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THAMMASAT CONSULTING
Tourism authority of Thailand By: Thammasat consulting Chananun - Panthira - Pantharee - Tanwa
THAMMASAT CONSULTING
Agenda
• • • • • • • •
Company Profile Situation Analysis Issue Identification Recommendation Implementation Financial Justification Key Success Factor Conclusions
THAMMASAT CONSULTING
Company Profile
Tourism Authority of Thailand (TAT)
• • •
Establish in 1969 Government Organization Objective: – To Supply Information and Data on Tourist Area to Public – To Promote and Publicize Thai Tourism Industry
•
Since 1982 tourism industry provides highest source of income for Thailand
THAMMASAT CONSULTING
Situation Analysis
External Forces Major World Crisis
•SARS • Bird Flu • Tsunami Great Reduction in Number of Visitors 10.6M 5.5M
THAMMASAT CONSULTING
Intense Regional Competition
Situation Analysis
External Forces Major World Crisis
Intense Regional Competition Aggressive Marketing Campaign - Malaysia: Truly Asia - Uniquely Singapore - Explore China - Hong Kong: Live it, Love it! - Thailand: Happiness on Earth
THAMMASAT CONSULTING
Situation Analysis
Customers Duration of Stay
Zero Dollar Tourists
Wedding and Honey Moon
30% World Growth
MICE
10% World Growth
Purchasing Power
Low Expenditure per Tourist Demand Surpassing Capacity Negative Impact to National Resources
THAMMASAT CONSULTING
Issue Identification Issues
Objectives
Short Term Tsunami Recovery
To Regain the Confidence to Southern Coastal Attraction and Achieve Pre-Tsunami Number of Visitors within 3 years
Medium Term Refine Tourism Product Quality
To create Thailand as a World Class Destination
Increase Tourist Expenditure per Person
To Increase Total International Receipt with the Rate of 120% within 5 years
To Quickly Recover from the Tsunami Crisis and Refine Tourism Product Quality in order to establish Thailand as a World Class Tourist Destination with the Total Tourism Revenue of 1,400 Billions Baht in the next 5 years THAMMASAT CONSULTING
I. Tsunami Recovery Strategy
THAMMASAT CONSULTING
Recommendation
Tsunami Recovery Strategy Internal Development
• Infrastructure 4 Coastal Destinations: Revitalizing -Pha Tong Beach • Accommodation Ruined Sites -Kamala Beach • Tourist Attractions -Phi-Phi Island -Koh Lak • Natural Disaster Warning Safety Enhancement • Tighter Crime Protection
Induce Immediate Government Action Government Tailored IncentivesConcept for Marketing Private Sectors For Each Destination
System
“ The Re-Shine of Andaman Pearl” Promote 4 Major Coastal Destinations as Exotic, Beautiful, and Safer Beaches
Achieve 10.6 M of Visitors to South Coastal Area within 3 years THAMMASAT CONSULTING
II. Tourism Product Quality Enhancement
THAMMASAT CONSULTING
Recommendation
Tourism Product Quality Enhancement Product Aspects
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
Approaches
Promote “Eco-Tourism”
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
Upgrading & Penetrating
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
Increase Police Force and Emergency Centers
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
“I
Farang” Campaign
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
“E-Tourism”
Recommendation
Tourism Product Quality Enhancement Product Aspects Tourist Attractions Condition
Infrastructure
Safety Hospitality
Information
Approaches
BENEFITS
Promote “Eco-Tourism”
Cease Deterioration Rate of National Resources
Upgrading & Penetrating
More Convenient + Better Reached Transportation System
Increase Police Force and Emergency Centers
Reduce Crime Rate and Increase Visitor Confidence
“I
Farang” Campaign
“E-Tourism”
Strengthen the “Core Competency” of Thailand • Ease of Info Access • Tackle the Emerging Group of ETourists
To Create Thailand as a World Class Destination THAMMASAT CONSULTING
III. Target Selection Strategy
THAMMASAT CONSULTING
Recommendation
Target Selection Strategy Target Focus Duration of Stay
Wedding+ Honeymoon
Low Cost Travelers
MICE
Purchasing Power
THAMMASAT CONSULTING
• Long Stay • High Purchase Power • Potential Return For Leisure Visit
Recommendation
Target Selection Strategy Target Focus
• MICE • Wedding and Honeymoon Positioning Thailand: Premium Destination “Perfect Balance between Exotic Place and Modern World”
MICE
Thailand: Business with Pleasure Wedding & Honey Moon
Current Marketing Campaign 2005-2008
Happiness on Earth
The Siam Romance
To Increase Total International Receipt with the Rate of 120% within 5 years
THAMMASAT CONSULTING
Activities 2005
2006
2007
2008
2009
Tsunami Recovery Internal Development “Re-shine of Andaman Pearl” Campaign
Site Restoration Safety System Installation
Refine Product Quality Infrastructure Upgrade Marketing Campaign
PrepareLaunch
Follow Up
Marketing Strategy MICE Thailand – Business with Pleasure Couple Siam Romance THAMMASAT CONSULTING
PrepareLaunch
Follow Up
Quantitative Justification
Foreign Tourists in Millions
2004E
2005F
2006F
2007F
2008F
2009F
11.65
9.90
10.79
11.87
12.82
13.85
16,000,000 14,000,000
Recovery in 3 years
12,000,000
Back to normal rate
10,000,000 8,000,000
Tsunami Impact
6,000,000 4,000,000 2,000,000 0 2004E
2005F
THAMMASAT CONSULTING
2006F
2007F
2008F
2009F
Quantitative Justification
2004E
2005F
2006F
2007F
2008F
2009F
709
632
744
917
1,139
1,476
International Receipt (Billions Bath) 1,600,000 1,400,000
Recovery in 2 years 1,200,000 1,000,000 800,000
Increase in number of Tourist 600,000 400,000
Increase Expenditure
200,000 0 2004E
2005F
THAMMASAT CONSULTING
2006F
2007F
2008F
2009F
Quantitative Justification
Cost Estimation (Expenses to TAT) Marketing Expenses Re-shine of Andaman Campaign
500M / Year
Eco-Tourism Campaign
100M / Year
I Heart Farang Campaign
150M / Year Total Cost is 1,640,000,000 Baht per Year
Happiness on Earth Campaign
800M / Year
Subsidizing Expenses Information system for E-Tourist
90M / Year
Renovation and Standard Improvement Expenses will be financed by Local Government and Private Sectors.
THAMMASAT CONSULTING
Quantitative Justification
Financing Method
• Increase in Government Budget Allocation • from 0.7% to 1.1% of the International Receipt
Estimated Result of the Investment (5 years) Number of Foreign Tourist Expenditure per tourist Total Foreign Currency Income
THAMMASAT CONSULTING
39.58% Increase 75% Increase 133.45% Increase
Key Success Factor
Effective Marketing Strategies
Quality of the Tourist Sites
Corporations Among Sectors
THAMMASAT CONSULTING
Conclusions Issues
Strategies
Tsunami Recovery
Refine Tourism Product Quality
Increase Tourist Expenditure per Person
• Internal Development • Marketing Campaign “ The Re-Shine of Andaman Pearl”
• • • • •
Tourist Attractions Condition Infrastructure Safety Hospitality Information
•Target Selection •MICE •Couple •Positioning “ Thailand as a Perfect Balance between Exotic Place and a Modern World ”
To Quickly Recover from the Tsunami Crisis and Refine Tourism Product Quality in order to establish Thailand as a World Class Tourist Destination with the Total Tourism Revenue of 1,400 Billions Baht in the next 5 years THAMMASAT CONSULTING
THAMMASAT CONSULTING
Back Up Slide Navigator Tsunami • Strategy for tsunami recovery • Government incentive for private sector • Tsunami Early Warning System • The Re-shine of Andaman Pearl Campaign Product Development : Campaign • Eco-tourisms definition • I “Heart” Farang • E-tourism Mice/Couple, Positioning • Happy on Earth Campaign MICE • Happy on Earth Campaign Wedding/Honeymoon • Why MICE and Wedding/Honeymoon? • Perfect Balance Between Exotic Place and Modern world Others • TAT’s long term issue identification? • How to solve uncontrolled tourism development?
THAMMASAT CONSULTING
Financial Navigator • • • • • •
Quantitative Analysis Justification Cost Estimation Justification Total Foreign Customer Estimates Tourist Expenditure per Person Financing Method Tsunami Recovery Quantification
THAMMASAT CONSULTING
Back Up
Strategy for tsunami recovery •
Set up Tourism Restoration Committee – Full authority and resources to restore Andaman Tourism
•
Beach Campaign – Patong Beach: Safe Beach and Recreational Activities – Kamala Beach: Safe Beach and Special Culture Orientation – Phi Phi Island: A paradise island for relaxing, diving and other adventure activities. – Khao Lak: Exclusive Beach Resort for Couples and Families
•
Organizing a number of Mega Tourism Events – Happiness Andaman – Tsunami Memorial Day – Colorful Andaman
THAMMASAT CONSULTING
Back Up
Tsunami Recovery: Government incentive for private sector •
Goal: To encourage investment from private sector
•
Private sector: Hotel, resort, shopping mall
•
Incentive: – – – –
Tax reduction/exemption Subsidization Help finding partners Etc.
THAMMASAT CONSULTING
Back Up
Tsunami Early Warning System •
Warning Towers along Thailand’s Andaman Coast • Location – Andaman Sea — Phang-nga, Phuket, Krabi, Trang, Ranong and Satun.
•
Total of 79 warning tower
Benefits • Reduction in the loss of life and property in coastal communities • Elimination of false alarms which result in high economic costs for unnecessary evacuations • Ensure early detection of tsunamis and to acquire data critical to real-time forecasts. THAMMASAT CONSULTING
Province
Total Warning Tower
Phang-nga
18
Phuket
20
Krabi
11
Ranong
5
Satun
14
Trang
11
Total
79
Back Up
The Re-shine of Andaman Pearl Campaign •
Objective: To promote 4 majors costal destination as exotic, beautiful and safer beaches – In order to gain back customer confidence to the coastal area
•
Beach Campaign – Patong Beach: Safe Beach and Recreational Activities Focus : Modern Beach City Surfing, Sunbathing, Parachuting, Water-Skiing – Kamala Beach: Safe Beach and Special Culture Orientation Focus : Enriching Cultural Beach Site – Phi Phi Island: A paradise island for relaxing, diving and other adventure activities. Focus : Retain its Concept of Paradise Island Diving, Bungy Jumping, etc. – Khao Lak: Exclusive Beach for Couples and Families Focus : Relaxed Beach Resort
•
Mega Tourism Events – Happiness Andaman – Tsunami Memorial Day – Colorful Andaman
THAMMASAT CONSULTING
Communication channel : • Public Relation Set up road show for foreigners to visit Southern part of Thailand •Magazine •Internet Official site of TAT
Back Up
Eco-tourisms definition •
A form of tourism in natural areas that is based on the responsibility towards the ecological system of the area. • Sustainable tourism development with emphasis on community participation, safety of tourists and non-exploitation. How • To promote and continuously educate Eco-tourisms through; various communication channels. (i.e. Internet, on-site, Radio, TV) • Uses celebrity endorsement Target at: • Local • Visitors Benefit • Reduce natural exploitation THAMMASAT CONSULTING
Back Up
I •
Farang Campaign Objective: “To make Thais a good host” – Friendliness – Honesty – Punctuality
•
Create awareness for Thais to be aware of the importance of the tourism sector
•
Message: – Being a good host contribute to the success of Thailand tourism industry – Successful tourism industry contribute to National wealth
•
Result: – Strengthen Thailand’s competitive advantage – welcoming hospitality – Repeat visits
THAMMASAT CONSULTING
Back Up
E-tourism •
What is E-tourism: – Increase accessibility of tourism information via internet – Enable online booking – Offer personalized product and service
•
Rational: In this era, countries are moving toward new digital economy. E-tourism is a new channel that will attract and retain visitors to Thailand E-tourism is critical to cope with changing demand
•
Implementation tactic: – Cooperation with private sectors, i.e. hotels, credit cards, shopping centers – Co-promotion will give mutual benefits to both parties
•
Communication channel: Internet
THAMMASAT CONSULTING
Back Up
Position: Thailand = Perfect Balance Between Exotic Place and Modern World • Rational: – Current marketing strategy is placing too much emphasis on traditional image of Thailand which is not a true picture of the present situation and might create a wrong image – Thailand is becoming a modern society with the more international lifestyle. Our proposed marketing position is aiming to avoid creating wrong expectation which could lead to dissatisfaction. – To support our long term goal of creating Thailand as a multifaceted destination
THAMMASAT CONSULTING
Back Up
Why MICE and Wedding/Honeymoon? •
MICE: – – – – –
•
More resilience than other sectors during economic downturn Heavy spenders Represent large proportion (20%) of the total international tourist High growth segment (10% per year) 40% of visitors return for leisure visit
Wedding/Honeymoon – – – –
Fast growing segment Entail several tourist i.e. family and friends of the couple Long duration of stay High spenders (three times more than they would on the average 5-day holiday) – Suitable with the existing product offering of Thailand
THAMMASAT CONSULTING
Back Up
Happy on Earth Campaign MICE • MICE – Thailand: Business with Pleasure – Product • Facilities: – Increase facilities for business center – New exhibition center – Renovate business center
• Interesting combination packages
– Message: Thailand are now ready to hold international business events. The participants are able to accomplish their business task while enjoying the beautiful sites in Thailand.
– Primary Target: regional customer i.e. Japan, China, India, South Korea (Rational: already have existing manufacturing based in Thailand)
– Communication Channel: brochure, TV commercials, internet, tourism magazines, etc. THAMMASAT CONSULTING
Back Up
Happy on Earth Campaign Wedding/Honeymoon • Wedding/Honeymoon – The Siam Romance – Product Focus: Wedding • Offer wedding service at exotic places • Special wedding package: wedding gown, photographers, various religious conduct, wedding planner, etc. Honeymoon • All-inclusive resorts offer: include airport transfer, room, all meals, facilities, extra activities, etc. • Offer premium service and special honeymoon price package
– Message: Thailand will give the honeymooners the sweetest and unforgettable experience that will remain with the couple forever.
– Target: Globally
– Communication Channel: brochure, TV commercials, internet, tourism magazines, etc.
THAMMASAT CONSULTING
Back Up
How to solve Uncontrolled tourism development? •
Immediate action: Strengthen regulations i.e. enforce strict controls on new infrastructure development • Penalty include fine and imprisonment
•
Second action: Human resources management – Provide training sessions to the key managers about how to implement appropriate development & control measures, and on-site management system – Strengthen the management of these natural tourism resources
•
Third action: Provide Education – To emphasize the importance of healthy development without destroying natural resources – To emphasize on the negative effect of natural resources deterioration
THAMMASAT CONSULTING
Back Up
TAT’s long term issue identification? •
Issue: Product indifferentiation
• •
Currently: Thai tourism based on beach oriented product Goal: Establish Thailand as a multi-faceted tourist destination
•
Theme: “Discover More of Thailand” –
•
To inform tourists about Thailand tourism product variety – in addition to beaches
How? – Increase manmade tourism e.g. entertainment complex, shopping centers, museum, etc. – Hold world event to attract tourists – Promote other natural destinations besides beaches i.e. forests, mountains, etc. – Promote different sports/adventurous activities e.g. rock climbing, skydiving, etc. – Promote both traditional Thai culture and the modern Thai society
THAMMASAT CONSULTING
Back Up Finance Back-Up
Quantitative Analysis Justification • TAT is a government organization, not a business organization. • TAT doesn’t make money by itself, it is GIVEN money by the central government. • It’s main goal is NOT to maximize its profit. It is created in order to support the tourism industry in Thailand • Therefore, It is not practical to use the organization revenues and net income to measure the result of our strategies. • So, we used the incoming tourists and the total foreign currency income to Thailand. • This logic also applied to our return on investment, since the cash inflows into the organization is almost irrelevant to our strategies. So we decided to use the estimated results of the strategies (Total international receipts, tourists expenditures) instead of the conventional financial measurements (NPV, IRR, etc.)
THAMMASAT CONSULTING
Back Up Finance Back-Up
Cost Estimation Justification • TAT is created to promote and publicized Thailand. Most of the work done aside of marketing activities are done indirectly through private sectors and local governments (subsidizing and negotiating). • The renovations and improvement of standard will be done largely through local governments and private sectors, therefore it will not be a cost burden to TAT organization itself. • Since the tourist assets are NOT owned by TAT itself, the improvement and renovations cannot be count as our capital investment. • Through those logics, we have concluded that all the costs regarding to our recommendations are expenses that will appear on the organization’s income statement, and there is no capital expenditure at all.
THAMMASAT CONSULTING
Back Up Finance Back-Up
Total Foreign Customer Estimates Number of Foreign Tourists Estimation 2003
Estimated Number of Foreign tourist Change in Number of Tourist
2008F
2009F
9,957,265 11,650,000 9,902,500 10,793,725 11,873,098 12,822,945
13,848,781
-
2004E
17.00%
2005F
-15.00%
2006F
9.00%
2007F
10.00%
8.00%
• 2005, TAT estimates that the number of foreign tourist will diminished by 15% due to the Tsunami. • However, through our strategies, we’ll be able to recover the previous number within 3 years. • After that, the tourists number should grow normally as forecast by TAT, since our strategies do not emphasized on increasing the number of tourists.
THAMMASAT CONSULTING
8.00%
Back Up Finance Back-Up
Tourist Expenditure per Person Expenditure per Tourist Estimation
2004E 2005F
2006F
2007F
2008F
2009F
Estimated Expenditure per person 60,822 63,864 68,973
77,249
88,837
106,604
5.00% 8.00% 12.00% 15.00%
20.00%
Growth in Tourism expenditure
-
• In 2005, our happiness on earth strategy is just in the initial stage. Also, most of our effort will be on the recovery of Tsunami strategy. • From 2007 onward, the expenditure per person should increase at a rapid rate.
THAMMASAT CONSULTING
Back Up Finance Back-Up
Financing Method • Since we are a government organization, 97% of revenue are from the budget allocation of the central government. • Currently, the allocation rate is 0.7% of the total international receipt from tourism industry. • However, in the year 2005, both the number of tourists and the total international receipt will take a heavy hit from Tsunami. Thus, in 2005, the government budget allocate to us will not be enough to finance our strategy to recover tourism industry. • Therefore, it is absolutely vital for us to negotiate with the central government to increase the allocation % from 0.7% to 1.1% • After 2005, we can decrease the percentage a little year by year due to the increase in total international receipt, and it can be decrease to normal rate of 0.7% in 4 years.
THAMMASAT CONSULTING
Back Up Finance Back-Up
Tsunami Recovery Quantification Tsunami Province Tourism Estimation (Total, both local and foreign) 2004E Number of Tourist
2005F
2006F
2007F
2008F
2009F
10,600,000 5,548,040 6,657,648 8,255,484 10,732,129
14,488,374
130,600
71,774
93,019
129,185
193,131
312,872
Estimate Expenditure per Person
12,321
12,937
13,972
15,648
17,996
21,595
Growth in Number of Tourist
-
-47.66%
20.00%
24.00%
30%
35%
Growth in Expenditure per Person
-
5.00%
8.00%
12.00%
15.00%
20.00%
Total Expenditure (Millions B)
• TAT has estimated that the tsunami will cause a 47.66% decline in number of tourism to the southern provinces in 2005. • Through our Reshine of Andaman Campaign, we would be able to recover the number of tourist by 2008 • The total expenditure will recover 1 year sooner due to the increase in expenditure per tourist resulting from our strategy.
THAMMASAT CONSULTING
Tourism authority of Thailand By: Thammasat consulting Chananun - Panthira - Pantharee - Tanwa
THAMMASAT CONSULTING
Agenda
• • • • • • • •
Company Profile Situation Analysis Issue Identification Recommendation Implementation Financial Justification Key Success Factor Conclusions
THAMMASAT CONSULTING
Company Profile
Tourism Authority of Thailand (TAT)
• • •
Establish in 1969 Government Organization Objective: – To Supply Information and Data on Tourist Area to Public – To Promote and Publicize Thai Tourism Industry
•
Since 1982 tourism industry provides highest source of income for Thailand
THAMMASAT CONSULTING
Situation Analysis
External Forces Major World Crisis
•SARS • Bird Flu • Tsunami Great Reduction in Number of Visitors 10.6M 5.5M
THAMMASAT CONSULTING
Intense Regional Competition
Situation Analysis
External Forces Major World Crisis
Intense Regional Competition Aggressive Marketing Campaign - Malaysia: Truly Asia - Uniquely Singapore - Explore China - Hong Kong: Live it, Love it! - Thailand: Happiness on Earth
THAMMASAT CONSULTING
Situation Analysis
Customers Duration of Stay
Zero Dollar Tourists
Wedding and Honey Moon
30% World Growth
MICE
10% World Growth
Purchasing Power
Low Expenditure per Tourist Demand Surpassing Capacity Negative Impact to National Resources
THAMMASAT CONSULTING
Issue Identification Issues
Objectives
Short Term Tsunami Recovery
To Regain the Confidence to Southern Coastal Attraction and Achieve Pre-Tsunami Number of Visitors within 3 years
Medium Term Refine Tourism Product Quality
To create Thailand as a World Class Destination
Increase Tourist Expenditure per Person
To Increase Total International Receipt with the Rate of 120% within 5 years
To Quickly Recover from the Tsunami Crisis and Refine Tourism Product Quality in order to establish Thailand as a World Class Tourist Destination with the Total Tourism Revenue of 1,400 Billions Baht in the next 5 years THAMMASAT CONSULTING
I. Tsunami Recovery Strategy
THAMMASAT CONSULTING
Recommendation
Tsunami Recovery Strategy Internal Development
• Infrastructure 4 Coastal Destinations: Revitalizing -Pha Tong Beach • Accommodation Ruined Sites -Kamala Beach • Tourist Attractions -Phi-Phi Island -Koh Lak • Natural Disaster Warning Safety Enhancement • Tighter Crime Protection
Induce Immediate Government Action Government Tailored IncentivesConcept for Marketing Private Sectors For Each Destination
System
“ The Re-Shine of Andaman Pearl” Promote 4 Major Coastal Destinations as Exotic, Beautiful, and Safer Beaches
Achieve 10.6 M of Visitors to South Coastal Area within 3 years THAMMASAT CONSULTING
II. Tourism Product Quality Enhancement
THAMMASAT CONSULTING
Recommendation
Tourism Product Quality Enhancement Product Aspects
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
Approaches
Promote “Eco-Tourism”
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
Upgrading & Penetrating
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
Increase Police Force and Emergency Centers
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
“I
Farang” Campaign
Recommendation
Tourism Product Quality Enhancement Product Aspects
Approaches
Tourist Attractions Condition Infrastructure
Safety Hospitality
Information
THAMMASAT CONSULTING
“E-Tourism”
Recommendation
Tourism Product Quality Enhancement Product Aspects Tourist Attractions Condition
Infrastructure
Safety Hospitality
Information
Approaches
BENEFITS
Promote “Eco-Tourism”
Cease Deterioration Rate of National Resources
Upgrading & Penetrating
More Convenient + Better Reached Transportation System
Increase Police Force and Emergency Centers
Reduce Crime Rate and Increase Visitor Confidence
“I
Farang” Campaign
“E-Tourism”
Strengthen the “Core Competency” of Thailand • Ease of Info Access • Tackle the Emerging Group of ETourists
To Create Thailand as a World Class Destination THAMMASAT CONSULTING
III. Target Selection Strategy
THAMMASAT CONSULTING
Recommendation
Target Selection Strategy Target Focus Duration of Stay
Wedding+ Honeymoon
Low Cost Travelers
MICE
Purchasing Power
THAMMASAT CONSULTING
• Long Stay • High Purchase Power • Potential Return For Leisure Visit
Recommendation
Target Selection Strategy Target Focus
• MICE • Wedding and Honeymoon Positioning Thailand: Premium Destination “Perfect Balance between Exotic Place and Modern World”
MICE
Thailand: Business with Pleasure Wedding & Honey Moon
Current Marketing Campaign 2005-2008
Happiness on Earth
The Siam Romance
To Increase Total International Receipt with the Rate of 120% within 5 years
THAMMASAT CONSULTING
Activities 2005
2006
2007
2008
2009
Tsunami Recovery Internal Development “Re-shine of Andaman Pearl” Campaign
Site Restoration Safety System Installation
Refine Product Quality Infrastructure Upgrade Marketing Campaign
PrepareLaunch
Follow Up
Marketing Strategy MICE Thailand – Business with Pleasure Couple Siam Romance THAMMASAT CONSULTING
PrepareLaunch
Follow Up
Quantitative Justification
Foreign Tourists in Millions
2004E
2005F
2006F
2007F
2008F
2009F
11.65
9.90
10.79
11.87
12.82
13.85
16,000,000 14,000,000
Recovery in 3 years
12,000,000
Back to normal rate
10,000,000 8,000,000
Tsunami Impact
6,000,000 4,000,000 2,000,000 0 2004E
2005F
THAMMASAT CONSULTING
2006F
2007F
2008F
2009F
Quantitative Justification
2004E
2005F
2006F
2007F
2008F
2009F
709
632
744
917
1,139
1,476
International Receipt (Billions Bath) 1,600,000 1,400,000
Recovery in 2 years 1,200,000 1,000,000 800,000
Increase in number of Tourist 600,000 400,000
Increase Expenditure
200,000 0 2004E
2005F
THAMMASAT CONSULTING
2006F
2007F
2008F
2009F
Quantitative Justification
Cost Estimation (Expenses to TAT) Marketing Expenses Re-shine of Andaman Campaign
500M / Year
Eco-Tourism Campaign
100M / Year
I Heart Farang Campaign
150M / Year Total Cost is 1,640,000,000 Baht per Year
Happiness on Earth Campaign
800M / Year
Subsidizing Expenses Information system for E-Tourist
90M / Year
Renovation and Standard Improvement Expenses will be financed by Local Government and Private Sectors.
THAMMASAT CONSULTING
Quantitative Justification
Financing Method
• Increase in Government Budget Allocation • from 0.7% to 1.1% of the International Receipt
Estimated Result of the Investment (5 years) Number of Foreign Tourist Expenditure per tourist Total Foreign Currency Income
THAMMASAT CONSULTING
39.58% Increase 75% Increase 133.45% Increase
Key Success Factor
Effective Marketing Strategies
Quality of the Tourist Sites
Corporations Among Sectors
THAMMASAT CONSULTING
Conclusions Issues
Strategies
Tsunami Recovery
Refine Tourism Product Quality
Increase Tourist Expenditure per Person
• Internal Development • Marketing Campaign “ The Re-Shine of Andaman Pearl”
• • • • •
Tourist Attractions Condition Infrastructure Safety Hospitality Information
•Target Selection •MICE •Couple •Positioning “ Thailand as a Perfect Balance between Exotic Place and a Modern World ”
To Quickly Recover from the Tsunami Crisis and Refine Tourism Product Quality in order to establish Thailand as a World Class Tourist Destination with the Total Tourism Revenue of 1,400 Billions Baht in the next 5 years THAMMASAT CONSULTING
THAMMASAT CONSULTING
Back Up Slide Navigator Tsunami • Strategy for tsunami recovery • Government incentive for private sector • Tsunami Early Warning System • The Re-shine of Andaman Pearl Campaign Product Development : Campaign • Eco-tourisms definition • I “Heart” Farang • E-tourism Mice/Couple, Positioning • Happy on Earth Campaign MICE • Happy on Earth Campaign Wedding/Honeymoon • Why MICE and Wedding/Honeymoon? • Perfect Balance Between Exotic Place and Modern world Others • TAT’s long term issue identification? • How to solve uncontrolled tourism development?
THAMMASAT CONSULTING
Financial Navigator • • • • • •
Quantitative Analysis Justification Cost Estimation Justification Total Foreign Customer Estimates Tourist Expenditure per Person Financing Method Tsunami Recovery Quantification
THAMMASAT CONSULTING
Back Up
Strategy for tsunami recovery •
Set up Tourism Restoration Committee – Full authority and resources to restore Andaman Tourism
•
Beach Campaign – Patong Beach: Safe Beach and Recreational Activities – Kamala Beach: Safe Beach and Special Culture Orientation – Phi Phi Island: A paradise island for relaxing, diving and other adventure activities. – Khao Lak: Exclusive Beach Resort for Couples and Families
•
Organizing a number of Mega Tourism Events – Happiness Andaman – Tsunami Memorial Day – Colorful Andaman
THAMMASAT CONSULTING
Back Up
Tsunami Recovery: Government incentive for private sector •
Goal: To encourage investment from private sector
•
Private sector: Hotel, resort, shopping mall
•
Incentive: – – – –
Tax reduction/exemption Subsidization Help finding partners Etc.
THAMMASAT CONSULTING
Back Up
Tsunami Early Warning System •
Warning Towers along Thailand’s Andaman Coast • Location – Andaman Sea — Phang-nga, Phuket, Krabi, Trang, Ranong and Satun.
•
Total of 79 warning tower
Benefits • Reduction in the loss of life and property in coastal communities • Elimination of false alarms which result in high economic costs for unnecessary evacuations • Ensure early detection of tsunamis and to acquire data critical to real-time forecasts. THAMMASAT CONSULTING
Province
Total Warning Tower
Phang-nga
18
Phuket
20
Krabi
11
Ranong
5
Satun
14
Trang
11
Total
79
Back Up
The Re-shine of Andaman Pearl Campaign •
Objective: To promote 4 majors costal destination as exotic, beautiful and safer beaches – In order to gain back customer confidence to the coastal area
•
Beach Campaign – Patong Beach: Safe Beach and Recreational Activities Focus : Modern Beach City Surfing, Sunbathing, Parachuting, Water-Skiing – Kamala Beach: Safe Beach and Special Culture Orientation Focus : Enriching Cultural Beach Site – Phi Phi Island: A paradise island for relaxing, diving and other adventure activities. Focus : Retain its Concept of Paradise Island Diving, Bungy Jumping, etc. – Khao Lak: Exclusive Beach for Couples and Families Focus : Relaxed Beach Resort
•
Mega Tourism Events – Happiness Andaman – Tsunami Memorial Day – Colorful Andaman
THAMMASAT CONSULTING
Communication channel : • Public Relation Set up road show for foreigners to visit Southern part of Thailand •Magazine •Internet Official site of TAT
Back Up
Eco-tourisms definition •
A form of tourism in natural areas that is based on the responsibility towards the ecological system of the area. • Sustainable tourism development with emphasis on community participation, safety of tourists and non-exploitation. How • To promote and continuously educate Eco-tourisms through; various communication channels. (i.e. Internet, on-site, Radio, TV) • Uses celebrity endorsement Target at: • Local • Visitors Benefit • Reduce natural exploitation THAMMASAT CONSULTING
Back Up
I •
Farang Campaign Objective: “To make Thais a good host” – Friendliness – Honesty – Punctuality
•
Create awareness for Thais to be aware of the importance of the tourism sector
•
Message: – Being a good host contribute to the success of Thailand tourism industry – Successful tourism industry contribute to National wealth
•
Result: – Strengthen Thailand’s competitive advantage – welcoming hospitality – Repeat visits
THAMMASAT CONSULTING
Back Up
E-tourism •
What is E-tourism: – Increase accessibility of tourism information via internet – Enable online booking – Offer personalized product and service
•
Rational: In this era, countries are moving toward new digital economy. E-tourism is a new channel that will attract and retain visitors to Thailand E-tourism is critical to cope with changing demand
•
Implementation tactic: – Cooperation with private sectors, i.e. hotels, credit cards, shopping centers – Co-promotion will give mutual benefits to both parties
•
Communication channel: Internet
THAMMASAT CONSULTING
Back Up
Position: Thailand = Perfect Balance Between Exotic Place and Modern World • Rational: – Current marketing strategy is placing too much emphasis on traditional image of Thailand which is not a true picture of the present situation and might create a wrong image – Thailand is becoming a modern society with the more international lifestyle. Our proposed marketing position is aiming to avoid creating wrong expectation which could lead to dissatisfaction. – To support our long term goal of creating Thailand as a multifaceted destination
THAMMASAT CONSULTING
Back Up
Why MICE and Wedding/Honeymoon? •
MICE: – – – – –
•
More resilience than other sectors during economic downturn Heavy spenders Represent large proportion (20%) of the total international tourist High growth segment (10% per year) 40% of visitors return for leisure visit
Wedding/Honeymoon – – – –
Fast growing segment Entail several tourist i.e. family and friends of the couple Long duration of stay High spenders (three times more than they would on the average 5-day holiday) – Suitable with the existing product offering of Thailand
THAMMASAT CONSULTING
Back Up
Happy on Earth Campaign MICE • MICE – Thailand: Business with Pleasure – Product • Facilities: – Increase facilities for business center – New exhibition center – Renovate business center
• Interesting combination packages
– Message: Thailand are now ready to hold international business events. The participants are able to accomplish their business task while enjoying the beautiful sites in Thailand.
– Primary Target: regional customer i.e. Japan, China, India, South Korea (Rational: already have existing manufacturing based in Thailand)
– Communication Channel: brochure, TV commercials, internet, tourism magazines, etc. THAMMASAT CONSULTING
Back Up
Happy on Earth Campaign Wedding/Honeymoon • Wedding/Honeymoon – The Siam Romance – Product Focus: Wedding • Offer wedding service at exotic places • Special wedding package: wedding gown, photographers, various religious conduct, wedding planner, etc. Honeymoon • All-inclusive resorts offer: include airport transfer, room, all meals, facilities, extra activities, etc. • Offer premium service and special honeymoon price package
– Message: Thailand will give the honeymooners the sweetest and unforgettable experience that will remain with the couple forever.
– Target: Globally
– Communication Channel: brochure, TV commercials, internet, tourism magazines, etc.
THAMMASAT CONSULTING
Back Up
How to solve Uncontrolled tourism development? •
Immediate action: Strengthen regulations i.e. enforce strict controls on new infrastructure development • Penalty include fine and imprisonment
•
Second action: Human resources management – Provide training sessions to the key managers about how to implement appropriate development & control measures, and on-site management system – Strengthen the management of these natural tourism resources
•
Third action: Provide Education – To emphasize the importance of healthy development without destroying natural resources – To emphasize on the negative effect of natural resources deterioration
THAMMASAT CONSULTING
Back Up
TAT’s long term issue identification? •
Issue: Product indifferentiation
• •
Currently: Thai tourism based on beach oriented product Goal: Establish Thailand as a multi-faceted tourist destination
•
Theme: “Discover More of Thailand” –
•
To inform tourists about Thailand tourism product variety – in addition to beaches
How? – Increase manmade tourism e.g. entertainment complex, shopping centers, museum, etc. – Hold world event to attract tourists – Promote other natural destinations besides beaches i.e. forests, mountains, etc. – Promote different sports/adventurous activities e.g. rock climbing, skydiving, etc. – Promote both traditional Thai culture and the modern Thai society
THAMMASAT CONSULTING
Back Up Finance Back-Up
Quantitative Analysis Justification • TAT is a government organization, not a business organization. • TAT doesn’t make money by itself, it is GIVEN money by the central government. • It’s main goal is NOT to maximize its profit. It is created in order to support the tourism industry in Thailand • Therefore, It is not practical to use the organization revenues and net income to measure the result of our strategies. • So, we used the incoming tourists and the total foreign currency income to Thailand. • This logic also applied to our return on investment, since the cash inflows into the organization is almost irrelevant to our strategies. So we decided to use the estimated results of the strategies (Total international receipts, tourists expenditures) instead of the conventional financial measurements (NPV, IRR, etc.)
THAMMASAT CONSULTING
Back Up Finance Back-Up
Cost Estimation Justification • TAT is created to promote and publicized Thailand. Most of the work done aside of marketing activities are done indirectly through private sectors and local governments (subsidizing and negotiating). • The renovations and improvement of standard will be done largely through local governments and private sectors, therefore it will not be a cost burden to TAT organization itself. • Since the tourist assets are NOT owned by TAT itself, the improvement and renovations cannot be count as our capital investment. • Through those logics, we have concluded that all the costs regarding to our recommendations are expenses that will appear on the organization’s income statement, and there is no capital expenditure at all.
THAMMASAT CONSULTING
Back Up Finance Back-Up
Total Foreign Customer Estimates Number of Foreign Tourists Estimation 2003
Estimated Number of Foreign tourist Change in Number of Tourist
2008F
2009F
9,957,265 11,650,000 9,902,500 10,793,725 11,873,098 12,822,945
13,848,781
-
2004E
17.00%
2005F
-15.00%
2006F
9.00%
2007F
10.00%
8.00%
• 2005, TAT estimates that the number of foreign tourist will diminished by 15% due to the Tsunami. • However, through our strategies, we’ll be able to recover the previous number within 3 years. • After that, the tourists number should grow normally as forecast by TAT, since our strategies do not emphasized on increasing the number of tourists.
THAMMASAT CONSULTING
8.00%
Back Up Finance Back-Up
Tourist Expenditure per Person Expenditure per Tourist Estimation
2004E 2005F
2006F
2007F
2008F
2009F
Estimated Expenditure per person 60,822 63,864 68,973
77,249
88,837
106,604
5.00% 8.00% 12.00% 15.00%
20.00%
Growth in Tourism expenditure
-
• In 2005, our happiness on earth strategy is just in the initial stage. Also, most of our effort will be on the recovery of Tsunami strategy. • From 2007 onward, the expenditure per person should increase at a rapid rate.
THAMMASAT CONSULTING
Back Up Finance Back-Up
Financing Method • Since we are a government organization, 97% of revenue are from the budget allocation of the central government. • Currently, the allocation rate is 0.7% of the total international receipt from tourism industry. • However, in the year 2005, both the number of tourists and the total international receipt will take a heavy hit from Tsunami. Thus, in 2005, the government budget allocate to us will not be enough to finance our strategy to recover tourism industry. • Therefore, it is absolutely vital for us to negotiate with the central government to increase the allocation % from 0.7% to 1.1% • After 2005, we can decrease the percentage a little year by year due to the increase in total international receipt, and it can be decrease to normal rate of 0.7% in 4 years.
THAMMASAT CONSULTING
Back Up Finance Back-Up
Tsunami Recovery Quantification Tsunami Province Tourism Estimation (Total, both local and foreign) 2004E Number of Tourist
2005F
2006F
2007F
2008F
2009F
10,600,000 5,548,040 6,657,648 8,255,484 10,732,129
14,488,374
130,600
71,774
93,019
129,185
193,131
312,872
Estimate Expenditure per Person
12,321
12,937
13,972
15,648
17,996
21,595
Growth in Number of Tourist
-
-47.66%
20.00%
24.00%
30%
35%
Growth in Expenditure per Person
-
5.00%
8.00%
12.00%
15.00%
20.00%
Total Expenditure (Millions B)
• TAT has estimated that the tsunami will cause a 47.66% decline in number of tourism to the southern provinces in 2005. • Through our Reshine of Andaman Campaign, we would be able to recover the number of tourist by 2008 • The total expenditure will recover 1 year sooner due to the increase in expenditure per tourist resulting from our strategy.
THAMMASAT CONSULTING
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