Chiang Mai’s tourism odyssey

There has been a succession of rather gloomy statistics and predictions concerning the state of Chiang Mai and Thai tourism.

By | Thu 24 Dec 2009

It’s a New Year, and a new decade, so it is perhaps a good time to take a look both backwards and forwards at one of Chiang Mai’s biggest industries, tourism, which has received a battering in the last couple of years caused by a number of compounding factors. According to experts on the matter, we are going to have to seriously re-evaluate our approach, practice and marketing if we plan to become a world-class destination, or at least get the numbers back.

There has been a succession of rather gloomy statistics and predictions concerning the state of Chiang Mai and Thai tourism. The Nation (November 25th), revealed that advanced hotel bookings across Thailand for November and December were at 50-60 percent capacity _ lower than the 70 percent of the final quarter of 2008. Specifically in Chiang Mai, hotel bookings were ten percent lower than in the final quarter of last year _ reaching only 60%. Statistics (especially in Thailand, where they are often incorrect, and at times even contradictory) are not always reliable, though one thing seems certain; tourism is on a downwards spiral. According to another recent Nation article the Tourism Authority of Thailand (TAT) has revised its expected tourist arrivals for 2010 from 14 million to 13.7 million due to the world economic crisis and the kingdom’s political problems. In 2007 the total count of visiting tourists reached 14.46 million. All this is rather distressing, as tourism is a very important factor in Thailand’s economy, contributing an estimated 6.7% to the country’s GDP in 2007.

The Slump

Even though the final tally for Chiang Mai tourist numbers for 2009 is still being aggregated, the general public consensus is that this has been a very bad year. According to Vorapong Muchaotai, President of the Northern Chapter of the Thai Hotel Association (THA), there has been 35-40 % fewer international tourists visiting Chiang Mai this year. “Five-star and luxury hotels have suffered with lower occupancy this year. They have seen a decline of 25-30%, while lower and mid-range entrepreneurs are happy with the current market,” Vorapong explains.

He states that that the declining number of international tourists is a major factor in local tourism, though the number of Asian tourists is increasing. Chiang Mai saw 15 % more Asian tourists in 2009 compared to the year before.

Reinhard Hohler, travel writer and former tour director, has been in the tourism industry for nearly 30 years working as a conductor of educational tours in and outside of Chiang Mai and writing about the industry for several magazines. He too concludes that Chiang Mai tourism is in a slump. “It is down like never before. Because of the financial crisis, tourists from Europe cannot come. Prices are too high compared to their purchasing power. Nobody will pay 6,000 baht a night at a high end hotel,” says Hohler.¬† Chalermsak Suranant, director of TAT’s Chiang Mai office, still has no final verdict on this year’s turnover, since the numbers are not in and comparison is not possible. Chalermsak, however, is more optimistic. “For Chiang Mai the second quarter was not as good as last year. But things are looking up for the last quarter; the panda has lifted the numbers of Thai tourists. It is still too early to make conclusions, but I suspect the final result to be better than last year,” Chalermsak predicts.

Reasons for the Decline

Experts say there are a lot of different causes for the national tourism down-swing: the unstable and volatile politics, the global recession, panic over the swine flu and other pandemics, even concern for environmental impact of long haul travel. As for Chiang Mai, there are also many different takes on why we are seeing fewer visitors to our city. Basil McCall, former vice president of marketing for Amari Hotels & Resort and co-director of the Chiang Mai Charity Calendar project, delineates his reason for the slump. He mentions several fundamental reasons such as a long low season, a short average length of stay, environmental problems, the lack of a coast line, too few international flights, a low global awareness of the city, and the fact, that for many visitors, Chiang Mai is perceived as a stopover destination.

Vorapong also acknowledges the long low season to be a problem and elaborates that there is a lack of promotions in the period from May-October as well as an absence of activities during these months. And he agrees that the lack of beaches is a challenge. “A seaside city is always more attractive than a mountain city,” he says and also draws attention to the air pollution, which has a bad effect on our city – mostly in March and April, when the haze hits us.

Anchalee Kalmapijit, former president of SKAL International Chiang Mai and North Thailand, agrees that air pollution is a major problem regarding tourism in our city. In her opinion it is one more reason for people not to visit Chiang Mai and it affects everyone here. She would like to see the issue tackled. “We should get rid of some of the commercial billboards and add more of the needed information such as today’s air pollution level. This information should be available in every corner of town,” she states.

But Chalermsak from TAT disagrees. He does not see the local air pollution as an obstacle to attract visitors: “It is not a big deal. The government is trying to control it and personally I think it is getting better.”

Similar¬†to McCall, Chalermsak points out the dearth of international flights to Chiang Mai as a problem. He mentions that we only have 5 direct international destinations from Chiang Mai: Singapore, Seoul, Taipei, Luang Prabang, and Kuala Lumpur. In the past the number of international flights was higher, but because of the golden rule of ‘supply & demand’ the number of destinations, and flights, were cut. “We need more direct flights to come here,” Chalermsak says, “It is important. Because of the lack of routes, people choose Bangkok instead.” He also addresses the point that Chiang Mai is classically seen as a short stay destination. “This needs to be combated, if we are to see more favourable numbers of tourists in the future.”

Regarding political factors, Chalermsak goes on to mention the political unrest in the south, where confrontations between Muslim minorities and government forces periodically break out. “Some foreigners lack the geographical overview of our country and see these southern happenings as a reason to not visit Thailand. But in fact, this happens far away from any tourism areas,” he adds. Hohler too views the political situation as a contributor to the national, as well as Chiang Mai’s, regional problems. According to him, the ongoing red and yellow shirt conflict has a negative effect on tourism, while the historical record of multiple coups is also working against any progress. Specifically in Chiang Mai, recent disturbances regarding the prime minister’s scheduled visits and similar occurrences are counter-productive in his eyes. But not only Thai political issues are in play here, as Hohler sees it. “Generally, since 9/11 people in the west have been scared of travelling far away from home. They prefer to stay closer to their countries of origin because of a fear of the unknown.” Another aspect he mentions is the polymorphous Chiang Mai laws and regulations, which he sees at times as hindering tourism. Especially changing laws concerning closing times of bars and the selling of alcohol, he sees, as detrimental. “They shoot themselves in the foot sometimes. At times you can buy alcohol, and at other times you can’t. Some of the laws are ridiculous, the city is regulating itself to death,” he says.

McCall adds to the plurality of problematic issues criticising the business style of local entrepreneurs. “Our ‘marketing’ is mostly done by cutting rates, and quietly stealing business from each other,” he states. Anchalee also believes that there are too many hotels, spas and restaurants in the city, but not enough tourists to cover the supply. Regarding the ‘copy cat’ approach, meaning that one business owner mimics the product of an already existing entrepreneur, this is nothing new to her. “As a business owner myself, I can say that this has been happening for years. I do not think that there is any other way of escaping being copied, but maybe to make your product more advanced and harder to duplicate. Copying is part of Thailand. People copy each other when there is success,” she says.

Chalermsak further contributes with a criticism on Chiang Mai’s business styles. He believes that tourists are taken advantage of at times and are victims of two-tiered pricing. “Something like this might also scare away visitors,” he says.

Solving the Problem

In Hohler’s eyes, Chiang Mai has potential to expand its tourism industry. There is a growing awareness regarding green development and environmental sustainability and he sees eco-tourism as the future for the city and its surrounding areas. “Destinations which cater to mass tourism are losing out. But with its great natural surroundings, Chiang Mai is perfect for eco-tourism and should be able to bank these resources. It’s very important to think quality not quantity,” Hohler adds. While many tour operators now promote sustainable tours or green tours, one concern is the lack of regulation and standard of these claims.

Vorapong agrees that eco-tourism could be better developed and a profitable asset to Chiang Mai. He also believes that many of the man-made attractions, such as Chiang Mai Zoo, Night Safari, the International Exhibition and Royal Flower Garden, will continue to pull the number of visitors up to the north. While some of these attractions, such as the zoo, has indeed boosted tourist numbers, others such as the Night Safari, appear to have been spectacular failures.

To improve numbers in the coming years, Chalermsak believes it is important to attract tourists to stay in Chiang Mai longer than the current average, which he says is 4 nights. To change this, the city should be marketed as a key destination and not a transit point. This could be done by focusing on golf holidays and medical tourism at reasonable prices.

But as Chalermsak emphasises, some things we can do ourselves, while some things depend on other parties. He then refers us to the unstable situation in Myanmar and Laos. “Right now we live in a globalised world and naturally the political situations in these nations affect us. We could market a ‘one stop, two countries’ campaign, if their touristic appeal increased,” Chalermsak explains.

Hohler acknowledges this point and elaborates: “Myanmar has everything to offer tourists and if they clean up their act Chiang Mai will benefit greatly and will function as a travel hub for the whole region.”

Chalermsak throws a final but very relevant issue on the table of discussion: The promised R3A Highway, which is slated to connect Chiang Khong in Chiang Rai to Kunming in Southern China. He believes that this highway will not only heighten the number of Chinese tourists visiting Chiang Mai and the rest of Thailand, but also introduce a higher count of transit tourists from other countries. “90% of the highway is completed and now we only wait for the construction of a bridge over the Mekong River that will complete the connection. But a money problem is hindering the completion. There is a disagreement between China, Laos and Thailand,” he elaborates.

Regardless of how gloomy Thai tourism seems to be at the moment, TAT has high expectations regarding the future. TAT expects 14 million foreign tourists to visit the country next year and 90 million trips completed by domestic tourists, which should result in a turnover of 960 billion baht in 2010. Only time will tell, if these expectations will be met.