KResearch anticipates that international tourist arrivals will continue to drive Thailand's economy in 2016. Supportive factors that are expected to help boost the number of foreign visitors this year include positive sentiment in both internal and external markets conducive to travel, as well as our government's ongoing marketing activities and strategic plans to make Thailand the "Marina Hub" of ASEAN.
East Asian tourists remain Thailand's major tourism contributor. Chinese arrivals continue to grow, thanks to marketing campaigns rolled out by Chinese tour operators in China and Thailand. Comparing Thailand with Japan—another favored holiday destination for Chinese tourists—Thailand is likely to become their most preferred destination this year since the number of Chinese tourists looks set to double that of last year. Meanwhile, Malaysian holidaymakers, also a major contributor, are expected to grow well. However, Malaysia's economic situation may hinder consumer spending sentiment. On the other hand, tourists from Japan and South Korea should continue to expand.
Additionally, European tourist arrivals are trending upward consistently, so they may reach a positive growth of 3.0 percent this year, rebounding from the 8.7-percent contraction in 2015. Southern European visitors from Spain, Italy and France, as well as those from Germany and the UK, should increase satisfactorily.
Nonetheless, there are risks that may threaten our inbound tourism growth in 2016 and thus could be highly significant to domestic tour operators and related businesses. These risks include our target market economic recoveries, geopolitical issues, terrorism and competition in international markets. Tourism has become an economic activity that the government uses to bolster the overall economy. Countries expected to be affected by these hindering factors may include Russia and those in eastern Europe that may not recover this year. Visitors from the Middle East may have to monitor oil prices that could impact their wealth, as well as domestic and international conflicts.
Given the above factors, KResearch expects that Thailand's international tourist arrivals may grow 5.0-8.0 percent YoY, from the 20.4-percent growth last year, to 31.4-32.3 million visitors in 2016.
KResearch has assessed that the government's policies to attract quality tourists and to generate tourism receipts for local communities will be conducive to increasing Thailand's revenues. In order to motivate quality tourists to visit Thailand, positioning is quite important. Moreover, tourist-directed product standards should be elevated to match the intended target segments' tastes. The government may consider supporting local attractions and operators to generate revenues via One-Tambon-One-Product (OTOP) centers selling quality local-made goods, or offering duty-free, VAT refund pricing on OTOP products purchased at registered vendors, etc.