The Takeoff Episode 02: How Startups Can Adapt and Pivot Sponsored This content is created collaboratively with one of our sponsors.
The blockbuster couldn’t have debuted at a better time for the Thai tourism market, which is already increasing its arrivals expectations as it becomes the most popular destination for the largest and most lucrative group of travelers on the planet.
“Lost in Thailand,” a low-budget Chinese comedy about the travels of two rival businessmen and a pancake-maker through Thailand, may help the Southeast Asian nation attract a record number of tourists this year.
More than 30 million people have seen the film since its debut on Dec. 12, according to China’s official Xinhua News Agency. China overtook Malaysia last year as Thailand’s biggest source of overseas tourists, and the film’s popularity could help increase total arrivals by 10 percent in 2013, according to the Association of Thai Travel Agents.
“The movie is helping boost sentiment and is increasing people’s desire to visit,” Sisdivachr Cheewarattanaporn, the group’s president, said yesterday in an interview. “The global economic situation isn’t a big issue as we’ve seen the tourism industry grow a lot despite the slowdown. People who love traveling continue to do it anyway.”
Thailand is luring Chinese tourists away from Japan after a territorial dispute between Asia’s biggest economies led to a travel boycott last year. The Chinese film follows the Hollywood blockbuster “The Hangover: Part II” from 2011, which was set in Bangkok and generated global interest in the country.
“China is really just blowing everyone out of the water,” said William Heinecke, chief executive officer of Minor International Pcl, Thailand’s biggest hotel operator. “In percentage terms, numbers from Europe and the U.K. are down. In actual numbers, they’re still the same or slightly higher. But the big growth is coming from Russia and China.”
China accounted for 13 percent of the 19.8 million visitors to Thailand in the first 11 months of last year, according to tourism ministry data. The Tourism Authority of Thailand forecasts total visitors may rise to 24.5 million this year, from an estimate of more than 21 million in 2012.
Thailand’s tourism industry has recovered from floods that swamped the ancient capital of Ayutthaya in 2011, echoing similar revivals after the 2004 Indian Ocean tsunami that devastated beach resorts and political protests that shut the main airport for two weeks in 2008 and turned inner Bangkok into a warzone in 2010.
“Foreign tourists are flocking back to Thailand,” said Sittidath Prasertrungruang, an analyst at Krungsri Securities Co. “The Thai tourism industry is very resilient, with diversified sources of travelers from China and India to Russia,” he said, adding that tourism-related stocks will outperform the benchmark SET Index this year.
Revenue from tourism accounts for about 7 percent of the nation’s gross domestic product, according to government data.
Hotel rates in the Thai capital Bangkok also remain about half those in Singapore and Hong Kong, while the baht’s gain in the past four years has been dwarfed by bigger increases in the value of the Australian and Singapore dollars.
“If you’re going to cut back you’re probably going to cut back on a trip to Singapore or Hong Kong where you’re going to pay $400 a night for a luxury hotel versus $200 a night in Thailand,” said Heinecke, who owns hotels managed by Four Seasons Hotels Inc. and Marriott International Inc. in Thailand as well as his own Anantara-brand resorts.
Minor’s shares surged 93 percent last year, outstripping the SET Index’s 36 percent gain. Of the 24 analysts who cover the stock, 18 have a buy recommendation, three rate it a sell and three recommend holding the shares.
“The tourism sector will remain strong this year,” Jaroonpan Wattanawong, an analyst at Maybank Kim Eng Securities (Thailand) Pcl said by phone. More than 22 million overseas tourists may visit Thailand, while a reduction in personal income taxes will help boost domestic travel, he said.
Jaroonpan has a buy recommendation on Airports of Thailand with a price target of 102 baht, and also favors Asia Aviation Pcl, the parent of Thai AirAsia Co.
Thailand’s existing airports may struggle to accommodate the increased number of tourists, said Sittidath of Krungsri Securities. Minor’s Heinecke said the government’s decision to build an additional terminal in Phuket and move some operations to Don Mueang, Bangkok’s former international airport, will help ease congestion.
“Thailand has generally always been very strong with its infrastructure, whether you’re talking about mass transit or highways or airports,” said Heinecke. “They’ve generally been ahead of the curve, much like China.”
Chinese tour groups added additional charter flights to Thailand as demand for travel to Japan declined because of the territorial dispute between the two countries, said Sisdivachr from the Association of Thai Travel Agents.
The success of “Lost in Thailand,” which is the first Chinese movie to make more than 1 billion yuan ($160 million) in box-office receipts, according to Xinhua, may convince even more Chinese to choose Thailand, Sisdivachr said. The 2011 movie “The Hangover: Part II,” which grossed $581.5 million in worldwide receipts, according to Box Office Mojo, was filmed in locations in Bangkok and Krabi.
“The tourist numbers are continuing to pop,” said Minor’s Heinecke. “We’re seeing it in Phuket, we’re seeing it in Samui, we’re seeing it all over the country.”
With assistance from Anuchit Nguyen in Bangkok. Editors: Tony Jordan and Lars Klemming.
To contact the reporters on this story: Suttinee Yuvejwattana in Bangkok at firstname.lastname@example.org; Supunnabul Suwannakij in Bangkok at email@example.com. To contact the editor responsible for this story: Lars Klemming at firstname.lastname@example.org.