A FOREIGN COUNTRY STUDY REPORT ON TOURISM SECTOR" AT THAILAND Project report submitted for the partial fulfillment of the

MASTER OF BUSINESS ADMINISTRATION (2012) Semester-3 Submitted by: Dimple Bimra Purvi Patel 11MBA013 11MBA041

Submitted to: Mr. Gunjan Shah

SHRIMAD RAJCHANDRA INSTITUTE OF MANAGEMENT AND COMPUTER APPLICATION GOPAL VIDYANAGAR

ANALYSIS OF TOURISM INDUSTRY

The Thai tourism industry continued its strong performance in the first six months of 2012, with total arrivals of 10,496,789, up 7.60% over the same period of last year measured by the country's tourism authority

Major flooding during Thailand's monsoon season, particularly between October and December, has weighed on tourist arrivals. Tourism Ministry Secretary Suwat Sittilor said in December that arrivals in November had fallen by 18% year-onyear (y-o-y), as the floods affected some of Thailand's major tourist sites. Sittilor warned that the damage to the industry could cost up to US$825mn, and this could yet rise further.

The flood damage is particularly concerning for Thailand as tourist arrivals had been rebounding strongly in 2011, as a result of improving political stability. The y-o-y arrivals growth had been growing at nearly 20%, positioning Thailand well for a strong recovery. Despite the damage to infrastructure, the floods had provided only a short-term interruption to Thailand's strong recovery, boding well for continued arrivals growth in 2012.

Flood Damage Hits Bangkok and Southern Areas. The monsoon season floods hit a number of key tourist areas, particularly in the centre. Bangkok was affected, although not so much in the central tourist sites. However, the city experienced some difficulties getting supplies in and out of the area, deterring tourists from visiting.

Major tourist resorts such as Phuket, Krabi, and Chiang Mai in the north were relatively unaffected. In particular, greater political stability in 2011 allowed tourist confidence to recover, while the global economic recovery in the first part of the year gave a further fillip to arrivals.

Overall, tourist revenue reached THB734.6bn (US$23.7bn), a 23.9% y-o-y increase.

It was particularly impressive that arrivals from Europe rose by 28.9% y-o-y, despite the ongoing economic problems in the eurozone, while Asian arrivals rose by 5.3% y-o-y.

Targeting Medical Tourism Thailand is building up its medical tourism sector, aiming to benefit from the nearby example of India. The government estimates that 1.6mn foreign nationals receive medical treatment in Thailand each year, with many of these visiting specifically for this reason.

Knowing that the tourism industry is one of the most competitive business environments in Thailand, tourism associations are forecasting arrivals to reach nearly 20 million in 2012 and 31.8 million in 2015.

In January 2012, Thai Airways announced that its new airline, Thai Smile, will begin operations in July 2012.

Above diagram represents that major tourist in Thailand are from East Asia and Europe; and other destination such as America, South Asia, Oceania, Middle East and Africa represent least tourist in Thailand.

SWOT ANALYSIS
Strengths: Thailand is known as Suvarnabhumi- Capacity to handle 45 million travelers a year & eventually 100 million with planned expansion will only make a Thailand more convenient destinations. Thai tourism sector include a strong brand image of its sub-sectors and resiliency to domestic problems. In many travel magazines and lifestyle surveys, Thailand is ranked in the Top Ten for the quality of beautiful beaches, entertainment and dining, value of products, recreational facilities, and shopping. Every year, Thailand reap many awards in each of these categories. Thailands strong performance in 2011 has encouraged optimism among tourism officials, with the government targeting 19.5mn visitors in 2012. In April 2012 Thailand welcomed 1,659,021 international tourists, a slight increase of 6.87% over the same month last year. ASEAN countries grew 4.39% largely due to the drop of tourists from Malaysia by 22.16%. There is also decrease in arrivals from Australia (71558) by 7.75%, US (56184) by 2.53%. The arrivals from China continued to surge by 42.12% in April (196,192) and it replaced Malaysia as the top market; There is also increased in arrivals from Russia(106055) by 20.01%, Korea(79783) by 14.21%, India(79130) by 10.2%, Laos(73552) by 10.22%, UK(73402) by 47.9%. There was substantial increase of 16.62% in Japanese tourists(103,657) compared to April 2011 when a tsunami and earthquake in Japan virtually brought outbound travel to a standstill. Weakness: Weaknesses in the Thai tourism sector include the political turmoil and the effects of the sector on the country's environmental and cultural heritage. Particular focus is given to the instability of the domestic political scene. It points out that there is poor protection of intellectual property in the country, as well as

its difficulty to attract foreign direct investment as a result of growing regional competition and domestic political issues. Language problem & less heritage building.

Opportunities: According to Mayor Ittipol Khunplume, Pattaya will require an estimated budget of 15 billion baht for 132 projects to be implemented in the city and related districts from 2012-22.The projects include improving public transportation services such as offering shuttle bus service in town, building a road linking with the motorway, extending the rail link service from Suvarnabhumi Airport to Pattaya and building new ports in Pattaya and Koh Lan. The Pattaya also plans to invest in beach recovery projects, promote new tourism routes such as community tourism in Na Kluea and green tourism at Koh Lan and Koh Phai. Projects to promote sustainable tourism such as educating locals about organic farming, allocating areas for biking, improving the environment in Koh Lan and other tourism destinations in Pattaya and nearby areas are also going to implement. The opportunity is huge to continue investing in Thailand, especially in the hotel and resort business, and in the process exacerbate the oversupply plaguing many key destinations such as Bangkok, Phuket, Pattaya, Chiang Mai, Hua Hin and Samui.

Threats: Other countries in south-east Asia (Malaysia, Vietnam, Cambodia, Indonesia etc) where they have similarity in geography. The country's uncertain political situation poses threat to broader political stability. It notes a substantial reduction in Thailand's exposure to capital outflows. Threats facing the government include the increased violence in southernmost provinces.