LED by a record 60% increase in the 2023/24 fiscal year budget of the Tourism Authority of Thailand (TAT), the Thai government is positioning the tourism industry as “the primary engine of economic growth” this year. However, those hopes are likely to be dashed in the event of a wider conflict in the Middle East.
A detailed analysis of the Thai Budget Bill, currently going through Parliament, shows that the budget allocation for the TAT is up from 3,258 million baht in fiscal year 2022/23 (beginning in October) to 5,201 million baht in fiscal year 2023/24, the largest percentage increase of any government agency. In the same period, the budget allocation for the Thai Convention and Exhibition Bureau (TCEB) is up from 637 million baht to 826 million baht and the Department of Tourism in the Ministry of Tourism and Sports up from 1,753 million baht to 1,896 million baht.
This is in addition to the billions of baht to be spent by other travel, transportation and tourism related enterprises such as Thai Airways International and the Airports of Thailand. The Bangkok city governorate plus each of the country’s 77 provinces also have allocations for multiple tourism-related projects, especially infrastructure and facilitation.
Although the Budget Bill was approved by the Cabinet of the former government under Prime Minister Prayut Chan-ocha last June, its formal passage through Parliament has been hit by delays in forming the post-election government of Mr. Srettha Thavisin.
On paper, the Thai tourism sector is an administrative hodge-podge but generally works well. The Department of Tourism comes under the Ministry of Tourism and Sports and takes care of product development, licensing, rules and regulations, statistical compilation and analysis. The TAT, responsible only for marketing, is classified as a “state enterprise” and does not come under the ministry. TCEB is another specialised agency under the Prime Minister’s office. All have different internal management structures and personnel regulations.
However, the sum of the parts is greater than the whole. The decentralised structure allows autonomous decision-making and, to some extent, speeds up action. There are reasonably good communication and coordination mechanisms amongst the government agencies, as well as with the private sector.
In its preamble to the Budget Bill 2024, the government clearly identifies tourism as a major contributor of the estimated 2.5% growth in the Thai economy in 2023, with continued expectation for a projected 2.7% to 3.7% growth in 2024.
The overall development agenda remains pretty much the same: To boost tourism arrivals and average daily spend, distribute income around the country, strengthen linkages with the neighbouring overland border countries, enhance the value and value added of tourism products and services, streamline transportation networks, attract MICE and sports events and use smart-city technologies to boost visitor security and conveniences.
However, it warns of “limitations and risks” such as the global economic slowdown, high household and corporate debt, the impact of climate change on agricultural output, geopolitical conflicts and global economic and financial system volatility.
In addition to the significant increases in tourism-related budgets across the board, some clear trends are apparent, especially to enhance sustainability, upgrade product quality and improve services and convenience.
The TAT will be spending 419.4 million baht on international marketing and 158.3 million baht on domestic marketing. A major focus will be on developing seven niche-markets:
(+) Responsible and sustainable tourism: 1.88 billion baht
(+) Creativity and cultural tourism: 709.2 million baht
(+) Business tourism: 457.9 million baht
(+) Connectivity with regional destinations: 130 million baht
(+) Marine tourism 107.2 million baht
(+) Community tourism: 92.3 million baht
(+) Health and wellness tourism 71.1 million baht
Sustainability will also be a key priority of the Department of Tourism which has nearly tripled the budget for upgrading the standards of products, services and facilities from 177.7 million baht to 448.9 million baht. The department is also responsible for overseeing applications for film and movie productions in Thailand but the budget allocation for this has been cut to 91 million baht, down from 137.5 million baht in fiscal year 2022/23.
One big challenge facing the industry is attracting and upgrading staff capabilities, especially in an era of constant change and demographic shifts, with many of the old generation TAT personnel now gradually retiring. The TAT has been allocated a budget of 198.5 million baht for personnel development in order to make it a “high-performance marketing organisation.”
The budget allocations provide good context for the series of rapid-fire moves being taken by the Thai government, such as visa-free and free-visa access for key source markets such as India and China to boost visitor arrivals. However, the wildcard remains the situation in the Middle East which, if it gets out of hand, will certainly disrupt all the plans and targets.
In 2023, travel & tourism did not meet the target of 30 million arrivals after being hit to varying degrees by the Russia-Ukraine war, the Israel-Palestine conflict and the October 2023 shooting of a Chinese tourist in a Bangkok shopping mall. A recovery is clearly on track and mood is buoyant but the industry is watching the continuing conflict in the Middle East with bated breath.
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Top: A tourist enjoying the sunset at Phu Kradueng National Park in Loei. Photo: Sanook.com
Insert and Front Page: Tourists holidaying in Hua Hin. Photos: Sanook.com
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