14-10-2023 (BANGKOK) The recent fatal shooting at Bangkok’s upscale Siam Paragon shopping mall has cast a pall over Thailand’s efforts to revive its vital tourism sector following years of setbacks from political unrest, health crises, and now global economic woes.
On October 3rd, a former police officer opened fire in the Rolex section of the mall, killing two people and sowing panic among locals and tourists alike before taking his own life. One of the victims was a Chinese tourist, which amplified concerns about visitor safety in the wake of the incident.
The shooting brought back unpleasant memories of a 2015 bombing at the popular Erawan Shrine in Bangkok’s downtown core, which killed 20 and injured over 100, many of them tourists. It also coincided with the release of China’s biggest blockbuster film this year, Cliff Walkers, which depicts Chinese citizens falling prey to a human trafficking ring in Southeast Asia.
The chilling scene at Siam Paragon could not have come at a worse time for Thailand’s new Prime Minister Srettha Thavisin, who took office less than two months ago. After personally greeting Chinese visitors arriving visa-free at the airport in a public display aimed at rebooting tourism, Srettha now faces the tough task of restoring confidence that Thailand remains a safe destination amid economic headwinds.
Counting on China
The temporary visa waiver for Chinese nationals signals the priority Thailand has placed on rebooting Chinese tourism. Still, it remains uncertain whether the country can achieve its target of 5 million Chinese visitors this year given that only around 2.2 million arrived in the first eight months as China contends with its own slowing economy.
Before the pandemic, the importance of Chinese tourists to Thailand’s tourism sector could not be overstated. The number of arrivals surged from 4.5 million in 2015 to 11.14 million in 2019, accounting for over 27% of total international arrivals. Tourism spending by Chinese visitors exceeded $17 billion in 2019, making up about 28% of total tourism receipts.
However, China’s stringent zero-COVID policy led to a precipitous decline, with Chinese arrivals plummeting to only 1.25 million in 2020 and a mere 13,043 in 2021.
Filling the Void
With Chinese visitors virtually absent during the pandemic, Thailand’s tourism-dependent economy sought to fill the void by diversifying its sources of foreign arrivals.
India emerged as a promising rapidly-growing market during this period. The easing of entry restrictions for overseas tourists in 2022 proved to be a turning point. In the first eight months of 2022, Indian arrivals to Thailand reached 444,136, surpassing Chinese arrivals (105,860) for the first time.
Thailand also became a hot destination for lavish Indian weddings held outside of India. These extravagant multi-day celebrations with costs ranging from 10 million baht to 30 million baht ($274,000 to $823,000) gave a boost to tourism revenues. However, some industry experts like Ram Sachdev, president of the Thailand Indian Wedding Association, have voiced concerns about focusing on quantity over quality and incentivizing wedding tourism.
Shifting Focus to India
As Chinese arrivals continued to lag while India showed rapid growth, Thailand’s focus shifted perceptibly towards cementing India as a vital source market. This aligned with India’s own “Act East” policy of strengthening economic ties with Southeast Asia.
The Thai government expressed confidence in sustaining the surge in Indian visitors. Significantly, the governor of Bangkok took a personal interest in promoting the Pahurat neighborhood as Bangkok’s “Little India” and publicly participated in the community’s Deepavali celebrations last year.
However, the Siam Paragon incident may give some Indian tourists second thoughts about visiting. While Thailand remains a top choice for Indian travelers, the shooting will likely amplify existing concerns about personal safety.
The ASEAN Opportunity
As Thailand works to increase arrivals from the two most populous nations in the world, it must also stay focused on its own Southeast Asian backyard.
Thailand has long been a favored regional destination for ASEAN countries given its proximity, affordability and wealth of cultural and natural attractions. It was the second most preferred ASEAN destination for intra-regional travelers in the 2022 State of Southeast Asia survey published by ISEAS-Yusof Ishak Institute.
Thailand’s fellow ASEAN-5 countries – Singapore, Malaysia, Indonesia and the Philippines – represent a substantial and stable market based on commonalities. Pre-pandemic data from 2019 showed over 6.6 million arrivals and $6.1 billion in spending from these four neighbouring countries.
While ASEAN arrivals are recovering gradually and already account for double the number of Chinese visitors so far this year, Thailand cannot take this market for granted. It will need to make concerted efforts to boost tourist numbers from Southeast Asian countries given the rapidly evolving landscape.
Post-pandemic travelers are seeking more unique, authentic and sustainable experiences. By emphasizing eco-conscious and cultural tourism tailored to these changing preferences, Thailand can align its branding, infrastructure and services to better attract visitors from across Southeast Asia.
A Test of Leadership
The Siam Paragon shooting, while alarming, is unlikely to single-handedly devastate Thailand’s tourism in the long-run. However, it serves as a stark reminder that Thailand must attend to the overall safety and well-being of its people alongside rebooting its tourism economy.
The incident highlighted the need for improved security measures and social policies that address the root causes of violence. As Thailand negotiates challenges from global economic headwinds and geopolitical realignments, restoring social stability is crucial.
In striving to increase high-spending Indian and Chinese visitors, Thailand must also carefully balance this with managing overtourism and its impacts. Sustainable tourism practices can allow Thailand to welcome more visitors while preserving its cultural and natural heritage.
Having assumed office just recently after months of political turbulence, Prime Minister Srettha’s leadership will be scrutinized. His ability to deliver justice, provide reassurance, and address broader public concerns about safety and security will be tested in the aftermath of this attack.
With deft management of security and social issues alongside pragmatic tourism promotion efforts, Thailand may yet emerge from this difficult chapter stronger and more resilient.
