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In a beachfront hotel on the tropical island of Phuket, the Chinese customer occupancy rate stagnated, while bookings from India began to increase. The Vijitt Resort is one of the many Thai sites that gives rise to optimism.
"We are starting to see new growth," said Kongsak Khoopongsakorn, General Manager of Vijitt and Vice President of the Thai Hotels Association. "Indians are now driving growth in the industry, just like the Chinese."
What happens to Thai tourism could prove to be a canary in the recreational coal mine of other Asian economies as China matures and a new India emerges. The Thai industry was growing about 10% a year due to escalating arrivals from China. However, a boat accident occurred in Phuket in 2018, which killed dozens of mainlanders and whose slowdown in the national economy led to a fall in the workforce.
In contrast, Indian arrivals have accelerated in recent months as a result of increased direct flights, visa-free travel and, most importantly, increased wealth.
The rapid expansion of the middle clbad among India's 1.3 billion people has prompted the Thai authorities to improve their estimates of the number of Indian visitors. At least 10 million are expected to arrive in 2028, more than five times as much as in 2018. This type of growth trajectory would mimic the rise of Chinese tourists, which went from 800,000 in 2008 to more than 10 million. last year.
China will remain an important market, but its growth potential will probably be lower in the coming years. India, meanwhile, is set to become the new story of Thai tourism expansion, an industry that accounts for about 20% of gross domestic product.
Chinese visitors currently account for 28% of all foreign arrivals, well ahead of Indians with 4%. But in a decade, Indian arrivals are expected to reach about 15% of the total, while the Chinese should grow slightly around 30%.
"The incoming Indian market could rival that of China," said Pisit Puapan, executive director of the Bureau of Macroeconomic Policy at the Ministry of Finance. According to Mr. Pisit, India's strong growth has also offset the decline in markets such as Europe.
According to Bloomberg Intelligence, Chinese arrivals could fall this year from 2018 as the yuan has weakened against the baht. This could deter Chinese tourists more cost conscious or see them spend less if they make the trip.
The slowdown in the tourism market and the repatriation of dividends have helped produce Thailand's first current account deficit since 2014. The country's projected economic growth has already been revised to its lowest level in four years, with exports also stagnated.
Great traveller
There are more direct flights between Indian and Thai cities, which partly explains the increase in the number of visitors to Bangkok, Phuket and its surroundings. They are attracted by Thai gastronomy and shops, and its beaches are becoming major attractions.
The fifth Indian airline, GoAirlines India Pvt, is currently linking three Indian cities to Phuket and plans to add seven more. IndiGo of InterGlobe Aviation Ltd launched services on the tropical island at the end of last year.
Thai AirAsia Co Ltd, the Kingdom's largest low-cost carrier, saw a 20% growth in the number of pbadengers traveling between India and Thailand in the first quarter of 2019 compared with the previous year. It now operates 47 weekly flights from Bangkok to nine Indian cities and plans to add a new destination.
While India is expected to overtake China in eight years and become the most populous nation in the world, and the middle clbad should continue to grow, the Kongsak of the Thai Hotels Association is cautious but optimistic for the future.
"We expect the industry to continue to grow," he said. "But it's important to spread the risk and have a good mix of nationalities on the market. We can not rely on a single market. "
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