THE THAI DRUG ADDICT AND HIS CHINESE DEALER

All humans are addicts by their nature, when we find something that adds to our enjoyment or satisfaction we will always want more of it, that is just the way we are built and there are few exceptions to the rule, if any….

Some addictions may be good and healthy while others terrible and destructive.

Good addictions may be spending time with friends and having a drink, working, exercising, doing yoga, eating healthy and similar. All of these when done in moderation are just fine, but even good addictions may get out of hand and begin to carry a heavy weight in our life.

Then there are the bad ones such as smoking, cheating, lying, stealing and drugs. These are bad in any quantity and some more harmful than others.

Now, I am not writing this article to preach about what’s good for you and what isn’t, this is a business focused article with this twist introduction to highlight the immense need of business mix diversification.

China is a behemoth in terms of outbound travel and it will continue to grow.

In 2017 there were 145 million border crossings made by mainland Chinese nationals; 48% of these were to destinations in greater China, such as Hong Kong, while the remaining 52% went all over the world and these numbers represent a 16% growth year on year. 2018 is more of the same as numbers are growing well over 10% year on year.

THE MALDIVES STORY

I am reminded of when China exploded onto the Maldives scene which as classically a European focused destination and very quickly resorts saw that these new tourists from China are coming all the time, rather than just seasonally and can pay decent rates, even though their spend at the resorts was lacking in comparison to other nationalities. So some resorts took more and more Chinese guests until the point where their hotels became labelled as Chinese focused and other nationalities and operators started going elsewhere.

These resorts didn’t mind as they were making money and at that moment were fine; it was a cheap and easy drug and they were on the brink of overdosing which came all of a sudden when the bubble burst and The Maldives was replaced by the next ‘Hot’ destination and numbers of visitors dived.

The hotels who maintained a mix of many source markets took a hit, but managed well; while the ones that were getting high on the Chinese drug suffered for months or years as operators didn’t want to work with them right away and when they did, they insisted on lower rates to allow them back in their programs.

THE THAILAND INCIDENT

Thailand has been high on the Chinese tourist arrivals drug for a few years now which really took off with the Chinese movie ‘Lost In Thailand’ being released in 2012 which grossed over a billion Yuan, making it the largest ever movie in China at the time; even out grossing The Titanic which made 975 million yuan at the box offices.

Arrivals boomed month on month, first to Bangkok, then Pattaya, Phuket, Chiang Mai and by mid-2018 these guests were number one in almost every single destination within this amazing country, The Land of Smiles. This isn’t a bad thing really as the economy was booming and their spending power growing ever more and money flowed……

This is where the addiction starts to become dangerous as hotels, tour operators, bus companies, airlines and so on were all jumping on the bandwagon and taking their share; some more than others, but still, everyone got a piece and everything seemed beautiful.

REALITY CHECK

All good things must come to an end and for Thailand’s case, some blows came slowly while others were dead on punches. In October 2015 each Yuan could bring 5.7 Thai Baht which was the highest point for the Yuan against the THB in a 10 year history and this great buying power helped, but then it started to decline against the Baht in a slow but steady slope up to the day I am writing this article, the 6th of November 2018 and its now 4.65 THB to each Yuan, which doesn’t seem huge at an 18% devaluation, but when you see that the Yuan against its counterpart currencies in Vietnam, Malaysia and Indonesia is gaining in value, this compounds the issue.

Then in July 2018 there was the unfortunate incident where a tourist boat carrying over 100 Chinese tourists capsized in the Andaman Sea just off Phuket in rough seas where around half of all on board perished. The Chinese government requested official investigations and placed travel warnings in place and again, virtually the next day there was a double digit loss of business and not just to Phuket, but to all over Thailand as a result.

Then the hits kept on coming when on September the 27th 2018 a video went viral of a Thai security officer striking a Chinese tourist at Don Muang International Airport. What the reasons for this behaviour were, are not relevant, the problem is that the damage was done and tourist arrival numbers kept dwindling which lead to the Thai government having to resort to some desperate measures for Q4 2018 such as offering free visas for all nationalities who had to apply and pay for this visa upon arrival. Which for me is like placing a band aid over a broken leg.

China is the second largest economy in the world and has the largest population, so they will keep travelling and exploring the globe like their Japanese counterparts did in the sixties, seventies and eighties, but the moral of this story is to remind everyone associated with the hospitality industry to keep a close eye on your business mix and ensure that it remains balanced between multiple segments and source markets, so that if for any reason one or more drops off the radar, then your business doesn’t get so heavily effected and can bounce back faster.

I wish the country which I call my home, Thailand a speedy recovery to this hit for its tourist arrival numbers and am certain it will come back stronger than ever as this nation with its amazing people are a place that everyone wants to visit and people keep coming back again and again.

Thank you for reading and sharing,

Tareq Bagaeen

Founder & CEO

@ www.aQedina.com

E: [email protected]

 Below are links of other published articles that from me that you would find interesting:

https://www.dhirubhai.net/pulse/key-your-success-sales-tareq-bagaeen