Tourism
Hotels Up for Sale in Chiang Mai as Chinese Tourism Dries Up
CHIANG MAI – Thailand’s hospitality industry faces a shakeout as it confronts the prospect of a long decline in Chinese tourists.
Official data published this week revealed that the number of Chinese tourists fell 8.8% in the third quarter, contributing to lower than expected economic growth in the period. Chinese tourists make up about a third of all visitors to Thailand. But they have been put off by a series of incidents, including a deadly ferry accident that left 46 dead.
As a result, a growing number of small hotels and hostels in the city of Chiang Mai, one of the most popular destinations in Thailand, are seeking buyers. Property agents say they are dealing with an unusually high level of sales as the downturn hits smaller businesses hardest.
More than 10 websites for Chiang Mai properties are posting hotels for sale. Many boutique hotels that closed recently are offered at prices ranging from over 50 million baht ($1.52 million) down to even a few million baht.
“Owners launched small hotels a few years ago, expecting to tap into a tourism boom,” a local property agent who requested anonymity told the Nikkei Asian Review. “But this year, many of them have been hit hard by falling tourist arrivals, particularly Chinese visitors, before they broke even. Hotel owners are forced to go out of business because they cannot absorb the impact from the falling number of bookings.”
Another agent told Nikkei: “We have more than 10 resort properties on sale on our website, and there are more handled by rival websites. I have been in this business for seven years, and this has never happened.”
The sharp decline in Chinese visitors followed the capsizing of a passenger ferry at the famous beach town of Phuket in July. Most of those killed were Chinese tourists.
Then came a viral video showing a Thai security guard slapping a Chinese tourist in the face at the Bangkok area’s Don Mueang International Airport on Sept. 27.
Tourism and related industries generate about 20% to 30% of Thailand’s gross domestic product. The number of Chinese visitors fell 0.9% in July and plunged 11% during August and 15% in September, slashing revenue for tourism-related companies.
“Hotels and restaurants in famous destinations including Phuket and Chiang Mai have suffered declines as the number of chartered flights from China has halved [on the year] since July,” said Ittirit Kinglake, president of the Tourism Council of Thailand.
Restaurants that rely on group tours from China have been hit particularly hard, said Chavarit Chonjaron, president of the Chiang Mai Restaurant Club.
Airlines have also suffered. National carrier Thai Airways logged a third-quarter net loss twice as big as the one a year earlier. CEO Sumeth Damrongchaitham blamed the 3.7 billion baht loss largely on a decline in Chinese passengers and the major storms that hit Japan and Hong Kong, cutting flights to those lucrative routes.
Asia Aviation, the operator of budget carrier Thai AirAsia, reported a net loss of 358 million baht for the three months ended Sept. 30, compared with a profit of 260 million baht in the year-ago period.
“We can’t stand still” while tourism worsens, “so we try to do something in order to bring [Chinese visitors] back,” said Chavarit. His club and the provincial government are planning a food festival and other special events to attract Chinese and other foreign tourists.
The Tourism Authority of Thailand has not revised this year’s targets of 38 million arrivals and 3 trillion baht in revenue, despite the drop from China.
The Thai cabinet last week approved waiving a 2,000-baht visa fee paid on arrival by travelers from 21 places, including mainland China, Taiwan, India and Saudi Arabia. The fee will be waived during December and January.
“The measure has helped increase the number of Chinese tourists gradually in Phuket, and we hope that it will rise further,” said Bhummikitti Ruktaengam, president of the Phuket Tourist Association. Chartered flights and group tours from China rose by 10% to 20% in early November, the president said.
But most operators of tourism businesses say the visa discount is unlikely to completely restore the number of Chinese arrivals by the end of this year, which is normally the high season for the industry.
“It is better than doing nothing, though the measure cannot help us 100%,” Chavarit said.
The tourism agency aims to rely less on Chinese visitors, attracting more travelers from elsewhere to ensure sustainable long-term growth.
“We will focus more on the quality, not on quantity” of tourism, agency head Yuthasak Supasorn said. The authority will seek more tourists from Europe, Southeast Asia and India, which offer strong spending power.
Chinese tourists spend an average of 50,000 baht, the authority said, while those from India and Europe spend 60,000 to 70,000 baht.
While Chinese tourists declined by 15% in September, Thailand enjoyed increases from elsewhere, such as 5.5% from India, 40.1% from Malaysia, 11.8% from Vietnam and 9.5% from Laos.
That has encouraged the tourism authority and related agencies to make more presentations in Europe and India to boost visitors. Bhummikitti said he will team with the Phuket provincial government to hold such shows in England and Germany in March.
“We also will be holding a Thai tourism roadshow in New Delhi during Jan. 16 to 18, aiming to promote Thai tourist attractions among Indians,” he said.
By Apornrath Phoonphongphiphat
Nikkei Asian Review
People from more nations will be now able to enter Thailand without a visa beginning Monday. This is part of an effort to increase tourism and encourage visitors to stay longer, Interior Ministry spokeswoman Traisuree Taisaranakul said on Friday.
According to Ms. Traisuree, Interior Minister Anutin Charnvirakul has signed four documents that will make it easier for foreigners to travel. These modifications will all take effect on Monday, provided they are published in the Royal Gazette.
The instructions include 93 more nations on the list of individuals who can visit Thailand without a visa, up from 57 previously. People from these countries can stay for a maximum of 60 days. Additionally, from 19 to 31, nearly twice as many nations will be able to obtain visas on arrival in Thailand.
To attract digital nomads, artists, and tourists interested in learning or practicing skills such as cooking and Muay Thai, the country will also introduce the Destination Thailand Visa service.
The new form of visa, which is valid for five years, allows travelers to stay for up to 180 days.
According to Ms. Traisuree, students holding visas for master’s degrees or higher will not be required to leave Thailand immediately upon graduation. They will be able to stay for an additional year to hunt for work or vacation.
In order to enhance the economy and tourism, the cabinet took a general decision on these additional measures in May. The statement was meant to be released in June, but it was pushed back.
Ms. Traisuree believes that this is the greatest sort of visa for persons who want to work from home in the Land of Smiles and explore the nation without the various restrictions and complications that come with conventional tourist visas.
Getting a DTV will give you a 5-year multiple-entry visa that lets you stay in Thailand for a total of 180 days a year, with the opportunity to stay for another 180 days.
Ms. Traisuree said that the Destination Thailand Visa is great if you want to work from home in the Land of Smiles and see the sights without the many restrictions and problems that come with a regular tourist visa. The Destination Thailand Visa will cost 10,000 THB.
Qualifications for the Thailand Destination Visa (DTV)
According to Thai Embassy, to be eligible for the visa, you must fulfill the following conditions (which could change):
- You have to be 20 years of age or older
- You have to be able to afford the cost of the visa
- To sustain your stay in the nation, you must demonstrate that you have at least 500,000 THB in your bank account
- Proof of your employment with a recognized company is required.
For digital nomads or remote workers who want to make the most of their travels and yet have the opportunity to work while they’re there, the Destination Thailand Visa is designed just for you. Additionally, it is ideal if you are traveling to Thailand in order to partake in any of the following activities:
- Thai food prepared with Muay Thai
- Instruction and conferences
- Sports medicine therapy
- International talent International music and art events
Thailand DTV Visa Benefits
Additionally, there is uncertainty about these details and they could change:
- In comparison to other Southeast Asian nations that provide comparable visas, Thailand has less stringent income requirements and charges for the visa. For another 10,000 THB, you can extend the visa once, for a maximum of 180 days.
- There are ninety-three foreign nations that qualify for the Thailand DTV Visa.
- With this visa, you can lawfully operate remotely for foreign clients and companies while in Thailand.
- Your spouse and any children under the age of twenty may accompany you.
- You are exempt from paying taxes on your foreign income because the visa allows you to stay in Thailand for up to 180 days.
Drawbacks of a Thailand DTV Visa
You are unable to work for a Thai company that needs a Thai work visa, even though you are still able to engage in some activities and make money. Your DTV will end if you decide to change the kind of visa you are currently on.
Additional information on the visa’s release date and application process will be available in late June or early July of 2024. You will most likely be able to apply for it via the Thai immigration office, a Thai embassy, or a Royal Thai Consulate.
Thailand’s Hotels Association (THA) reports that another German tour operator has gone bankrupt, but that this will have a far less effect than the recent bankruptcy of FTI Touristik.
Following notification from the Tourism Authority of Thailand (TAT), the Thai Hotels Association has now confirmed that the Cologne-based luxury tour operator Itravel Group has formally filed for bankruptcy.
Southern Thailand is home to numerous high-end resorts, which Itravel aims to attract, according to Thai Hotels Association president Thienprasit Chaiyapatranun.
As a result of Itravel’s bankruptcy, he said, the hotels association is currently collecting data from its members.
On Monday, the organization wrote to the TAT and the Foreign Ministry, requesting that they assist hotel operators in keeping up with legal developments surrounding the bankruptcy of the German tour operator FTI, which resulted in a loss of almost 111 million baht for hotels around the country.
Hotels having issues with Itravel
On Monday, during the THA monthly meeting, Mr. Thienprasit noted that they also emphasized the case’s urgency to Minister Sermsak Pongpanit of Tourism and Sports.
In response to allegations that hotel operators with business partnerships with Itravel were experiencing issues with financial transactions, the agency issued an alert to the industry, according to Siripakorn Cheawsamoot, TAT deputy governor for Europe, Africa, the Middle East and the Americas.
He speculated that the losses might be lower with Itravel, an online travel agency that focuses on the niche luxury market, than with FTI, the third operator.
According to the Bangkok Post, at Monday’s THA meeting, Mr. Sermsak stated that the ministry will look into measures to assist hotels, especially since the goal of 3.5 trillion baht in tourism earnings for this year is still very ambitious.
According to Mr. Thienprasit, the organization is opposed to the government’s plans to increase the legal foreign ownership of condominiums from 49% to 75%. This, he added, might lead to an increase in unlawful accommodations and make other condo residents feel uneasy about having more guests around the clock.
Unscrupulous investors
He said that some international investors are already breaking the law by renting out their rooms to day guests, even though the Hotel Act only permits rentals of at least 30 days.
An increase in the foreign ownership quota for condos, according to Mr. Thienprasit, could entice unscrupulous investors and lead to the construction of even more unlawful rooms, which now exceed the number of registered hotel rooms by a factor of two.
The success of Thailand’s hotel industry is highly dependent on the business of tour operators. These collaborations bring in a constant flow of visitors, particularly during busy seasons.
It is more convenient for passengers to book comprehensive packages offered by tour operators, which include hotel accommodations and activities. Because of this arrangement, hotels may anticipate a specific amount of bookings without having to spend a lot on advertising.
Additionally, hotels are able to provide more affordable rates, which appeals to guests who are mindful of their budget. But if tour operators go through slumps or start focusing on other places, this dependence might be disastrous.
Source: Bangkok Post, Thai PBS
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SEE ALSO: Thailand Named Top Spot for Most Popular Tourist Destination
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