China’s biggest online travel agency is offering a 30% discount on trips to Thailand’s beaches and malls. The Chinese aren’t buying it.
"Thailand, Malaysia and Singapore are traditionally the favourite tourism route for the Chinese," said Jiang Haibin, a public affairs manager at Ctrip.com International Ltd. "This year, that route was affected a lot."
Visitors from China made up a 10th of all arrivals in Southeast Asia in 2012. The recent falloff threatens an industry that employs millions and contributes billions of dollars to the region's gross domestic product. Chinese travelers have been the fastest-growing tourism market for the 10-member Association of Southeast Asian Nations, accounting for the majority of the increase over the past decade, according to Chua Hak Bin, an economist at Bank of America Merrill Lynch.
Chinese travellers have been deterred by Thailand's political violence and the mysterious disappearance almost six months ago of a Malaysia Airlines plane bound for Beijing.
Thailand attracted 342,547 visitors from China in July, a 25% drop from the same period a year earlier, according to data from the Ministry of Tourism and Sports. Travellers from China accounted for 18% of total visitors to Thailand that month, compared with 21% a year earlier.
The decline in visitors since the army seized power in a May 22 coup has been more severe in the capital Bangkok. In the seven months ended July, the number of travellers from China visiting Bangkok fell 35%, compared with a 21% drop nationwide.
"The MAS air disasters and Thailand's military coup are probably temporary factors that will dissipate over time," said Chua of Bank of America in Singapore. "Longer-term, Asean tourism remains bright despite recent setbacks, boosted by affordable air travel, increasing connectivity, a growing middle class, and a rising and more affluent China."
For now, the kingdom's loss is Japan's gain. Visitors from China to Japan doubled in July from a year earlier. Osaka's hotel revenue per available room jumped 20% in the same period, while Tokyo's climbed 9%.
In contrast, Thailand's hotel revenue per available room fell 15% in July, according to Bloomberg Intelligence, citing Smith Travel Research.
A turnaround Thailand and other Asean countries may come only next quarter, said Daphne Roth, head of Asian equity research at ABN Amro Private Banking in Singapore. In August, Thailand waived visa fees for visitors from China and Taiwan for 3 months to boost tourism.
The establishment of the Thai cabinet will "pave the way for the lifting of martial law imposed right now, which will draw tourist numbers again," Roth said.