Chinese ‘market-busting tours’ new threat to Thai tourism industry
ATTA advocates fair pricing regulations to combat the problem of tour packages sold at unsustainably low prices
Chinese investment is increasingly influencing various sectors of the Thai economy, particularly tourism and services, and the evolving marketing strategies to attract Chinese tourists are of particular interest.
The Tourism Authority of Thailand (TAT) has set a goal of attracting 11 million Chinese visitors in 2025, a return to pre-pandemic levels. However, the Association of Thai Travel Agents (ATTA) warns of challenges posed by small-scale Chinese investors in the tourism sector.
Sisdivachr Cheewarattanaporn, president of ATTA, noted that much of the Chinese investment in Thailand’s tourism and services sector involved small-scale operations. Chinese travel agencies are using Thai nominees to register businesses and disrupt the market with very cheap tour packages.
This strategy, dubbed “market-busting tours”, is hurting the Thai tourism sector by offering unmatchable low prices to gain market dominance. These market-busting tours are even worse than “zero-dollar” tours, as they may lead to bad experiences for Chinese tourists. In cases where a tour proves unprofitable, companies may coerce tourists into spending extra or hold them until they pay more – thus affecting their perception of Thai tourism.
“When ATTA first alerted the public about these market-busting tours last June, it prompted some Chinese businesses to retreat, recognising the unsustainability of these practices. We continue to monitor the situation and encourage these operators to exit the market. Fortunately, zero-dollar tours have nearly disappeared,” Sisdivachr said.
To address the issue of market-busting tours, ATTA is pushing for the regulation of tour package prices to ensure they reflect true market conditions and foster fair competition, rather than being set artificially low to undermine the market.
The hotel industry, however, faces fewer concerns as it involves higher investments and less dependence on Thai nominees. Most Chinese investments in hotels are through formal partnerships with other companies.
TAT governor Thapanee Kiatpaiboon stressed the importance of preventing monopolistic practices and illegal operations within the tourism sector. All relevant agencies are tasked with monitoring the market closely to address issues effectively. The Department of Tourism oversees travel agencies and tour guides, while the Commerce Ministry manages shops and restaurants.
TAT aims to attract 11 million Chinese tourists by 2025, matching pre-Covid levels, and surpassing the 530 billion baht generated in 2019. This year, TAT is confident of reaching its target of 8 million Chinese visitors. Payment data from Alipay and WeChat Pay indicates that spending by Chinese tourists in Thailand is on the rise.
Sisdivachr, however, believes achieving the 11-million target in 2025 is challenging and requires intensified market efforts, including more flights between Thailand and China. This year, meeting the 8 million target will be tough, he said, as 3.77 million more Chinese tourists will have to land on Thai soil in the remaining five months of the year.
