Low-price tour groups from China ‘a threat to Thailand’s tourism’

BANGKOK: The use of Thai nominees by Chinese tour operators to monopolise visitors from China is alarming and more harmful to the industry than the previous “zero-dollar tours”, according to industry experts.

This new model would destroy Thailand's tourism industry, which had just started to recover and flourish post-Covid, they warned.

Sistiwat Chivarattanaporn, president of the Association of Thai Travel Agents (ATTA), explained that “these market-destroying tours involve Chinese tour companies using Thai nominees to bring Chinese tourist groups to Thailand at extremely low prices”.

He said the new problem had surfaced following Thailand's full reopening and the bilateral visa exemption agreement between the Thai and Chinese governments effective from March 1, 2024.

They are engaging in aggressive price undercutting to drive Thai tour companies out of business, intending to monopolise the market eventually. Once the tourists arrive in Thailand, they are coerced into shopping and spending between 70,000 and 100,000 baht each, he said.

“These tours are severely damaging Thailand's tourism image, even more than the zero-dollar tours. It is already causing significant distress to Thai tour operators, and if the government does not address this issue, it is expected that within a year, Thai tour companies will weaken and eventually collapse,” he warned.

"These tours orchestrated by the Chinese are employing aggressive price undercutting tactics, which is more severe than anything I've encountered in my career," Sistiwat said.

These Chinese tour companies are implementing tactics that go beyond mere “kickback tours” (The tour groups handled by tour companies in Thailand, which include both Thai companies and networks of Chinese tour operators, purchase a certain number of tourist slots from Chinese tour companies. Subsequently, the Chinese tour companies will gradually send these tourists to Thailand.)

“They are new players in the Thai market, handling the entire process themselves and offering tour packages to Chinese tourists at unprecedented low prices without regard for costs or losses. If they incur losses, they simply withdraw, allowing new players to enter, treating it as a gamble,” he said.

The ultimate loser is Thailand, as these practices disrupt and damage the entire market, driving other tour companies out of business to monopolise the market later, he explained.

"The ATTA had previously informed Prime Minister Srettha Thavisin about the price-cutting issues and the irrational market mechanisms that harm the country's image. As representatives of the tourism industry and ATTA, we urge the government to take sincere and urgent actions to address this issue, including imposing penalties for selling below the set prices.

"If not, the overall Thai tourism industry will suffer due to the network of 4-5 companies involved in these practices. Even if 1-2 companies are prosecuted, the others remain unaffected," Sistiwat added.

A report from the Ministry of Tourism and Sports said that in the first five and a half months of 2024 – from Jan 1 to June 16 – a total of 16,200,706 international tourists arrived in Thailand, an increase of 37% compared to the same period last year.

The top five source countries for tourists were: 1. China with 3,179,539 visitors, 2. Malaysia (2,253,397), 3. India (952,470 visitors), 4. Russia (888,203), and 5. South Korea (874,903).

Minister of Tourism Sermsaks Pongpanich said: "The issue of foreign tour groups, akin to zero-dollar tours, where tourists are taken only to their affiliated shopping and dining places, including nominee companies handling major markets like China and Russia, is indeed inappropriate. While we cannot outright ban these activities, we must ensure they operate legally.

"We need to be stringent with these issues as they compete for Thai people's income. I will take action to investigate and address any irregularities." - The Nation/ANN

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Thailand , tourism , China , low-price


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