Thailand’s uneasy reliance on Chinese tourists just keeps getting bigger
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Thailand’s uneasy reliance on Chinese tourists just keeps getting bigger

A THAI friend of mine remarked the other night after to returning to Chiang Mai from her studies in New York that out of all the changes she had noticed in this fast growing city it was the pervasion of Chinese tourists that surprised her the most. We have seen over the last few years a statistical growth which has transformed the city and brought with it a new economy. The tourism demographics are a changing, and while a third language has started to adorn restaurant menus and public bathrooms around town, there has been a barrage of controversy concerning how Thailand’s rising star of tourism conducts itself.

In spite of what opinions we might hold about the influx of tourists from China and the purported traits they bring with them, Thailand has become heavily reliant on its new guests. As MasterCard chief economist Yuwa Hedrick-Wong put it recently in a Reuters article, the many countries benefiting from Chinese tourism must “diversify”, and not become too dependent on one demographic in terms of tourism revenue.

At the same time, not focusing on Chinese tourists would suggest poor business acumen. While there has been an increase in Russian tourists to Thailand over the years – followed by a decrease due to the weakening of the ruble in 2014 – China is the only market that stands out. Diversification might be at the epicenter of all intelligent, sustainable business models, but with Chinese spending power and the will to spend overseas being what it is, one could hardly be blamed for focusing towards the Divine Land for your business growth.

In March this year Chinese tourists travelling into Thailand amounted 679,660 people, which was 26.84% all international tourists; 29% of tourists were Chinese in February, and 21% in January – almost as much as all European tourists put together, and a much higher number than all tourists travelling from the Americas. In 2014 Chinese tourists visiting Thailand was by far the highest nationality (4.6 million or 18.66% of 24.8 million tourists in total), followed by Malaysian and Russian nationals. Tourists from the UK amounted to 909,335 in 2014, a number that has been more or less steady for the last 10 years, but even back in 2006 was still below China’s 1,033,305 arrivals.

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In 2014 China’s outbound tourists for the first time ever equaled 107 million of its citizens, a rise of 19.49% form 2013, according China’s National Tourism Administration. Compare that to 10 million outbound tourists in 2010. According to a report by Bank of America Merrill Lynch that number looks likely to increase to 174 million outbound tourists by 2019, with an expenditure of an estimated $264 billion. And it’s thought that only around 5% of the ‘world’s biggest spenders’ hold a passport.

John de Kreij, who owns the Sleep guesthouse in Chiang Mai with his Thai wife started his business at about the time of the Chinese tourist explosion. He told Asian Correspondent that during the low season 70% to 80% of his occupants are Chinese. “I think we wouldn’t survive without them,” said de Kreij, adding, “I just spoke to a lady who works for a zip line company and she was telling me the same thing; that 70% of their customers at the moment are Chinese.”

(READ MORE: Thailand doesn’t have a Chinese tourist problem: the problem is resentment, and racism)

It’s good news for the Sleep guesthouse then that Thailand’s Tourist Authority (TAT) has projected that by the end of 2015 a record six million Chinese tourists will have visited Thailand. There have been 2.69 million Chinese arrivals in the first four months of the year, according to TAT, spending an average of 6,346 baht (US$188) each day compared to the average daily expenditure of foreign tourists of 4,950 baht.

While the initial spike in Chinese tourism numbers was partly due to the 2012 Chinese blockbuster movie, ‘Lost in Thailand’, the momentum doesn’t seem to be stopping. The Tourism Authority of Thailand (TAT) has recently begun a marketing campaign directed at China’s largest micro-blogging website, Weibo, focusing on Thailand’s travel and tourism services and products. ‘Lost in Thailand’ may have been the catalyst to the Chinese influx, but the focus now is how to get the Chinese to stay in Thailand.

Jaffee Yee, a Malaysian born veteran publisher, turned his focus to the Chinese market in 2013 when he launched something of a novel idea at the time, his Chinese language magazine for Thailand, Nihao. Yee told Asian Correspondent, “I first conceived the idea to launch a Chinese travel mag for Thailand during 2011-12 when Chinese visitors to Thailand began to surge past the traditional #1 market source Malaysia. I realized there was no existing Chinese language magazine and there was a clear market niche.”

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A Chinese tourist rides on a bicycle during a tour in downtown Chiang Mai. Pic: AP.

Yee is currently working on a property and travel magazine targeting the Chinese of Greater China and Southeast Asia to be launched in the last quarter of 2015. Speaking of the cash crop and the danger in putting all your eggs into one basket, Yee says, “It’s always dangerous to rely too heavily on one market; the risk of a crash is unpredictable as with any natural disaster. A good example is impact of the disappearance of the Russians in Pattaya, a town that has been heavily dependent on this single market source in the past.” What if MERS (Middle East respiratory syndrome) affects the market, he asks, “The Chinese may simply stop travelling and stay home.” Coincidentally, Thailand confirmed its first case of MERS shortly after the interview.

It seems, as was reported by Reuters, that some people riding the wave of Chinese tourism are doing so with “gritted teeth”, with many people that accommodate Chinese tourism complaining of bad behavior. In view of the (mostly) innocuousness of these well-reported misdemeanors perhaps Thailand might appreciate this boom a little more and be careful not to lose a nose to spite its own often beguiling face.

At Sleep guesthouse in Chiang Mai they welcome what has been the main source of their economic survival, and are open-minded about what is perceived as unworldly or ungainly behavior. “I would say most of our Chinese customers are really nice and most of the incidents we had were based on cultural misunderstandings,” says de Kreij. “My wife and me talked about this the other night. That most people don’t realize that without them here the economic situation in Chiang Mai would be totally different.”