why has tourism in thailand increased

Reimagining travel: Thailand tourism after the COVID-19 pandemic

Thailand’s economy is reliant on international tourism, a once-flourishing sector that has been impacted by pandemic restrictions. But there have been continual government efforts to boost domestic travel, and measures to support returning international demand after Thailand began reopening to vaccinated international travelers from 63 countries on November 1, 2021. 1 Pasika Khernamnuoy and Katie Silver, “Thailand reopens to vaccinated tourists from over 60 nations,” BBC, November 1 2021, bbc.com. Even as the world addresses emerging variants of the virus, Thailand’s lessons can act as a guide for other tourism-dependent countries facing similar dilemmas as they prepare for the resurgence of international travel.

A heavy blow, adjustments needed to support recovery

In 2019, Thailand ranked eighth globally in international tourist arrivals, with China being a key source market. 2 United Nations World Tourism Organization (UNWTO). Thailand recorded a high of 40 million visitors in 2019, with the top three spending categories for inbound visitors that year being in accommodation (28 percent), shopping (24 percent of spending), and food and beverages (21 percent). 3 “Summary of tourism income and expenses from foreign tourists entering Thailand in 2019,” Ministry of Tourism & Sports, October 28, 2020, mots.go.th. Furthermore, the Thai tourism sector created 36 million jobs between 2014 and 2019. 4 “Dashboard SME big data,” Office of Small and Medium Enterprises Promotion, accessed October 2021, sme.go.th.

Unfortunately, the pandemic and related restrictions have hit travel particularly hard, as international travel plunged. Passengers on international flights to Thailand dropped by 95 percent in September 2021, compared to the previous year. Hotels, in turn, only filled 9 percent of their rooms (Exhibit 1).

This decline in visitors had an outsize impact on tourism spending, as international travelers spent significantly more than their local counterparts (Exhibit 2). For instance, in 2019, international travelers made up 33 percent of overall travelers in Thailand yet accounted for almost 60 percent of all tourism spending—international tourists spent $1,543 per traveler on average, compared to $152 by domestic travelers. 5 “Tourism statistics 2019,” Ministry of Tourism & Sports, accessed October 2021, mots.go.th. This drop in expenditure undoubtedly caused a ripple effect on Thailand’s food and beverage retail industries, which include 1.2 million small and medium-size enterprises (SMEs). 6 “How to start business,” Office of Small and Medium Enterprises Promotion, accessed October 2021, sme.go.th.

Recovery appears to be on the horizon for Thailand. Assuming virus recurrence, slow long-term growth, muted world recovery, and minimal changes to global tourism strategies, Thailand’s tourism sector could only recover to pre-crisis levels by 2024.

Given that Thailand’s GDP relies significantly on foreign tourism income, the domestic tourism market alone is not sufficient to bring the nation’s tourism revenue back to 2019 figures; the sector’s recovery would depend on a resurgence in international travel (Exhibit 3). Globally, this recovery scenario would likely reshape the landscape of the world’s travel industry and create a strong imperative for both the public and private sectors to act to ensure the industry’s survival.

Efforts to stimulate tourism

Thailand has deployed various efforts to compensate for the loss of inbound tourism. Given that for most of the first quarter of 2020, Thailand saw less than 1,000 daily COVID-19 cases nationwide, with cases not rising above 4,000 until November 2020, domestic tourism was still a viable option for travelers. The Thai government’s attempt to boost domestic travel took the form of providing subsidies for hotel stays and flights for travelers. The government also rolled out measures to stimulate international travel to Thailand’s beach destinations and attract high-end travelers from international markets.

Travel together—stimulating domestic tourism

In August 2020, the Thai government launched the Rao Tiew Duay Gun (We Travel Together) program, where it set aside a budget of $640 million to help boost domestic tourism. 7 “Thailand approves domestic tourism package worth 22.4 billion baht,” Tourism Authority of Thailand Newsroom, June 17, 2020, tatnews.org.

The government subsidized a total of six million nights of hotel accommodation at 40 percent of normal room rates. The subsidy was capped at 3,000 baht ($100) per night for up to five nights. Subsidies for other services, including food, were capped at 600 baht ($20) per room per night. This subsidy was initially limited to facilities outside tourists’ home provinces, but that restriction was lifted in the second phase of the rollout in December 2020. In addition, domestic tourists traveling by air would qualify for a government refund of 40 percent of the ticket price. This was capped at 1,000 baht ($32) per seat, with a quota of 2 million seats.

The program reached its total quota of six million hotel-room nights in February 2021, seven months after its launch. 8 “FPO reveals the money we travel together, 20,000 million,” Bangkok Business News , January 4, 2021, bangkokbiznews.com; “‘We travel together’ the parade has already reserved 6 million rights. But there are still 1.35 million rights left!” Bangkok Business News , February 8, 2021, bangkokbiznews.com. During that time, at least $1 billion had been added to the Thai economy. 9 “NESDB-TAT has not yet knocked on ‘we travel together, phase 3,’” Thai PBS News , March 16, 2021, news.thaipbs.or.th.

Many operators grasped this opportunity, shifted their focus to the domestic market, and attracted local travelers by promoting flights and hotels in collaboration with the We Travel Together campaign. Destinations that once served mainly international visitors welcomed more local travelers, which has helped their economies wade through this difficult period. Many luxury hotels offered deep discounts and attractive promotions to capture the medium- to high-spend domestic-tourist segment.

These efforts to stimulate domestic travel were temporarily paused as COVID-19 cases reached a new high in July 2021. Domestic air travel in and out of red zones, including Bangkok, was banned during July to September 2021 in response to the nation’s effort to control the spread of the Delta variant. 10 “Domestic flight bans in force,” Bangkok Post , July 21, 2021, bangkokpost.com. Phase three of the We Travel Together campaign was paused during the same period, but resumed in October 2021.

Bringing back international travelers with the ‘sandbox’ approach

Despite promotional efforts for domestic travel, Thailand’s total revenue from domestic travel still saw a significant dip. The country’s revenue from domestic travel dropped from $34.5 billion to $15.4 billion in 2020. An increase in domestic spending alone would not compensate for the impact of the pandemic on the Thai economy. The country has largely been dependent on international markets, which represented about $62 billion or 60 percent of total tourism spend in 2019. 11 “Tourism statistics 2019,” Ministry of Tourism & Sports, accessed October 2021, mots.go.th.

In response, Thailand launched the “Phuket Sandbox” in July 2021, an effort to recapture demand from international travelers. The initiative offered fully vaccinated travelers (between 14 days and one year before their travel date) exemption from quarantine, provided they remain in Phuket for at least 14 days before traveling to other parts of Thailand. 12 “General information—Phuket Sandbox,” Tourism Authority of Thailand Newsroom, October 1, 2021, tatnews.org. Additionally, travelers’ stay in Phuket was restricted to accommodation establishments that have been certified by the Safety & Health Administration of the Thai government. Visitors staying in Phuket for less than 14 days were permitted to leave Phuket only if their destination was outside of Thailand.

The model hoped to draw visitors during the year-end season in Asia, Europe, and America—all key origin markets for Thailand. Several other reopening plans followed, including the “Samui Plus” and “Andaman Sandbox” plans. 13 “Samui Plus plan to generate B180m,” Bangkok Post , July 18, 2021, bangkokpost.com; “‘Adaman Sandbox’ next on govt agenda,” Bangkok Post , July 21, 2021, bangkokpost.com. Together, the schemes created a network of reopened destinations, which hoped to position Thailand as an attractive destination for international and domestic travelers alike.

The economic uplift from the Phuket Sandbox were moderate. In the period from July 1 to August 31, Phuket welcomed about 26,400 visitors, who were estimated to have spent at least $48.8 million while staying on the resort island (Exhibit 4). 14 “Phuket Sandbox generates B1,634m in two months,” Bangkok Post , September 5, 2021, bangkokpost.com.

A nationwide rise in COVID-19 infection rates in the same period meant that the government had to reconsider social distancing and other measures to minimize risk to visitors.

In any case, Thailand has gathered its learnings from the “sandbox” approach and proceeded to reopen the country to receive international travelers. As of November 1, 2021, the Thai government commenced a phased reopening of the country, allowing fully vaccinated tourists from 63 low-risk countries to visit with one day of quarantine, provided they pass a COVID-19 test upon arrival. The government has also replaced the slow-paced Certificate of Entry (COE) system with the Thailand Pass System, in an effort to make the documentation process of travelers entering Thailand more efficient than the COE application. 15 “Thailand pass,” ThaiEmbassy.com, accessed on November 1, 2021, thaiembassy.com.

The program also expanded the number of provinces open to international visitors to 17, including major tourism destinations such as Bangkok and Chiang Mai. Subject to readiness, additional major provinces are expected to reopen from December 2021 onwards. To ensure visitor safety, some COVID-19 measures remain in place, although most businesses have been allowed to reopen and nighttime curfews have been lifted in almost every province. The reopening has welcomed tourists globally, with top visitors coming from Thailand’s key source markets—the United States, Germany, and the United Kingdom (Exhibit 5).

Attracting ‘quality’ travelers, with an eye on new markets

Pre-COVID-19, China was one of the main contributors to Thailand’s tourism income, accounting for more than 27 percent of 2019 tourism receipts. 16 “Tourism statistics 2019,” Ministry of Tourism & Sports, accessed October 2021, mots.go.th. Given the current prudent approach of the Chinese government toward international travel, the road of return for Chinese visitors to Thailand will be a long one. China’s international-flight seat capacity and passenger numbers remain down by 95 percent  compared to pre-COVID-19 levels, and stringent public-health measures for international travel remain in place. Thailand, therefore, needs to reimagine its strategy and try to capture new sources of international travelers in markets where there are more rapid recoveries of international travel demand.

The situation may change rapidly, particularly in these volatile times; closely monitoring the revival of these top source markets, particularly around the country’s stance towards viral control measures, will help industry players plan their recovery efforts and capture untapped value.

Recognizing these shifting traveler trends, and the resilient nature of premium traveler groups, the Thai government is striving to attract “quality” travelers from these source countries. Measures include revisiting and relaxing certain regulations—such as yachting regulations and taxes on personal belongings and luxury goods—to improve and stimulate the premium travel experience.

Taking this a step further, the Thai government is preparing to launch a long-term residence program to attract foreigners to the country through new Long-Term Resident (LTR) visas (up to ten years), tax and investment incentives, foreigners’ residential property ownership relaxations, and more. The program will target four key personas: the wealthy global citizen, the wealthy retiree, the work-from-Thailand professional, and the high-skilled professional. The country’s ambition is to welcome over one million of these target personas and generate over 1 trillion baht in domestic spending in the next five years, beginning in 2022.

Emerging from the storm: Actions for travel and tourism

Thailand has put innovative measures in place to help its vitally important travel and tourism sector wade through the COVID-19 crisis. As new variants of the coronavirus emerge, health and safety should remain the foremost priority as countries contemplate their travel programs. Once it is safe to do so, there are actions that stakeholders can take to steer into and thrive within the next normal.

Adjust offerings and pricing strategy to meet market needs. Hotels, tour operators, restaurants, and transport providers could look to explore opportunities to offer services and products that meet new travel demands.

Bundle products, such as hotel and flights, offer upselling and cross-selling opportunities as well as a diversified revenue stream.

Travel companies could also devise and deploy targeted pricing strategies to drive long-term loyalty and stickiness for when international travel fully returns. Given the phased reopening of popular provinces in Thailand, and the inclusion of more visitors from select countries on a quarantine-exemption list, travel companies can leverage data on traveler behaviors to set the right prices and conduct targeted campaigns by country of origin and destination.

Explore opportunities within the mass-affluent traveler segment. Focusing on premium travel experiences may be a viable strategy in some markets, but it may have limited impact in Thailand. Given that the top three inbound visitor-spending categories in 2019 were shopping, accommodations, and food, targeting the high-end market would only benefit a small segment of travel companies and would not contribute to the country’s economic recovery across all relevant sectors.

By promoting more differentiated travel experiences and attractions such as ecotourism and cultural tourism, which are naturally location based and sought after by younger mass-affluent travelers, operators could contribute to greater aviation and transportation use in Thailand.

Form partnerships across the travel ecosystem. As a result of the government’s We Travel Together program, which subsidizes travel through a digital redemption mechanism (the Pao Tang app), the country has seen an estimated 30 to 40 million users join and use the platform. 17 Krung Thai Bank equity research, April 2021. This has created an opportunity for domestic consumer data to be collected and analyzed to provide more personalized tourism offerings that consumers are more likely to consider spending on.

Taking this a step further, tour operators, restaurants, and shopping malls might link up, creating a connected ecosystem where a traveler could be strategically engaged through multiple personalized services, products, and loyalty programs along their journeys.

Expand the network of destinations. There is an opportunity to offer travelers a wider variety of destinations in first- and second-tier cities, such as Nakhon Si Thammarat, Chiang Rai, Nakhon Nayok, Ratchaburi, and Loei. These locations have been able to sustain visitor numbers at a relatively low rate of decline, largely due to domestic travelers looking for new places to visit during international travel restrictions.

With a boost in promotion and appropriate infrastructure investment, tourism will not only contribute to the survival of the industry in these cities, but it could also lead to enduring tourist appeal that extends beyond domestic traveler groups, especially with the gradual return of international visitors. For example, the Tourism Authority of Thailand is collaborating with airlines to offer direct flights to alternative second-tier tourism destinations.

Leverage digital to connect, attract, and retain travelers. Travel companies can digitalize the customer journey from check-in through payment, including the provision of maps and information. Traveler preferences can be tracked in real time to design better and more relevant offerings, while digital booking channels can target different customer segments. Digital marketing can also entice visitors to return and to share their experiences on social media.

For instance, the Tourism Council of Thailand is working with Singapore-based IsWhere to deploy a digital-marketing platform for tourism business operators to better connect and engage with a potentially sizeable number of domestic and international travelers; the platform’s prior partnership with a major tech company has enabled it to reach 600 million digital customers worldwide.

Reimagine support needed by industry players. In the short term, industry players would need stimulus, support, and guidance on health and safety policies from the government. In the medium term, small and medium-size players would benefit from the government’s support in adjusting to online travel services and digital marketing, such as a one-stop digital platform to connect industry players with international travelers.

As such, the Tourism Authority of Thailand announced its plan to establish a private digital firm to work on creating a digital infrastructure for tourism, utilize big data in the industry, and potentially introduce blockchain-based e-vouchers and nonfungible tokens to provide tourism operators with more options for reaching travelers online and offline.

In the wake of the COVID-19 pandemic, tourism recovery in Thailand will be gradual and complex and requires varied strategies from both industry and government. As the world eagerly prepares for the eventual revival of international travel, Thailand and other countries can draw important lessons from its experience during this difficult interim period.

Steve Saxon is a partner in McKinsey’s Shenzhen office; Jan Sodprasert is a partner in the Bangkok office, where Voramon Sucharitakul is an associate partner.

The authors wish to thank Margaux Constantin , Kamila Dolinska, Steffen Köpke, Alan Laichareonsup, Jason Li, Georgie Songsantiphap, and Jackey Yu for their contributions to this article.

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Decoding Thailand’s Tourism Success Story

Notwithstanding the recent slowdown, tourism in Thailand has shown continued strength in terms of the number of visitors and their spending. From Krabi in the south to Chiang Mai in the north, most cities are busy serving millions of tourists every year.

With an average growth rate of 13 percent per annum since 2010, and a contribution of around 15 percent of GDP, tourism has become an important engine of growth for the Thai economy. Thailand has evolved into a major regional tourism hub, and was ranked the world’s ninth most visited country in 2017 by the United Nations’ World Tourism Organization (UNWTO), receiving about 35 million tourists in that year.

What then, are some of the ingredients for Thailand’s success in this area, and what can be done to promote sustainable tourism further?

Three Key Ingredients of Success

The impressive progress witnessed in the Thai tourism industry did not come about overnight.

A recent report by the ASEAN+3 Macroeconomic Research Office sheds light on three key factors that have contributed.

First, few countries are as naturally well-endowed as Thailand as a tourist destination. The tourism industry is strongly supported by its hospitality, infrastructure, affordable accommodation, and variety of attractions – most notably its beautiful beaches, temples and palaces, historical sites, eco-attractions, and cuisines. This makes for a complete, developed, tourism market.

Second, Thailand’s tourism policies have been well-planned and executed. The National Tourism Development Plan 2012-2016 was developed after tourism was added to the national development agenda in 2009. Much effort has been put into renovating tourism sites, building infrastructure, enhancing human capital, and developing appropriate rules and regulations. Additionally, the government continues to aim for quality tourism through proactive marketing strategies. They promoted as the city for international meetings and exhibitions while striving to improve conference and hospitality facilities, as well as the safety and hygiene standards since it also aims to become a hub for medical tourism. In addition, a relatively lenient visa regime such as visa on arrivals, has helped to attract tourists. Of late, the government has also attended to details like providing a special immigration queue at airports for Chinese tourists, who make up more than 25 percent of total visitors to the country.

Third, Thailand has embraced infrastructure as an important enabler. With air transportation accounting for over 80 percent of tourist arrivals, the government has been constantly expanding and upgrading its airports and their connectivity to other cities, helping the country to become a regional air transportation hub. In addition, the government has also targeted other areas that are yet to become popular, such as river tourism, for future development. This expansion can support its Secondary City Strategy, which includes , and attract foreign investors.

  Challenges Facing the Industry

However, the rapid growth in tourism is posing some challenges for Thailand, one of which is overcrowding. For example, Phuket sees an average of around 650,000 to 750,000 tourist arrivals per month, while the local population is only about 550,000. Overcrowding generally leads to issues such as environmental pollution and safety concerns. As more people visit the popular sites, the amount of waste and pollution increases. In fact, some islands in Thailand and the Philippines were recently closed to tourists because of this. Usually, the pollution is caused by poor enforcement of environmental regulations against dumping sewage into the sea.

Overcrowding can also lead to safety problems, especially during peak seasons. In the past three years, Thailand has experienced several ferry accidents. Most recently, in July 2018, a tourist boat capsized in Phuket, resulting in 27 dead and dozens missing. According to the local government, the accident was caused by overcrowding in the boat and poor safety measures.

Thailand should strive to upgrade from traditional tourism to high value-added tourism as it implements Thailand 4.0, a technology-driven initiative that seeks to transform cities such as Phuket, Chiang Mai, Khon Kaen and Bangkok into technology hubs. In addition, the government has established a National Smart City Committee, comprising various agencies, including the Digital Economy Promotion Agency (DEPA), which initiated a project that provides high speed internet infrastructure and free Wi-Fi for smart city development. By leveraging on this initiative, Thailand could further enhance the enabling infrastructure that improves the competitiveness of its tourism sector.

There is no simple formula to tackling challenges facing the tourism industry, including overcrowding, pollution, and safety concerns. The government needs a long-term strategy that involves all stakeholders, to promote tourism that is sustainable and does not sacrifice the environment or safety while moving the industry up the value chain so that it can continue to be a vibrant source of growth for the economy in the coming years.

[1] The 55 secondary cities include Chiang Rai, Phitsanulok, Tak, Sukhotai, and Lamphun in the North; Ubon Ratchathani, Nong Khai, Sa Kaeo, Phetchabun and Mikdahan in the Northeast; Samut Songkhram, Chainat, Ang Thong, Uthai Thani in central Thailand; and Chumphon, Ranong, Narathiwat, Yala and Pattani in the South.

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FILE PHOTO: A woman works in a restaurant in Bangkok, Thailand September 11, 2023. Thailand's new government approved a raft of policies to lower the cost of living, suspend farmers' debts, draw more tourists and boost incomes. REUTERS/Jorge Silva/File Photo

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BANGKOK : Thailand's employment rose 1.7 per cent in the final quarter of 2023 from a year earlier, helped by the tourism sector, after a 1.3 per cent year-on-year increase in the previous quarter, the state planning agency said on Monday.

Jobs in the hotel and restaurant sector rose 8 per cent annually in the final quarter of 2023 as the number of tourists increased, the National Economic and Social Development Council said in a statement.

The jobless rate dropped to 0.81 per cent in the October-December period versus 0.99 per cent in the prior three months, the agency said.

Thailand's definition of unemployment is narrow, however, and counts as jobless those who do not work a single hour in a surveyed week. Analysts say the figures do not catch Thailand's significant unofficial economy.

In the fourth quarter of 2023, Thailand had a workforce of 40.7 million, up from 40.5 million in the prior quarter, the planning agency said.

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After reopening, Thailand’s battered tourism struggles to rebuild

Authorities hope 5 to 15 million visitors will visit the country this year, down from 40 million before the pandemic.

Krabi, Thailand –  At Railay Beach, an Instagrammers’ favourite known for its wide, warm sands bookended by limestone cliffs, 23-year-old Londoner Becca sips coffee and savours the return of Thai backpacking following a recent easing of entry requirements.

“We saved our money, quit work and travelled here,” she told Al Jazeera of her months-long trip with friends, which was impossible during the last two years lost to the pandemic.

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Thailand was one of the first places in the world to reopen to tourists late last year, but under a confusing web of rules – including seven-day quarantine – travellers complained the small print failed to match the big announcements.

Meanwhile, horror stories of people testing positive on arrival and being shunted into 14-day quarantine – paid for from their own pocket – bounced around travel blogs and Twitter.

On May 1, Thailand dropped its “Test & Go” quarantine procedure, allowing vaccinated visitors to enter freely, while an onerous pre-departure registration scheme known as the “Thailand Pass” is likely to also be abandoned within weeks.

Authorities hope the result will be between 5 and 15 million overseas visitors by year-end, as the Southeast Asian country prepares to declare the coronavirus endemic and throws open the door to a travel-starved world.

On Railay beach, bars and restaurants already hum with backpackers, many knocking back beers to a loud techno soundtrack as the sun dips behind the ocean.

As far as Becca is concerned, the island-hopping route across Koh Phangan, Koh Samui, Phi Phi and Koh Tao is firmly back in business.

“It’s so cheap here, compared with where we’re from,” she said. “It’s such a treat to have a meal for two pounds.”

A 10-minute walk to the more rugged east side of the coast, tour operator Naren Fangkwa is less enthusiastic as he laments the continued absence of wealthier tourists to one of Thailand’s top destinations.

Naren believes many high-end visitors have been frightened off by the kingdom’s constantly changing entry rules.

“Since borders opened, visitors are mainly young people like uni students and backpackers who don’t really buy tour packages,” he said.

Many restaurants on Naren’s side of Railay get by on handfuls of customers, while several others remain shut, victims of a pandemic that has smashed one of the country’s most crucial industries.

Despite the banner headlines about reopening, tourism is still far below pre-pandemic levels, when it attracted nearly 40 million people and generated more than $60bn of revenue, accounting for up to a fifth of the kingdom’s gross domestic product.

Last month, forward bookings for 2022 showed Thailand had reached 25 percent of normal levels, compared with 72 per cent and 65 percent each for Singapore and the Philippines, respectively.

Nevertheless, the kingdom expects those who do visit between now and year-end – the majority from Europe, the United States, the Middle East and India – to spend at least 630 billion baht ($18bn) in the country, providing a much-needed boost to incomes as inflation chews into purchasing power.

Halal tours

Krabi, whose population is 40 percent Muslim, is particularly well-placed to pull in an expected surge in Middle Eastern visitors, with “halal tours” offering a mix of sightseeing, religious visits and food.

“We’re planning to tap the Middle Eastern market this year, especially Saudi Arabia,” Sasithorn Kittidhrakul, president of Krabi Tourism Association, told Al Jazeera.

“It’s a high-end market for us and Krabi has what it takes to cater to the health and wellness conscious tourists.”

Sasithorn said bookings at the province’s hotels are running at 30 percent for the next high season of October to March.

So far, bold projections of one million visitors a month are yet to be felt across the grassroots economy of Krabi, where most families count several members employed in tourism.

Driver Sorapong Kuasuk said high-spending tour groups are yet to reappear and blames months of mixed messaging from the government for deterring bookings.

“Tourists are going to go to other countries that have clearer COVID measures,” he said, condemning Thailand’s months-long debate over ending quarantine on entry.

“Everyone knows that if the Thai authorities announce one thing in the morning they will change it by the evening. I think it’ll be a while before tourists feel more confident to return.”

Bigger economic forces also threaten the outlook for Thailand’s tourism reboot.

Surging living costs are eating into the disposable incomes of the world’s middle class.

Earlier this month, analysts at J P Morgan issued a pessimistic outlook for Thailand’s economic recovery, due in part to the lack of a timetable for the return of Chinese tourists under Beijing’s draconian “dynamic zero COVID” policies.

From Krabi to Phuket and Pattaya, Thai resorts do not expect a return to the boom times until Chinese visitors, who made up more than one-quarter of arrivals before the pandemic, come back.

For the tour operators of Railay, the next few months are about survival.

“We barely make 5 percent back of what we used to before COVID,” Atittaya Kajay, who sells boat trips to nearby islands, told Al Jazeera.

“People spend less now, they want bargains when before they were all higher end, people with money”.

• Get involved

Community-Based Tourism: Empowering Local Champions for Sustainable Tourism in Thailand

November 6, 2022.

Pattamon Rungchavalnont

Head of Solutions Mapping, Accelerator Lab, Thailand

Thailand is among the world's top tourist destinations. The country’s diverse geographical settings and rich cultural capital provide a vast variety of tourism experiences from relaxing by beautiful sandy beaches of the South to exploring lush green forests of the mountainous North and enjoying local cultures in the Northeast. In 2019, Thailand welcomed a record high of 40 million visitors. For this reason, tourism is a major driver of Thailand’s economic development, providing around 20% of the national GDP and employing over 4.2 million people (11% of total employment). However, Thailand’s tourism industry is not without negative side effects. Unsustainable management of tourism has proven to cause environmental degradation and biodiversity loss as well as fuel uneven economic development. Oftentimes, economic benefits from tourism fall into the hands of large tour operators and investors from the outside while local communities gain minimum economic benefit and are left to suffer many social and environmental drawbacks.  

While the COVID-19 pandemic has caused a major setback to the tourism industry, it also provides an opportunity for Thailand to rethink its tourism. Sustainable and resilient tourism has become a key theme for the country and is now one of UNDP Thailand’s focus areas. UNDP Accelerator Lab Thailand seized this opportunity to embark on a journey to support the growing momentum for sustainable tourism by contributing innovative approaches to the redefinition of the country’s tourism industry, specifically from the angle of community-based tourism.

Why community-based tourism?

Emerged in Thailand in the 1990s, ‘community-based tourism (CBT)’ proposes the idea of ‘tourism by the local people for the local people’ . It is one of the solutions for sustainable tourism because, under this framework, local people are the key decision-makers of their tourism development and the ones to fully benefit from it. Being long-term residents of the areas, local communities are more incentivised to balance economic growth and socio-cultural and environmental impacts caused by tourism activities. At the end of the day, it is their home. However, it is crucial to clear the misconception that CBT refers to ‘village tourism,’ limited only to certain styles of tourism that take place in rural areas. CBT is a tourism management model that puts local communities at the center of the process and can encompass diverse tourism styles from rural tourism to urban tourism, nature tourism, or even luxury tourism. Essentially, CBT is about community empowerment as it is a process in which local people are empowered to uplift their own livelihood.

The pandemic has posed both challenges and opportunities for CBT. International travel restrictions caused a major drop in foreign visitors which used to make up a significant portion of visitors for CBT. Local communities needed to adjust themselves to the domestic tourism market and diversify their offers e.g. community products beyond tourism activities. On the other hand, the pandemic has shaped new tourist behaviours- traveling in smaller groups, choosing less crowded destinations, escaping to nature, and searching for unique experiences and activities for well-being, among others. Many of these new preferences match very well with what CBT can offer and can potentially pave way for a golden age of CBT. Moreover, pandemic-induced lockdowns in major cities led to a reverse in rural-urban migration. Many people working in the cities returned to their hometowns during the lockdown and some sought to find livelihood options at home. CBT provides an alternative and in turn benefits from increased human resources- the skilled workforce who have gained skills and exposure from their time working in the cities. All in all, it is an important time for CBT to take the next step to ensure its thrivability in this rapidly changing world.

Making sense of CBT and contemplating on the way forward

            As a starting point, national-level workshops were co-organized by UNDP Accelerator Lab Thailand, Thailand Policy Lab, the Designated Areas for Sustainable Tourism Administration (DASTA) , and Local Alike (one of Thailand’s leading social enterprises working on CBT). Representatives from local communities, relevant governmental agencies, the private sector, civil society organizations, and academia exchanged views on trends and weak signals affecting CBT as well as discussed the desirable future and way forward. A few interesting points from the exercise include:

• CBT can go beyond leisure tourism and provide learning experiences for visitors, for example community-based environmental conservation and waste management and tap into opportunities from the rise of corporate social responsibility (CSR) and Thailand’s Bio-Circular-Green (BCG) Economy Model of the government.
• Communities need to build the next generation of CBT leaders. Involvement and incentives for the new generation are key for successful engagement and transition.
• Planning and decision-making should be a bottom-up and collaborative process between the government and local communities to avoid projects which do not fit local contexts or serve the real needs of stakeholders. For instance, many tourism applications were created but abandoned.
• Multisectoral support is crucial for CBT development e.g. support from the private sector on digital transformation, academia on CBT-related curriculum for young leaders, etc.
• Funding mechanisms must be further developed e.g. shifting from an informal arrangement to a social enterprise, setting up CBT development funds, etc.

While the discussion revealed multiple areas for development, capacity building for local communities stood out as one of the prerequisites for success. Since local communities are the main drivers of CBT, they must be equipped with frameworks and tools that will enable them to flourish in the rapidly changing world. Existing capacity-building initiatives have been fairly successful in supporting local communities to begin their CBT journey, often focusing on building the foundation and taking a short/medium-term view. While such emphasis is essential, it might not be sufficient any longer. Especially once local communities manage to set up the basics of their CBT, they also need to start thinking about sustainability and being anticipatory. As a result, the Lab identified this as our area of work: how local communities can make their CBT become more sustainable.

Learnings with the locals

            UNDP Accelerator Lab Thailand in collaboration with Local Alike joined hands with two pilot communities to start our learning journey. Social innovation tools were applied to invite local stakeholders to reflect on the becoming of their CBT and look forward through the lens of sustainability. Given the different nature of each community, the discussions and sustainability initiatives took on different directions. However, one commonality revealed itself. Community is never homogeneous; CBT development is an area of convergence for different groups to interact and build momentum toward sustainability. To elaborate, let’s take a closer look at each of the pilot communities…

Chulabhorn Pattana 9 community: A case of nature-based tourism from the South

As a neighbour of the world-famous Hala-Bala Wildlife Sanctuary, Chulabhorn Pattana 9 community of Yala province in Southern Thailand has attracted many nature lovers; some visited the village just to enjoy the serenity and beauty of the natural environment while others were excited by the rich biodiversity of the Hala-Bala Forest, not to mention the village’s charming cultural heritage from their Community Malaya time. The village is familiar with receiving visitors as they have been welcoming relatives and friends from Malaysia and Singapore (legacy of Community Malaya time) for decades. Eight years ago, the concept of CBT was introduced, and the new generation stepped up to lead CBT management. The intergenerational difference is reflected in the different views on tourism management- one hoping to increase the number of visitors while another seeking to keep the delicate balance. The new generation realizes that their main target group is nature lovers. Thus, nature is the main capital for their CBT and its conservation is of paramount importance. Hence, the discussion about limiting the number of visitors with consideration of the area’s carrying capacity was very well received by the CBT management team.

CBT at Chulabhorn Pattana 9 does not only aim to mitigate the negative effects of tourism activities but also inspires positive changes in the local community. In many cases, tourism may have resulted in waste management problems. On the contrary, for Chulabhorn Pattana 9 community, the visitors are the ones demanding that waste in the village needs to be better managed. Hearing these comments, the CBT management team was eager to start a waste management initiative with support from the Lab and Local Alike. Waste separation and organic compost-making have been pioneered by the CBT group and will be shared with fellow villagers to inspire more people to join the effort.

In addition, the CBT management team sought to further develop tourism activities that highlight the value of biodiversity and incentivize conservation. Birdwatching was identified as a viable option. Interestingly, apart from our support, birdwatching was born out of collaboration with a visitor who happens to be a bird expert, an ex-member of the Bird Conservation Society of Thailand. Feeling that Chulabhorn Pattana 9 is more than a touristic destination to him, this bird expert saw the potential and was more than willing to help provide training on birdwatching to local guides. Chulabhorn Pattana 9 is able to shift from selling their services to ‘tourists’ to building relationships with ‘visitors’, some of whom have become ‘friends’ to co-create a sustainable future for their CBT.

Nong San community: Local life and craft in the Northeast

Nong San community of Sakon Nakhon province in the Northeast of Thailand is famous for its indigo dye handicrafts. Traditional knowledge on indigo dye has been passed on from generation to generation at Nong San village. When combined with the skills of a new generation artist, Pornpimon Mingmitmee, this cultural capital becomes the starting point of Nong San CBT. Visitors, both craft lovers and chillax tourists, enjoy the simple slow life and recharge themselves with natural dye crafts, organic agriculture, and the beauty in the local lifestyle. However, the early days of Nong San CBT were not all easy. The community did not believe that CBT was viable at first, so Pornpimon had to start small and gradually showed other people the success to inspire more support from within the village and nearby community. Furthermore, with the COVID-19-induced lockdown, villagers who used to work in other cities returned to the village and joined force to expand Nong San CBT. However, unlike Chulabhorn Pattana 9 case, Nong San CBT opts for a more decentralized model where each member acts as an independent micro-entrepreneur and loosely connects to provide tour packages for visitors. Therefore, the work here was about business incubation for female micro-entrepreneurs to enhance the distribution of benefits from CBT among the local people. Entrepreneurial skills, including digital marketing, were provided to interested locals.

Circularity is another theme as Pornpimon has been trying to manage waste materials from textile crafts production e.g. left-over threads and fabric scraps. Drawing inspiration from India, the initial idea was to turn textile waste into paper. Local knowledge in Thailand provides a technique for turning natural fibers into handmade paper. Yet, from the prototyping phase, cotton textile waste has proven to be more difficult to handle than other fibers. An alternative was presented as Pornpimon connected with a company working on recycled textiles. The idea is to compile textile waste from the local community, turn it into recycled fabrics, and send it back to the community as raw materials for new products. At the time of writing, the discussion is still ongoing to develop a suitable model of collaboration. This case demonstrates the power of cross-sectoral collaboration in driving CBT toward sustainability.

Sharing our experiences

    Through the working process with our partners, UNDP Accelerator Lab Thailand was able to learn about CBT development as well as share our social innovation tools with key change agents like Local Alike and relevant governmental agencies. Realizing the value of these tools in facilitating processes towards sustainability and resilience, the Lab together with Local Alike co-produced the Community-Based Tourism Social Innovation Playbook to share with others the experience of Thailand. The Playbook emphasized that social innovation process is not linear. While the tools are categorized into three groups (making sense of the past and present; looking forward to the future; and taking actions), users can always jump back and forth between each category of tools to fill the gaps of knowledge as they surface. Case studies from our work with Chulabhorn Pattana 9 and Nong San communities demonstrate this non-linear journey as well as the fact that no two communities are alike; thus, the social innovation tools must be ultilized in consideration of specific local contexts.

In addition to the publication, the Accelerator Lab Thailand will be working with the Accelerator Lab Bangladesh on CBT development in their context. Follow our next blog to see how Thailand’s experiences can be adapted and what lessons we will learn on the journey to transform tourism into a vehicle for sustainable development.

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Thailand's economy rebounds in early 2023 as tourism surges

Executive Director and Asia-Pacific Chief Economist, S&P Global Market Intelligence

Thailand has shown a gradual economic recovery from the COVID-19 pandemic during 2022, helped by rising international tourism arrivals. Real GDP growth rose from 1.5% in 2021 to 2.6% in 2022, with growth momentum expected to improve further in 2023.

The latest S&P Global Thailand Manufacturing PMI survey results for April 2023 showed a strong upturn in manufacturing output and new orders. Due to the importance of international tourism for the Thai economy, the strong rebound in international tourism inflows evident in early 2023 signals that the tourism economy will be a key growth driver in 2023.

Thailand's economic recovery from the pandemic

The Thai economy has shown an upturn in economic growth momentum in early 2023, with first quarter GDP growth up by 2.7% year-on-year (y/y), compared with 1.4% y/y growth in the fourth quarter of 2022.

The strong first quarter growth rate was underpinned by rapid growth in private consumption, which rose by 5.4% y/y, helped by surging international tourism arrivals. Expenditure on services rose by 11.1% y/y due to buoyant spending in hotels and restaurants. However private investment grew at a modest pace of just 2.6% y/y, while public investment grew by 4.7% y/y.

Thailand's growth rate in 2022 was quite moderate in comparison with other large ASEAN economies such as Malaysia, Vietnam and Philippines, which posted very high growth rates as they rebounded from the pandemic. Thailand recorded real GDP growth of 2.6% in 2022, representing a relatively modest pace of economic recovery from the recessionary conditions caused by the COVID-19 pandemic.

A key driver for improving economic growth in 2022 was the recovery of private consumption, which grew by 6.3% compared with just 0.6% y/y growth in 2021. Private investment growth also improved from a pace of 3.0% in 2021 to 5.1% in 2022. However public investment contracted by 4.9% in 2022, while government consumption was flat.

Strong growth in private consumption and investment as well as rising energy import prices helped to boost import growth, which rose by 15.3% in 2022, while exports rose by just 5.5%, measured in USD terms. Consequently, the trade balance narrowed from USD 32.4 billion in 2021 to USD 10.8 billion in 2022.

Due to the important contribution of international tourism to Thailand's GDP, a key factor that constrained the rate of recovery of the Thai economy in 2022 was the slow pace of reopening of international tourism, although this gathered momentum in the second half of 2022.

The S&P Global Thailand Manufacturing PMI surged to 60.4 in April from 53.1 in March, signalling a rapid improvement in overall business conditions and the strongest performance in any month since the survey started in December 2015. The month-on-month increase in the headline PMI, at 7.3 points, was also by far the biggest on record (the next-largest upward movement was 4.8 points in May 2020).

A key factor driving the improvement in manufacturing operating conditions was a marked expansion in new orders during April. The rate of growth was the fastest on record and largely driven by domestic demand.

Despite rising demand for raw materials and components in April, manufacturers reported shorter suppliers' delivery times for the first time since April 2022. This reflected a wider recovery in regional and global supply chains. Price pressures eased in April, with input prices having increased at the slowest rate in three months.

Thailand's headline CPI inflation rate eased to 2.7% y/y in April 2023 compared with 5.0% y/y in January 2023 and 7.9% y/y in August 2022. The Monetary Policy Committee (MPC) of the Bank of Thailand decided to raise the policy rate by 0.25% from 1.25% to 1.50% at their Monetary Policy meeting on 25 January 2023, with a further 0.25% rate hike implemented on 29 March 2023. This follows three 25bp rate hikes by the MPC in 2022, In 2022, the Monetary Policy Committee (MPC) decided to increase the policy rate three times by 25 basis points each in August, September and November. The MPC assessed that headline inflation will likely return to the target range by mid-2023, with average CPI inflation projected to decline to 2.9% in 2023 and 2.4% in 2024.

Recovery of international tourism sector

International tourism was a key part of Thailand's GDP prior to the COVID-19 pandemic, contributing an estimated 11.5% of GDP in 2019. However, foreign tourism visits collapsed after April 2020 as many international borders worldwide were closed, including Thailand's own restrictions on foreign visitors.

As COVID-19 border restrictions were gradually relaxed in Thailand and also in many of Thailand's largest tourism source countries during 2022, international tourism showed a significant improvement during the second half of the year. The number of international tourist arrivals reached 11.15 million in 2022, compared with just 430,000 in 2021. However, the total number of visits was still far below the 2019 peak of 39.8 million, indicating considerable scope for further rapid growth in the tourism sector during 2023.

International tourism arrivals in the first quarter of 2023 surged to 6.5 million visitors, which was more than half the total number of international tourist visits in 2022. Total tourism receipts in the first quarter for both domestic and international tourism spending was estimated at 499 billion baht, up by 127% y/y. The Tourism Authority of Thailand has increased its estimated target for international tourism visits in 2023 to 25 million, which is more than double the total number of international tourism arrivals in 2022.

Thailand economic outlook

Despite the upturn in private consumption and international tourism arrivals in 2022, the overall pace of economic expansion was relatively moderate, at just 2.6%. Easing of pandemic-related travel restrictions during 2022 has also allowed a gradual reopening of domestic and international tourism travel, which gathered momentum in the second half of 2022.

With more normal conditions expected for international tourism travel in 2023, this should provide a significant boost to the economy. Due to the importance of tourism inflows from mainland China prior to the pandemic, the reopening of mainland China's international borders will be an important factor contributing to the further recovery of Thailand's tourism market.

Helped by the continued recovery of the international tourism sector, some upturn in GDP growth to a pace of around 3.4% is expected in 2023.

Over the next decade Thailand's economy is forecast to continue to grow at a steady pace, with total GDP increasing from USD 500 billion in 2022 to USD 860 billion in 2032. A key driver will be rapid growth in private consumption spending, buoyed by rapidly rising urban household incomes.

The international tourism sector will continue to be a dynamic part of Thailand economy, buoyed by rapidly rising tourism arrivals the populous Asian emerging markets, notably mainland China, India and Indonesia.

By 2036, Thailand is forecast to become one of the Asia-Pacific region's one trillion-dollar economies, joining mainland China, Japan, India, South Korea, Australia, Taiwan, Philippines and Indonesia in this grouping of the largest economies in APAC. The substantial expansion in the size of Thailand's economy is also expected to drive rapidly rising per capita GDP, from USD 6,900 in 2022 to USD 11,900 by 2032. This will help to underpin the growth of Thailand's domestic consumer market, supporting the expansion of the manufacturing and service sector industries.

However, rising per capita GDP levels will also put pressures on Thailand's competitiveness in certain segments of its manufacturing export industry. Therefore, an important policy priority for nation will be to continue to transform manufacturing export industries towards higher value-added processing in advanced manufacturing industries.

One of the key economic and social challenges facing Thailand is its rapidly ageing population, which will result in a rising burden of health care and social welfare costs over the next two decades. This will be a drag on Thailand's long-term potential growth rate, making investment in technology and innovation increasingly important to mitigate the economic impact of demographic ageing.

Rajiv Biswas, Asia Pacific Chief Economist, S&P Global Market Intelligence

[email protected]

© 2023, S&P Global Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

Purchasing Managers' Index™ (PMI ® ) data are compiled by S&P Global for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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How Thailand Hopes to Meet Its Goal For 1.7 Million Indian Tourists

Bulbul Dhawan , Skift

April 19th, 2024 at 8:52 AM EDT

India is one of the most important source markets for Thailand. Pre-Covid, nearly 2 million Indian tourists flocked to Thailand, making India the third-largest source market in 2019. Now, Thailand is looking to bring India back to pre-Covid levels.

Bulbul Dhawan

The Tourism Authority of Thailand on Thursday hosted a group of more than 8,000 incentive visitors from India. The delegation is part of the authority’s goal of receiving at least 1.7 million Indian visitors this year, it said in a statement. 

India is one of the most important source markets for Thailand and is also the fastest-growing. In 2023, over 1.6 million Indian travelers visited Thailand , making the country the fourth-largest source market for Thailand. These tourists spent more than THB 63 billion ($1.7 billion). 

In 2024, through February , India ranked fifth among source markets with more than 300,000 tourists traveling to Thailand. In 2023, Thailand was one of the top international destinations for Indians, with Bangkok being the second most popular foreign destination after Dubai, according to travel agency Skyscanner .

Schemes to Attract Indian Travelers

Thailand also introduced a visa waiver for Indian tourists from November 10 last year till May 10, 2024, a scheme that had been put on hold post Covid. 

Thailand tourism governor Thapanede Kiatphaibool called India a high quality and high spending market, while explaining the reason for resuming the visa exemption for Indian travelers. The governor had then said that the country was evaluating if a visa-free facility could permanently be extended to Indian travelers. 

Apart from this, Thailand’s key strategies to attract Indian tourists include subsidy schemes for incentive, wedding, and celebration groups, the governor said earlier this year at a travel exchange . “Joint promotions with airlines and travel agents will be offered for repeat visitors and golfers,” Kiatphaibool added. 

All-Year-Round Destination

Thailand minister of tourism Sudawan Wangsuphakijkosol said, “I am determined to elevate Thailand to be a quality and safe destination that delivers a valuable experience to our visitors from India through Thailand’s soft powers and promotes Thailand to be an all-year-round destination.” 

Expecting INR 185 billion ($2.2 billion) in tourism receipts from India, Thailand looks to attract over 1.7 million Indian travelers to the country in 2024, as it aims to attract 35 million tourists this year.

In India, Thailand is marketing itself to various segments, including families, millennials, golfers, luxury travelers, incentive groups, as well as wedding and celebrations groups.

Beyond popular destinations like Bangkok, Phuket and Pattaya, the Tourism Authority of Thailand is also promoting destinations like Hua Hin, Kanchanaburi and Khao Yai.

Thailand also plans to launch special initiatives for senior citizens, women travelers, Gen Z, and LGBTQIA+ travelers. Wellness tours and adventure sports are also segments where the destination is planning to focus. 

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Tags: asia monthly , india , india outbound , india travel , marketing campaign , skift india report , thailand , tourism , tourism authority of thailand , Travel Trends

Photo credit: Thailand introduced a visa waiver for Indian tourists last year. TAT

Thailand's employment rises in Q4 on increased tourism

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Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Kim Coghill, Kanupriya Kapoor

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Vietnam surpasses India and Thailand and now becomes biggest rice supplier for Singapore

Saturday, 20 Apr 2024

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Rice production at Trung An Hi-Tech Farming JSC in Can Tho, - Photo from Vietnam News/ANN

HANOI (Vietnam News/ANN): Vietnam has for the first time surpassed India and Thailand to become the largest rice exporter to Singapore by shipping S$36.15 million (US$26.55 million) worth of rice in the first three months of this year, an increase of 80.46% over the same period in 2023, winning 32.03% of the market share, according to the Vietnam Trade Office in Singapore.

Vietnam was followed by Thailand with an export value of 33.63 million SGD, while India came third with 33.16 million SGD.

The decline in export value of regular brown rice and white rice was offset by the strong increase of sticky rice, milled or peeled fragrant rice and broken rice with turnovers of 3.79 million SGD, 18.06 million SGD and 575,000 SGD, respectively.

Particularly, besides Vietnam's traditional strong product of white rice, the turnovers of two other product groups - sticky rice and milled or peeled fragrant rice - also rose to dominate the majority of the market share in Singapore, reaching 80.08% and 73.33% respectively. This was the main factor that helps Vietnam surpass Thailand and India to become the country with the largest rice market share in Singapore, the office asserted.

According to the office, Thailand, India, and Japan have been major competitors of Vietnam in Singapore. India's ban of rice export from July 20, 2023, has created good conditions for Vietnam to increase market share in Singapore.

However, the office advised Vietnamese rice exporters to continue improving their competitiveness and enhancing the quality of rice.

The office will organise more exhibitions to increase the presence of Vietnamese rice in this potential market.

The office cited data from the Accounting and Corporate Regulatory Authority (ACRA) of Singapore as showing that Singapore imported nearly 112.9 million SGD worth of rice in the first three months of this year, up 23.86% year on year.

In order to increase market share and sustainably maintain its top position, according to the office, all ministries, sectors, localities, associations, and businesses should join hands together in strengthening promotion of Vietnamese rice products and trademarks.

Alongside, the signing of a memorandum of understanding in rice trading between Vietnam and Singapore will also be an effective tool for Vietnam to maintain its position of No.1 rice supplier in Singapore, it added./.

Tags / Keywords: Vietnam , Rice , exports , Big Rise , Main Supplier , Singapore

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