Thailand - Travel & Tourism: Government initiatives drive market growth (Strategy, Performance and Risk Analysis)
Thailand showcases strong potential in terms of domestic and international tourism. With regards to international arrivals, Thailand ranked ninth after Mexico, whilst in terms of volume growth of international arrivals, Thailand ranked 12th after Sweden in 2016.
In the car rentals segment, Thailand ranked tenth after Spain based on the number of rental days, and third after Colombia in terms of volume growth in the number of rental days. Thailand ranked seventh after France and 11th after Czech Republic based on the number of rental occasions with regards to volume growth. Growth of domestic tourism is a major driver behind the rise in the car rental segment as road is the preferred mode of transportation for domestic tourists.
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Passenger airlines revenue to increase over the forecast period
Thailand’s passenger airlines revenue increased at a CAGR of 8.5%, from US$11.9 billion in 2012 to US$16.4 billion in 2016, and is forecast to increase at a CAGR of 12.7% to reach US$29.3 billion by 2021. This is mainly due to increased revenue of full service airlines, which accounted for 83.9% of the total passenger revenue in 2016. Full service airlines’ revenue increased at a CAGR of 7.1% over 2012-16 to reach US$13.8 billion in 2016, and is forecast to increase at a CAGR of 12.1% to reach US$23.9 billion by 2021.
Group tourism from China drives hotel revenue growth
Thailand’s hotel revenue increased at a CAGR of 2.0%, from US$17.9 billion in 2012 to US$19.4 billion in 2016, and is forecast to increase at a CAGR of 5.7% to reach US$25.2 billion by 2021. Growth in this segment is primarily due to the rise of revenue from midscale hotels, which contributed 45.1% towards total revenue in 2016. Revenue for midscale hotels is driven by an increase in group tourism (wherein people travel in groups) predominantly from China. These hotels tend to register a 70.0% occupancy rate in Thailand.
Revenue per passenger to increase over the forecast period
Revenue per passenger declined at a CAGR of -2.4%, from US$517.2 in 2012 to US$468.8 in 2016. This is mainly due to the decline in charter airlines’ revenue per passenger, which fell at a CAGR of -4.5% during 2012-16 on account of the ban on charter airlines of Thailand from several countries. In April 2015, South Korea, China and Japan banned Thai charter flights due to significant safety concerns reported by the UN's International Civil Aviation Organization (ICAO).
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