While Thailand has developed a reputation as a budget-friendly destination, offering affordable accommodation and leisure attractions, tourism authorities appear keen to attract a new breed of high-end clientele. In recent years, several local initiatives and global campaigns aimed at promoting luxury tourism have formed a strategic focus for the Tourism Authority of Thailand (TAT), helping the agency build on increasing visitor numbers with more spending power. “The trend is moving to the higher-end market, for both Chinese and European tourists. The spending per tourist is increasing,” Pongpanu Svetarundra, the secretary of the Ministry of Tourism and Sports, told local media in January 2018. Indeed, in 2017 the number of tourists rose by 8.8%, to reach 35.38m arrivals, while tourism revenues rose by 12%, to $56bn, indicating that the spending power of travellers is expanding. This trend of revenue outpacing visitor numbers looks set to continue in 2018, with foreign arrivals forecast to grow by 5.6%, to 37.55m in 2018, and revenue by 8.2%, to $60.8bn. The main strategy of TAT involves focusing on select big-ticket segments, including medical, health and wellness tourism, luxury accommodation, destination honeymoon and wedding holidays, as well as elite package tours.
Rest & Relaxation
There is a strong base for expansion with some cities already providing luxury accommodation offerings, especially in the capital Bangkok, which hosts a number of long-standing five-star hotels. Some of the best known include the Mandarin Oriental Hotel Bangkok, which opened in 1876, the Siam Bangkok and the Shangri-La Hotel.
However, new players are entering the market. In 2017 Bangkok saw its luxury supply increase by 8000 rooms. Notable five-star openings included the Park Hyatt in June and the 137 Pillars in April. This trend is expected to continue as the capital city welcomes eight more five-star hotels opening between 2018 and 2022, increasing the luxury stock by 18.2%. The 171-room Waldorf Astoria Bangkok will mark the luxury brand’s first foray into South-east Asia. The hotel is set to have its grand opening in August 2018, with a focus on both high-end clientele and weddings. The Four Seasons Hotel Bangkok, meanwhile, is planned to come on-line in 2019, and will include private residences, shopping and upscale dining options.
In addition to the entrance of new high-end players to the market, those that are already there are improving their offerings. In early 2018 the restaurant Mezzaluna, located in the five-star hotel Tower Club at lebua, was awarded two stars in Bangkok’s first Michelin Guide, along with Indian restaurant Gaggan and the Mandarin Oriental’s La Normandie; another 14 restaurants were given one star. The guide itself should raise further awareness among potential visitors to the country, and more of such guides are expected for destinations including Phuket, Chiang Mai and Hua Hin.
Another part of TAT’s strategy is to highlight local cuisine. In June 2018 the UN World Tourism Organisation (UNWTO), the Thai government and the Spanish culinary foundation Basque Culinary Centre hosted the fourth UNWTO World Forum on Gastronomy Tourism in Bangkok. By embracing the world of upscale dining, officials are looking to add value and prestige to culinary products and services that are based on the unique local foods and culture.
The high number of luxury offerings and accommodation has helped feed into another industry. TAT started promoting Thailand as a luxury weddings and honeymoon destination via a number of initiatives aimed at attracting interested clientele. One such campaign offered nine couples from nine countries the chance to win a wedding in one of Thailand’s five-star resorts as a way of bringing attention to the country. TAT has also increased its presence at global conferences. In January 2017 authorities campaigned at the Ultimate Bridal Event in Australia, and in May of that year the agency hosted some 450 delegates at the fourth annual Destination Wedding Planners Congress in Phuket, which brought together high-end destination wedding players.
Medical & Wellness
The capital is also a centre for high-end medical tourism. Thailand is recognised as a leading destination for private medical and cosmetic treatment, attracting some 1.5m visitors in 2016 for this purpose. At the end of 2017 the country had 51 facilities accredited by the Joint Commission International, a US-based non-profit organisation that accredits hospitals across the globe, representing the highest number of certified facilities in the region.
Medical tourism makes a significant contribution to Thailand’s economy, generating BT107bn ($3.1bn) in 2014, and accounting for 0.4% of the country’s GDP. The sector is helped greatly by the ease of entry into Thailand. People from a number of countries in the region, such as Myanmar and China, as well as those from the Gulf Cooperation Council, can stay for 90 days without a visa if they are seeking medical treatment. The Thai government is continuing to push forward with visa liberalisation. In early 2017 it approved 10-year visas for people aged 50 or older, in a move that was designed for visitors seeking long-term or regular medical treatment in Thailand.
The sector continues to develop on many fronts. Bangkok Dusit Medical Services (BDMS), the largest hospital operator in the country, is currently building a BT12.8bn ($370.5m) luxury health care centre in Bangkok’s business district. The new facility will be called the BDMS Wellness Clinic and will include five-star hotel accommodation at the Swissotel Nai Lert Park Thailand is also looking at longer-term prospects. Prime Minister Prayut Chan-o-cha has developed a 10-year plan to help promote the sector, while other national efforts take into account Thailand’s strengths. Despite these state-led initiatives, the medical and wellness segment is for the most part still being driven by the private sector. Indeed, private players have had notable success in attracting growing numbers of patients from across the region, with Myanmar, Cambodia and Laos becoming key source markets. There have also been efforts to capitalise on Chinese patients, but many industry players have found the competition for this market to be particularly tough.
The importance of the Chinese market cannot be understated. Tourists from China represented the fastest-growing market for high-end Bangkok accommodation in 2017, followed by the Middle East and South Korea, according to a report published by global consultants Horwath HTL. While Chinese tourists have traditionally travelled on budget-friendly package tours, modern Chinese travellers have more spending power, seeking out five-star hotels, designer brands and adventure sports. Indeed, according to statistics released by the China Tourism Academy and Chinese travel agency Ctrip, the number of Chinese travellers not affiliated with a package tour is on the rise, representing some 60% of overall travellers coming from the country. Recognising the potential, the Thai government is attempting to continue attracting so-called free and independent travellers, while also focusing on increasing the spend per trip. In keeping with this goal, TAT organised for 50 Thai travel agents to advertise exclusive, luxury tour packages in the Chinese cities of Jinan, Shijiazhuang, Zhengzhou, and Wuhan, in April 2018. With Thailand estimating to receive some 10m tourists from China in 2018, revenues are expected to total $8.9bn.
Sharing the Wealth
As Bangkok has an established luxury segment, the next phase of the TAT strategy will involve growing luxury travel in secondary cities. In line with these goals, in April and May, TAT invited 35 agents from across the EU, Africa, the Middle East, the Americas, Asia and Oceania to participate in the Amazing Thailand Luxury Trade Meet & Fam Trip 2018. According to Yuthasak Supasorn, the governor of TAT, the agency looks to promote some of Thailand’s finest luxury travel products and services, both in major and secondary destinations. The summit brought participants on three tour programmes which focused on the different regions of Thailand, highlighting high-end experiences and accommodation as well as leisure activities revolving around gastronomy, arts and crafts, nature and beaches, and cultural experiences. Secondary destinations featured on the tours included the southern city of Trang and Krabi, which boasts luxury resorts, mangrove forest rafting and yachting; the eastern city of Trat, which includes upscale accommodation and revolves around local cuisines and yachting; and Thailand’s northernmost province of Chiang Rai, which offers the elephant sanctuary at the Anantara Resort & Spa, an Cherntawan International Meditation Centre, as well as visits to the Ancient City of Chiang Saen.
As operators witness the benefits of tourists with more spending power, products should continue to come online – especially in those destinations that have proven themselves adept in these areas.
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