Is Thailand reaching tourism breaking point?

Demand beats supply for low to midscale hotel rooms

Thailand must focus on attracting quality tourists instead of the mass market – or risk straining its infrastructure to breaking point, said the country’s permanent tourism and sports secretary, Suwat Sidthilaw.

Arrivals growth of around 3% would be more sustainable in the long term than the current 20%, he explained.

“Income is more important than numbers. That means [attracting] quality tourists [who] should play a key part in our strategy. Ideally we don’t want more than 20 to 25 million tourists [annually]. We only have limited resources and we are already facing infrastructure and capacity problems.”

Suwat opposes a proposal to stop visa requirements for Chinese tourists. Thailand started experiencing problems when visitor numbers exceeded 20 million last year, he said.

The country received 21.7 million tourists from January to October 2013, according to the Tourism Authority of Thailand, and is targeting 28 million international tourists in 2014, up from 22.3 million in 2012.

“We don’t have enough buses, guides or hotels. Hotels are not happy with the situation. Tour operators are [the only ones] really benefiting,” Suwat said.

Thailand’s hotel market is struggling to keep up with demand for low to midscale accommodation, as over 70% of properties coming up in the next few years are in the upscale segment, according to STR Global. “There are not enough midscale hotels coming in to meet demand,” Jesper Blomqvist, Asia-Pacific area director at STR Global, said. “Where are the mass tourists going to stay?”

TTG Asia

[pictured: Don Muang Airport, domestic terminal]