazilian Tourists Arrivals in Thailand

 

Brazilians have a strong pattern to their arrivals in Thailand; November to January being the highest season due to the summer holidays and Christmas/New Year vacations, while there is a small increase during April that is likely due to the Easter period. June, through to August, tends to be the sleekest period for tourist arrivals in Thailand despite Brazil having a winter vacation in July, since this holiday period is rather short for long haul vacations.

SAUDI ARABIA + THE MIDDLE EAST

Saudi Arabia has the highest growth in arrivals to Thailand of all Middle Eastern countries. Despite travelling laws that prohibit Saudi Arabians to come to Thailand (Saudi Arabians may have problems renewing their passport if they visit Thailand for tourism) TAT expects a high number of tourists arriving in Thailand in 2017.

 

Graph 4: M-O-M Saudi Arabians Tourist Arrivals in Thailand

 

The biggest spenders in Thailand tend to be from the Middle East. The top three countries in terms of per capita spending were the UAE, Kuwait and Saudi Arabia. In 2015 visitors from these countries spent a daily average of BT6356 ($191.32), BT6228 ($187.46), and BT6224 ($187.34), respectively. The only other nations whose visitors spent more than BT6000 ($180.60) a day were Hong Kong (BT6131, $184.54) and Singapore (BT6001, $180.63).

Thailand welcomed 571,920 visitors from the Middle East region in 2015, with 163,960 visitors from the UAE, 90,012 from Oman, 85,597 from Iran and 71,000 from Kuwait. Referring to a study from 2014, Middle East visitors to Thailand stayed an average of 11.88 days and spent an average of 171$ US dollars daily.

A further point of interest for 2017 tourism trends is that Thailand could potentially get more tourists from the Middle East as a result of U.S. President Donald Trump’s entry ban on people from seven Muslim-majority countries, as stated by the head of the tourism authority.

While just over 2 percent of Thailand’s tourists came from the region in 2016, it is expected to see an increase of 8 percent in the first quarter of 2017 when compared to the year before, with medical tourism playing an important role in this growth.

“The Middle East is a big market for us, especially in the medical tourism sector. They may choose to visit Thailand more and this may also boost our sector,” Tourism Authority of Thailand Governor Yuthasak Supasorn, told Reuters.

The Middle East is seen by TAT as one of the most important markets to increase Thailand’s ‘quality tourism’ benchmark given this propensity for luxury and healthcare tourism. While the market may not be as big as others, 67 percent of the tourists repeat their visit to Thailand, making it one of their top travel destinations.

Mr. Yuthasak Supasorn, TAT Governor said, “Middle East travelers are renowned for recognizing quality and for seeking out family-friendly & luxury offerings, all of which Thailand is famous for. In terms of accommodation, healthcare, shopping and cultural experiences, Thailand’s standards are always high. By marketing the kingdom as a ‘Quality Leisure Destination through Thainess’, we are positioning ourselves as a unique nation that serves the needs of luxury lovers while also meeting their religious requirements.”

SOUTH AFRICA

TAT has set a target for 2017 of 34.1 million international visitors that will generate an estimated 1.81 trillion Baht (US$50 billion) – a 10 percent year-on-year increase – in international tourism receipts. Amongst these numbers, TAT projects an increase of 9.74 percent from the South Africa region. This is in line with the strategy of penetrating emerging source markets; such as, Eastern Europe, the Commonwealth of Independent States, the Middle East, South America and South Africa. On top of that, TAT along with Singapore Airlines will promote travel to Thailand for specific destinations which have become priority markets for the Thailand tourism market, namely Singapore, Australia, New Zealand and South Africa.

 

Mr. Yuthasak said, “Australia and New Zealand markets have long been important source markets for Thailand while the South Africa market has been growing in recent years, so this strategic MOU (a Memorandum of Understanding) will certainly help boost visitor numbers to Thailand.”

 

Graph 5: M-O-M South African Tourist Arrivals in Thailand

 

It is clearly evident to see that the pattern of arrivals to Thailand from South Africa is concentrated in December with a smaller peak in April. The lowest period is just after the holiday period ends; January and February being the months with the lowest number of arrivals.

Phuket & Bangkok continue to be popular choices – mostly due to ease of accessibility, especially as most airlines have direct flights from their hubs into these cities . However, Lesley Simpson, Manager of Tourism Authority of Thailand’s South Africa office, says there has been a marked change in South African travelers’ behavior with the higher income tourist groups looking for different experiences and new destinations to explore in Thailand.

“Phuket continues to be popular; however there is a definite increase in demand from higher-income tourists who are looking for new experiences other than Phuket, with ‘Off the Beaten track’ itineraries growing in popularity.”

Added to this, multiple-destination itineraries are also increasing, says Simpson, with tourists looking for “more cultural immersion” when it comes to Bangkok and Chiang Mai for instance.

But as a seasoned Thailand traveler, Simpson says, she firmly believes in the idea of Thailand being the destination that continues to draw travelers back, time after time.

CONCLUSION

TAT has been putting in great efforts to increase the number of arrivals in Thailand and is focusing on markets that were never approached before, like South America, Middle East, Eastern Europe and others. This would be an appropriate time to explore and target these new markets with different media platforms and channels. It is a great opportunity for hotel brands to be visible at each stage of the customer journey, and an equally opportune moment for us as an agency to present our solutions for this evolution of the market to our existing and future clients.

All three markets may still be small when compared with other feeder markets and countries currently targeted, but this gap in the market can be exploited smartly to bring in potential guests to book directly at the hotel level while this segment remains under the radar of OTA’s.

SOURCES

  • http://www.tatnews.org/event/thailand-travel-mart-plus-2017/
  • http://www.tatnews.org/thailands-strategy-target-high-quality-tourists-pays-off/
  • http://newdot2.samartmultimedia.com/home/listcontent/11/222/91
  • http://www.panrotas.com.br/noticia-turismo/wtm-latin-america/eventos/2015/04/tailandia-quer-ser-hub-para-brasileiros-na-asia_113282.html
  • http://www.nationmultimedia.com/news/travel/travel_news/30303493
  • https://www.forbes.com/sites/douggollan/2016/12/13/why-you-will-want-to-go-to-thailand-in-2017/#275b733d817a
  • http://www.pattayamail.com/travel/thailand-wooing-the-latin-america-market-raising-awareness-at-trade-events-37993
  • https://www.oxfordbusinessgroup.com/overview/resilient-rise-return-strong-growth-visitor-numbers-after-modest-decline
  • https://www.pata.org/tat-thailand-entices-the-middle-east-market-by-offering-a-quality-leisure-destination-through-thainess/#sthash.uJsh9XO0.dpuf
  • http://www.euronews.com/2017/01/30/us-ban-could-boost-middle-east-tourism-to-thailand-official-says
  • http://www.tatnews.org/tat-singapore-airlines-sign-mou-to-boost-travel-to-thailand/
  • http://www.traveller24.com/Explore/International-Getaways/thailand-budget-friendly-escapes-for-south-africans-20160515

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