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Is Thailand really losing Russian arrivals?

PHUKET; The news about the decrease in Russian arrivals to Thailand prompted an active discussion in social media last week with Thai nationals and foreign residents alike sharing their views of Russians as a tourists.


Anton Makhrov

Tuesday 9 September 2014, 04:43PM


Sunbathers on a Crimean beach. Photo Vyacheslav Argenberg
Sunbathers on a Crimean beach. Photo Vyacheslav Argenberg

The war of words turned out to be fierce enough for all sides to forget about the main topic: the decrease in Russian arrivals and thus in the revenue of the Thai tourism industry.

According to Kasikorn Research Center in 2014 Thailand will see 1.65 million visitors from Russia – 5.5 per cent down from 1.75 million last year. Is this a scary figure for the industry?

The answer is yes and no. The drop alone is not dramatic. But things are not looking bright if what we see is just a beginning of a long-term negative trend. So let us have a closer look at the figures and the factors behind them.

Both Russian and Thai state agencies have already admitted that 2014 is a tough year for Thai tourism. Political disturbances followed by martial law, the coup and curfew hit the arrivals greatly.

Most significantly, all those events took place during the high season from November to May. And the 5.5 per cent drop in Russian arrivals can be explained by the consequences of the negative factors listed above.

Russian tour companies were strongly advised by the Russian authorities to cancel or limit trips to Bangkok and that affected the figures. At the same time Phuket benefited from all the disturbance simply because companies and their clients switched to this destination instead of places perceived as risky.

So 5.5 per cent is a reasonable drop nationwide. In Phuket the drop was less than the national one so now it is time to regain the losses with the new high season coming and the National Council for Peace and Order (NCPO) guaranteeing safety.

Taking all these observations into account the future of Phuket tourism looks bright.

Zurich Bread

There remains, however, a list of Russian "domestic" factors that Thai authorities have no way of influencing.

  • This year Russian authorities started promoting domestic tourism, notably at Sochi (with its Olympic facilities) and Crimea (desperately needing to replace lost Ukrainian tourist arrivals). Both resorts can hardly be listed among Thailand’s competitors in the November-to-May season (most of it winter in these places), but have been able to replace it in case of urgent need.

  • Russia’s economy has been badly hit by the consequences of the Ukrainian conflict and the sanctions imposed by the USA and EU. The Russian currency has dropped significantly against both the USD and the Euro -- and the Thai baht. It is widely recognised that leisure and travel expenses are among the first to be cut when people need to save money.

  • The wave of bankruptcies among Russian tour companies has made people less confident about their safety wile travelling abroad (let alone the negative effect for the industry proper).

  • A new tax on international flights is being currently discussed in Russia. If accepted it will significantly increase the cost of a vacation in Thailand, thus making domestic destinations more attractive.

  • Another proposal being discussed presupposes compensation of up to 50 per cent of travel expenses for those choosing domestic resorts. And if these two drafts are accepted as law it will definitely effect international tourism.

None of the five factors alone can threaten Thailand. Separately they are harmless and could not even result in another 5.5 per cent drop. But if combined, they could cause real problems for Thailand.

Just a simple example: Nowadays it is cheaper for a person from Siberia to fly to Thailand than to Sochi. But if overall incomes go down, international flight costs climb and government compensation become real, the possibility of taking advantage of government support and spending Christmas in Russia becomes a definite threat to Thailand. Though not this season, one hopes.

 

 

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simon01 | 11 September 2014 - 13:50:59

But the good thing is the beaches are back to how they were. Long white sandy beaches, palm trees warm sea. Now they are not covered with sun loungers in there millions. You can walk on the sand or sit under a palm tree where before all the beach was covered in sun beds and all shade was for the beach vendors use. There was no space on the beach for tourists and the only shade available to tourists was for sale at 200 bht+ as the Thai vendors had all the palm trees. Now people can sit where they like, swim where they like without getting robbed or abused. Phuket is getting back to an island paradise which is what made it popular in the first place. Long may the clean up continue 99% of people love the changes. Keep it up.

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simon01 | 11 September 2014 - 13:41:28

Good. If the Russians start leaving then the rest of the world will start to come back. We may lose 10,000 Russians but will gain 100,000 other nationalities. On top of that, with Russians starting another European war its best if the world stops all visas to Russians until they learn to behave properly. keep them in Russia.

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ginga baker | 11 September 2014 - 10:04:46

The less Russians,the less unhappy faces in Thailand.they are a very 'rustic" race.Any 7/11 is their favourite tourist attraction to visit.

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Jacky | 09 September 2014 - 20:59:50

Im a South African and been going to Phuket for 13 years. . . .will be SAD to go, and it be all different ! No beach bars, or eating places, no beach boys. . . . .cant imagine !!!!

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Jacky | 09 September 2014 - 20:57:21

Please bring back all the beach stuff, that made Phuket and Thailand unique. . . . .

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Jacky | 09 September 2014 - 20:56:03

And then you take all the Beach chairs and umbrellas away. . .all the thing that make Phuket and Thailand the wonderfull holiday that you needed. . . .No man !!

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trevjay | 09 September 2014 - 20:53:45

"In Phuket the drop was less than the national one "

So waht is the figure for Phuket?

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