Crisis in Thailand must especially serve tourism growth In Malaysia and also Indonesia according to Credit Suisse Securities research. Malaysia tourism looks most promising this year as it will be stimulated by Visit Malaysia Year 2014.
KUALA LUMPUR- Credit Suisse might generate frowns among players of the tourism industry. The famous Swiss financial institution estimates in its latest research that the Thai tourism sector is due to lose out to its neighbours. Thailand is more exposed to mainland Chinese and Hong Kong tourists than before. These tourists appear to be more sensitive than others to political turmoil and now account for around 20% of total visitor arrivals in the country, compared to 8-9% just a few years ago. Credit Suisse already has seen a notable drop in arrivals from China even before the political situation worsened in the early part of this year.
Thai political turbulence is a bane to Thai and Singapore tourism, but potentially a boost to Malaysian and Indonesian tourist arrivals. According to CS, visitor arrivals in Malaysia and, to a lesser extent, Indonesia enjoyed a statistically significant lift during political unrest in Thailand. On the contrary, Singapore’s tourist arrival growth tends to suffer during these episodes. Singapore and Thailand are most likely to suffer from the competition of “Visit Malaysia Year (VMY) 2014”. Previous studies found that VMYs in the past provided a major lift to Malaysian tourist arrivals, while sapping volume growth to Singapore and especially Thailand, other factors being equal.
Malaysia tourism looks most promising in 2014 among key ASEAN destinations, followed by Indonesia, Singapore and Thailand. Our statistical models suggest Malaysia’s tourist arrivals will gain strongly in 2014 due to: 1) VMY, 2) depreciation of the ringgit, and 3) political turmoil in Thailand. In contrast, we did not find the exchange rate to be a statistically important driver of Thai tourist arrivals, while it will be negatively affected by the two other factors.
Credit Suisse predicts that the rise in tourism related revenues will help Malaysia achieve stronger GDP growth in 2014 at 5.3 per cent from 5.0 per cent in the previous year. By contrary, Credit Suisse tourism experts estimate, if political instability lasts for most of this year, the volume of visitors may stay roughly flat in 2014 versus a projection of 7.5% growth on a year to year basis.
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
