TAT Final

THAMMASAT CONSULTING
Tourism authority of Thailand
By: Thammasat consulting

Chananun - Panthira - Pantharee - Tanwa
Agenda
• Company Profile
• Situation Analysis
• Issue Identification
• Recommendation
• Implementation
• Financial Justification
• Key Success Factor
• Conclusions
Company Profile
Tourism Authority of Thailand (TAT)
• Establish in 1969
• Government Organization
• Objective:
– To Supply Information and Data on Tourist Area to Public
– To Promote and Publicize Thai Tourism Industry
• Since 1982 tourism industry provides highest source of
income for Thailand
Situation Analysis
External Forces
Major Intense Regional

World Crisis Competition
•SARS
• Bird Flu
• Tsunami
Great Reduction in
Number of Visitors
10.6M  5.5M
Situation Analysis
External Forces
Major Intense Regional

World Crisis Competition
Aggressive Marketing
Campaign
- Malaysia: Truly Asia

- Uniquely Singapore
- Explore China
- Hong Kong:
Live it, Love it!
- Thailand:
Happiness on Earth
Situation Analysis
Customers
Duration of Stay
Wedding and
Zero Dollar Honey Moon 30% World Growth
Tourists
MICE 10% World Growth
Purchasing Power
Low Expenditure per Tourist
Demand Surpassing Capacity  Negative Impact to National Resources
Issue Identification
Issues Objectives
Short Term
To Regain the Confidence to Southern Coastal

Tsunami
Attraction and Achieve Pre-Tsunami Number of
Recovery
Visitors within 3 years
Medium Term
Refine
Tourism Product To create Thailand as a World Class Destination
Quality
Increase Tourist
To Increase Total International Receipt with the
Expenditure per
Rate of 120% within 5 years
Person
To Quickly Recover from the Tsunami Crisis and

Refine Tourism Product Quality in order to establish Thailand as a
World Class Tourist Destination with the Total Tourism Revenue of
1,400 Billions Baht in the next 5 years
I. Tsunami Recovery Strategy
Recommendation
Tsunami Recovery Strategy

Internal Development
Induce Immediate
• Infrastructure Government Action
4 Coastal Destinations:
Revitalizing Government
-Pha Tong Beach
Ruined Sites
• Accommodation Tailored
-Kamala Beach IncentivesConcept
Marketing for
• Tourist Attractions Private Sectors
-Phi-Phi Island For Each Destination
-Koh Lak
Safety • Natural Disaster Warning System
Enhancement • Tighter Crime Protection
“ The Re-Shine of Andaman Pearl”

Promote 4 Major Coastal Destinations as Exotic, Beautiful, and Safer Beaches
Achieve 10.6 M of Visitors to South Coastal Area within 3 years
II. Tourism Product
Quality Enhancement
Recommendation
Tourism Product Quality Enhancement
Product Aspects Approaches
Tourist Attractions Condition Promote “Eco-Tourism”
Infrastructure
Safety
Hospitality
Information
Recommendation
Tourist Attractions Condition
Infrastructure Upgrading & Penetrating
Safety
Hospitality
Information
Recommendation
Infrastructure
Increase Police Force and

Safety
Emergency Centers
Hospitality
Information
Recommendation
Infrastructure
Safety
Hospitality “I Farang” Campaign
Information
Recommendation
Infrastructure
Safety
Hospitality
Information “E-Tourism”
Recommendation

Product Aspects Approaches BENEFITS
Tourist Attractions Cease Deterioration Rate of

Promote “Eco-Tourism”
Condition National Resources
Infrastructure Upgrading & Penetrating More Convenient + Better

Reached Transportation System
Increase Police Reduce Crime Rate and Increase

Safety Force and
Emergency Centers
Visitor Confidence
Hospitality “I Farang” Campaign Strengthen the “Core

Competency” of Thailand
• Ease of Info Access

Information “E-Tourism”
• Tackle the Emerging Group of E-
Tourists
To Create Thailand as a World Class Destination

III. Target Selection Strategy
Recommendation
Target Selection Strategy

Target Focus
Duration of Stay
• Long Stay
• High Purchase Power
Wedding+
Honeymoon • Potential Return For
Leisure Visit
Low Cost
Travelers
MICE
Purchasing Power
Recommendation
Target Selection Strategy

Target Focus
• MICE
• Wedding and Honeymoon
Positioning
MICE
Thailand: Premium Destination Thailand:
“Perfect Balance between Exotic Business with Pleasure
Place and Modern World”
Wedding & Honey Moon
Current Marketing Campaign 2005-2008
Happiness on Earth The Siam Romance
To Increase Total International Receipt with the Rate of 120% within 5 years
Activities
2005 2006 2007 2008 2009
Tsunami Recovery
Internal Development Site Restoration
“Re-shine of Andaman Pearl”

Safety System Installation
Campaign
Refine Product Quality
Infrastructure Upgrade
Marketing Campaign PrepareLaunch Follow Up
Marketing Strategy
MICE
Thailand – Business with Pleasure PrepareLaunch Follow Up
Couple
Siam Romance
Quantitative Justification
2004E 2005F 2006F 2007F 2008F 2009F
Foreign Tourists in Millions 11.65 9.90 10.79 11.87 12.82 13.85
16,000,000
14,000,000 Recovery in 3 years

12,000,000
10,000,000 Back to normal rate

8,000,000
6,000,000
Tsunami Impact
4,000,000
2,000,000
0
2004E 2005F 2006F 2007F 2008F 2009F
2004E 2005F 2006F 2007F 2008F 2009F

International Receipt (Billions
Bath) 709 632 744 917 1,139 1,476
1,600,000
1,400,000
Recovery in 2 years
1,200,000
1,000,000
800,000
Increase in number of Tourist
600,000
400,000
Increase Expenditure
200,000
0
2004E 2005F 2006F 2007F 2008F 2009F
Cost Estimation (Expenses to TAT)

Marketing Expenses
Re-shine of Andaman Campaign 500M / Year
Eco-Tourism Campaign 100M / Year
I Heart Farang Campaign 150M / Year
Total Cost is 1,640,000,000 Baht per Year
Happiness on Earth Campaign 800M / Year
Subsidizing Expenses
Information system for E-Tourist 90M / Year
Renovation and Standard Improvement Expenses will be financed by Local

Government and Private Sectors.
Financing • Increase in Government Budget Allocation

Method
• from 0.7% to 1.1% of the International Receipt
Estimated Result of the Investment (5 years)

Number of Foreign Tourist 39.58% Increase
Expenditure per tourist 75% Increase
Total Foreign Currency Income 133.45% Increase
Key Success Factor
Quality of the Effective

Tourist Sites Marketing
Strategies
Corporations
Among Sectors
Conclusions
Issues Strategies
• Internal Development
Tsunami • Marketing Campaign
Recovery “ The Re-Shine of Andaman Pearl”
• Tourist Attractions Condition

Refine • Infrastructure
Tourism Product • Safety
Quality • Hospitality
• Information
•Target Selection
Increase Tourist •MICE
Expenditure per •Couple
Person •Positioning
“ Thailand as a Perfect Balance between
Exotic Place and a Modern World ”
To Quickly Recover from the Tsunami Crisis and

Refine Tourism Product Quality in order to establish Thailand as a
World Class Tourist Destination with the Total Tourism Revenue of
1,400 Billions Baht in the next 5 years
Back Up Slide Navigator
Tsunami
• Strategy for tsunami recovery
• Government incentive for private sector
• Tsunami Early Warning System
• The Re-shine of Andaman Pearl Campaign
Product Development : Campaign

• Eco-tourisms definition
• I “Heart” Farang
• E-tourism
Mice/Couple, Positioning
• Happy on Earth Campaign MICE
• Happy on Earth Campaign Wedding/Honeymoon
• Why MICE and Wedding/Honeymoon?
• Perfect Balance Between Exotic Place and Modern world
Others
• TAT’s long term issue identification?
• How to solve uncontrolled tourism development?
Financial Navigator
• Quantitative Analysis Justification

• Cost Estimation Justification
• Total Foreign Customer Estimates
• Tourist Expenditure per Person
• Financing Method
• Tsunami Recovery Quantification
Back Up
Strategy for tsunami recovery
• Set up Tourism Restoration Committee

– Full authority and resources to restore Andaman Tourism
• Beach Campaign
– Patong Beach: Safe Beach and Recreational Activities
– Kamala Beach: Safe Beach and Special Culture Orientation
– Phi Phi Island: A paradise island for relaxing, diving and other
adventure activities.
– Khao Lak: Exclusive Beach Resort for Couples and Families
• Organizing a number of Mega Tourism Events
– Happiness Andaman
– Tsunami Memorial Day
– Colorful Andaman
Back Up
Tsunami Recovery:
Government incentive for private sector
• Goal: To encourage investment from private sector
• Private sector: Hotel, resort, shopping mall
• Incentive:
– Tax reduction/exemption
– Subsidization
– Help finding partners
– Etc.
Back Up
Tsunami Early Warning System Province Total Warning

Tower
• Warning Towers along Thailand’s Andaman Phang-nga 18
Coast Phuket 20
• Location Krabi 11
– Andaman Sea — Phang-nga, Phuket, Krabi, Ranong 5
Trang, Ranong and Satun. Satun 14
• Total of 79 warning tower Trang 11
Total 79
Benefits
• Reduction in the loss of life and property in
coastal communities
• Elimination of false alarms which result in high
economic costs for unnecessary evacuations
• Ensure early detection of tsunamis and to
acquire data critical to real-time forecasts.
Back Up
The Re-shine of Andaman Pearl Campaign

• Objective: To promote 4 majors costal destination as exotic, beautiful and safer
beaches
– In order to gain back customer confidence to the coastal area
• Beach Campaign
– Patong Beach: Safe Beach and Recreational Activities
Focus : Modern Beach City  Surfing, Sunbathing, Parachuting, Water-Skiing
– Kamala Beach: Safe Beach and Special Culture Orientation
Focus : Enriching Cultural Beach Site
– Phi Phi Island: A paradise island for relaxing, diving and other adventure
activities.
Focus : Retain its Concept of Paradise Island  Diving, Bungy Jumping, etc.
– Khao Lak: Exclusive Beach for Couples and Families
Focus : Relaxed Beach Resort
• Mega Tourism Events Communication channel :

– Happiness Andaman • Public Relation
– Tsunami Memorial Day Set up road show for
– Colorful Andaman foreigners to visit
Southern part of Thailand
•Magazine
•Internet
Official site of TAT
Back Up
Eco-tourisms definition
• A form of tourism in natural areas that is based on the

responsibility towards the ecological system of the area.
• Sustainable tourism development with emphasis on community
participation, safety of tourists and non-exploitation.
How
• To promote and continuously educate Eco-tourisms through;
various communication channels. (i.e. Internet, on-site, Radio, TV)
• Uses celebrity endorsement
Target at:
• Local
• Visitors
Benefit
• Reduce natural exploitation
Back Up
I Farang Campaign
• Objective: “To make Thais a good host”

– Friendliness
– Honesty
– Punctuality
• Create awareness for Thais to be aware of the importance of the tourism

sector
• Message:
– Being a good host contribute to the success of Thailand tourism industry
– Successful tourism industry contribute to National wealth
• Result:
– Strengthen Thailand’s competitive advantage – welcoming hospitality
– Repeat visits
Back Up
E-tourism
• What is E-tourism:
– Increase accessibility of tourism information via internet
– Enable online booking
– Offer personalized product and service
• Rational:
In this era, countries are moving toward new digital economy.
E-tourism is a new channel that will attract and retain visitors to Thailand
E-tourism is critical to cope with changing demand
• Implementation tactic:
– Cooperation with private sectors, i.e. hotels, credit cards, shopping centers
– Co-promotion will give mutual benefits to both parties
• Communication channel: Internet
Back Up
Position: Thailand = Perfect Balance Between

Exotic Place and Modern World
• Rational:
– Current marketing strategy is placing too much emphasis on
traditional image of Thailand which is not a true picture of the
present situation and might create a wrong image
– Thailand is becoming a modern society with the more international
lifestyle. Our proposed marketing position is aiming to avoid creating
wrong expectation which could lead to dissatisfaction.
– To support our long term goal of creating Thailand as a multi-

faceted destination
Back Up
Why MICE and Wedding/Honeymoon?
• MICE:
– More resilience than other sectors during economic downturn
– Heavy spenders
– Represent large proportion (20%) of the total international tourist
– High growth segment (10% per year)
– 40% of visitors return for leisure visit
• Wedding/Honeymoon
– Fast growing segment
– Entail several tourist i.e. family and friends of the couple
– Long duration of stay
– High spenders (three times more than they would on the average 5-day
holiday)
– Suitable with the existing product offering of Thailand
Back Up
Happy on Earth Campaign MICE

• MICE – Thailand: Business with Pleasure
– Product
• Facilities:
– Increase facilities for business center
– New exhibition center
– Renovate business center
• Interesting combination packages
– Message:
Thailand are now ready to hold international business events. The
participants are able to accomplish their business task while enjoying the
beautiful sites in Thailand.
– Primary Target: regional customer i.e. Japan, China, India, South
Korea (Rational: already have existing manufacturing based in
Thailand)
– Communication Channel: brochure, TV commercials, internet,
tourism magazines, etc.
Back Up
Happy on Earth Campaign Wedding/Honeymoon
• Wedding/Honeymoon – The Siam Romance

– Product Focus:
Wedding
• Offer wedding service at exotic places
• Special wedding package: wedding gown, photographers, various religious
conduct, wedding planner, etc.
Honeymoon
• All-inclusive resorts offer: include airport transfer, room, all meals, facilities,
extra activities, etc.
• Offer premium service and special honeymoon price package
– Message:
Thailand will give the honeymooners the sweetest and unforgettable experience that will
remain with the couple forever.
– Target: Globally
– Communication Channel: brochure, TV commercials, internet, tourism
magazines, etc.
Back Up
How to solve Uncontrolled tourism development?

• Immediate action: Strengthen regulations
i.e. enforce strict controls on new infrastructure development
• Penalty include fine and imprisonment
• Second action: Human resources management

– Provide training sessions to the key managers about how to implement
appropriate development & control measures, and on-site
management system
– Strengthen the management of these natural tourism resources
• Third action: Provide Education

– To emphasize the importance of healthy development without
destroying natural resources
– To emphasize on the negative effect of natural resources deterioration
Back Up
TAT’s long term issue identification?

• Issue: Product indifferentiation
• Currently: Thai tourism based on beach oriented product

• Goal: Establish Thailand as a multi-faceted tourist destination
• Theme: “Discover More of Thailand”

– To inform tourists about Thailand tourism product variety – in addition to
beaches
• How?
– Increase manmade tourism e.g. entertainment complex, shopping centers,
museum, etc.
– Hold world event to attract tourists
– Promote other natural destinations besides beaches i.e. forests, mountains,
etc.
– Promote different sports/adventurous activities e.g. rock climbing, skydiving,
etc.
– Promote both traditional Thai culture and the modern Thai society
Back Up
Finance Back-Up
Quantitative Analysis Justification

• TAT is a government organization, not a business organization.
• TAT doesn’t make money by itself, it is GIVEN money by the central
government.
• It’s main goal is NOT to maximize its profit. It is created in order to support
the tourism industry in Thailand
• Therefore, It is not practical to use the organization revenues and net
income to measure the result of our strategies.
• So, we used the incoming tourists and the total foreign currency income to
Thailand.
• This logic also applied to our return on investment, since the cash inflows
into the organization is almost irrelevant to our strategies. So we decided to
use the estimated results of the strategies (Total international receipts,
tourists expenditures) instead of the conventional financial measurements
(NPV, IRR, etc.)
Back Up
Finance Back-Up
Cost Estimation Justification

• TAT is created to promote and publicized Thailand. Most of the work done
aside of marketing activities are done indirectly through private sectors and
local governments (subsidizing and negotiating).
• The renovations and improvement of standard will be done largely through
local governments and private sectors, therefore it will not be a cost burden
to TAT organization itself.
• Since the tourist assets are NOT owned by TAT itself, the improvement
and renovations cannot be count as our capital investment.
• Through those logics, we have concluded that all the costs regarding to
our recommendations are expenses that will appear on the organization’s
income statement, and there is no capital expenditure at all.
Back Up
Finance Back-Up
Total Foreign Customer Estimates

Number of Foreign Tourists Estimation
2003 2004E 2005F 2006F 2007F 2008F 2009F
Estimated Number of
Foreign tourist 9,957,265 11,650,000 9,902,500 10,793,725 11,873,098 12,822,945 13,848,781
Change in Number of
Tourist - 17.00% -15.00% 9.00% 10.00% 8.00% 8.00%
• 2005, TAT estimates that the number of foreign tourist will diminished by
15% due to the Tsunami.
• However, through our strategies, we’ll be able to recover the previous
number within 3 years.
• After that, the tourists number should grow normally as forecast by TAT,
since our strategies do not emphasized on increasing the number of
tourists.
Back Up
Finance Back-Up
Tourist Expenditure per Person

Expenditure per Tourist Estimation
2004E 2005F 2006F 2007F 2008F 2009F
Estimated Expenditure per person 60,822 63,864 68,973 77,249 88,837 106,604
Growth in Tourism expenditure - 5.00% 8.00% 12.00% 15.00% 20.00%
• In 2005, our happiness on earth strategy is just in the initial stage. Also,
most of our effort will be on the recovery of Tsunami strategy.
• From 2007 onward, the expenditure per person should increase at a rapid
rate.
Back Up
Finance Back-Up
Financing Method
• Since we are a government organization, 97% of revenue are from the

budget allocation of the central government.
• Currently, the allocation rate is 0.7% of the total international receipt from
tourism industry.
• However, in the year 2005, both the number of tourists and the total
international receipt will take a heavy hit from Tsunami. Thus, in 2005, the
government budget allocate to us will not be enough to finance our strategy
to recover tourism industry.
• Therefore, it is absolutely vital for us to negotiate with the central
government to increase the allocation % from 0.7% to 1.1%
• After 2005, we can decrease the percentage a little year by year due to
the increase in total international receipt, and it can be decrease to normal
rate of 0.7% in 4 years.
Back Up
Finance Back-Up
Tsunami Recovery Quantification

Tsunami Province Tourism Estimation (Total, both local and foreign)
2004E 2005F 2006F 2007F 2008F 2009F
Number of Tourist 10,600,000 5,548,040 6,657,648 8,255,484 10,732,129 14,488,374
Total Expenditure (Millions B) 130,600 71,774 93,019 129,185 193,131 312,872
Estimate Expenditure per Person 12,321 12,937 13,972 15,648 17,996 21,595
Growth in Number of Tourist - -47.66% 20.00% 24.00% 30% 35%
Growth in Expenditure per Person - 5.00% 8.00% 12.00% 15.00% 20.00%
• TAT has estimated that the tsunami will cause a 47.66% decline in
number of tourism to the southern provinces in 2005.
• Through our Reshine of Andaman Campaign, we would be able to recover
the number of tourist by 2008
• The total expenditure will recover 1 year sooner due to the increase in
expenditure per tourist resulting from our strategy.

TAT Final

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THAMMASAT CONSULTING

Tourism authority of Thailand

By: Thammasat consulting

Tourism Authority of Thailand (TAT)

Major Intense Regional

Major Intense Regional

- Malaysia: Truly Asia

MICE 10% World Growth

Low Expenditure per Tourist

Demand Surpassing Capacity  Negative Impact to National Resources

To Regain the Confidence to Southern Coastal

To Quickly Recover from the Tsunami Crisis and

Tsunami Recovery Strategy

“ The Re-Shine of Andaman Pearl”

Achieve 10.6 M of Visitors to South Coastal Area within 3 years

Tourism Product Quality Enhancement

Product Aspects Approaches

Tourist Attractions Condition Promote “Eco-Tourism”

Tourism Product Quality Enhancement

Product Aspects Approaches

Tourist Attractions Condition

Infrastructure Upgrading & Penetrating

Tourism Product Quality Enhancement

Product Aspects Approaches

Tourist Attractions Condition

Increase Police Force and

Tourism Product Quality Enhancement

Product Aspects Approaches

Tourist Attractions Condition

Hospitality “I Farang” Campaign

Tourism Product Quality Enhancement

Product Aspects Approaches

Tourist Attractions Condition

Tourism Product Quality Enhancement

Tourist Attractions Cease Deterioration Rate of

Infrastructure Upgrading & Penetrating More Convenient + Better

Increase Police Reduce Crime Rate and Increase

Hospitality “I Farang” Campaign Strengthen the “Core

• Ease of Info Access

To Create Thailand as a World Class Destination

Target Selection Strategy

Target Selection Strategy

Internal Development Site Restoration

“Re-shine of Andaman Pearl”

Refine Product Quality

2004E 2005F 2006F 2007F 2008F 2009F

Foreign Tourists in Millions 11.65 9.90 10.79 11.87 12.82 13.85

14,000,000 Recovery in 3 years

10,000,000 Back to normal rate

2004E 2005F 2006F 2007F 2008F 2009F

Cost Estimation (Expenses to TAT)

Renovation and Standard Improvement Expenses will be financed by Local

Financing • Increase in Government Budget Allocation

Estimated Result of the Investment (5 years)

Quality of the Effective

• Tourist Attractions Condition

To Quickly Recover from the Tsunami Crisis and

Product Development : Campaign

• Quantitative Analysis Justification

Strategy for tsunami recovery

• Set up Tourism Restoration Committee

• Goal: To encourage investment from private sector

• Private sector: Hotel, resort, shopping mall