The Competitive Advantage in Tourism of ASEAN Countries in Chinese Tourists Market

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1 The Competitive Advantage in Tourism of ASEAN Countries in Chinese Tourists Market Akarapong Untong and Mingsarn Kaosa-ard Public Policy Studies Institute Chiang Mai University 3 rd Thai-Chinese Strategic Research Seminar August 7-9, 2014, Bangkok, Thailand

2 Contents The significance of the Chinese tourists market? Chinese tourists market in ASEAN. Main objectives. Methodology. Results & Findings. Conclusion & Recommendation. 2

3 Significance of the Chinese tourists market? Past decade ( ): - Chinese outbound tourists increased 14.6% per year. - Chinese tourist s expenditure increased 23.6% per year. - China has become the world s largest tourism exporting country. Next decade, China will remain the largest tourism market in the world, and will be a factor driving the growth of world s tourism, follow by India and Russia. UNWTO (2014) predicted that in 2030, China will export about 200 million tourists. 3

4 China Outbound Tourism Millions persons US$ Billion Chinese outbound travelers (million) CAGR = 31.0% Expenditure (US$ billion) CAGR = 19.8% CAGR = 12.3% CAGR = 17.3% Source: CNTA (2009) และ UNWTO (2014) 4

5 Significance of the Chinese tourists market? In 2013, Chinese tourists market is the world s largest. China outbound tourism expenditure is number one in the world with US$ Billion. China is the largest outbound market in the world with million travelers. In 2015, outbound travel from China 100 millions (in millions), the high growth is being driven by the second-tier & third-tier tourist-generation regions. Source: UNWTO (2014). 5

6 Top 10 Chinese Outbound Destinations Rank Destination Millions Destination Millions 1 Hong Kong Hong Kong Macau 7.96 Macau South Korea 3.38 Thailand Thailand 2.82 South Korea Taiwan 2.59 Taiwan Singapore 2.05 Singapore USA 1.59 USA Japan 1.51 Malaysia Vietnam 1.42 Switzerland Malaysia 1.37 Vietnam 2.15 Source: Euromonitor (2013). 6

7 Chinese tourists market in the near future Chinese tourists market has grown in all segments. Free individual tourism (FIT) expands more. In 2017, ASEAN will be among the main destination for the Chinese tourists, next to Hong Kong. Thailand will be one of the top two destinations for the Chinese tourists, as a result of T-Pop fever. ท มา: Euromonitor (2013) และ UNWTO (2014) 7

8 Number of Chinese tourist arrivals to ASEAN persons 10,000,000 9,000, M. (10.48%) 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000, M. (5.86%) SARS Tsunami Influenza & Violence in BKK 2,000,000 1,000,000 CAGR=9.04; CV=24.03 CARG=31.10;CV= Source: Thailand Authority of Thailand and Ministry of Tourism and Sports 8

9 Market share of Chinese tourists in ASEAN Myanmar 0.7% Thailand 25.7% Singapore 24.0% Laos 0.9% 2.36 M. (6.37%) 2003 Philippines 1.4% Cambodia 1.5% Indonesia 1.7% Malaysia 14.8% Vietnam 29.3% Myanmar 0.8% Thailand 30.1% Singapore 22.0% 2012 Laos 2.2% 9.25 M. (10.48%) Philippines 2.7% Cambodia 3.6% Malaysia 16.9% Vietnam 15.1% Indonesia 6.7% 9

10 China s market trends in major ASEAN countries Thailand Singapore Malaysia Vietnam 10

11 China s market trends in major ASEAN countries Chinese tourists have changed Thailand Singapore the structure of visitors in ASEAN. Malaysia Vietnam 11

12 Main Objectives Assess the competitive advantage in tourism of ASEAN countries in Chinese tourists market (except Brunei). Analyze the growth of Chinese tourists arrivals in each ASEAN countries. 12

13 Contribution of Study The competitive position of ASEAN countries in Chinese tourists market. Change in Competitiveness. Information to improving the marketing strategy for Chinese tourists in the future. 13

14 Methodology Assess the ability of attracts Chinese tourists: - Nominal Competitive Advantage Ratio (NCAR) - Dynamic Competitive Advantage Ratio (DCAR) Analyze the growth of Chinese tourists market: - Shift-Share Analysis (SSA) Data Chinese arrival during from Pacific Asia Travel Association (PATA) 14

15 Competitive advantage in Chinese tourist market Destination CAR Market Situation NCAR Rank NCAR Rank Vietnam Lost opportunity Lagging opportunity Singapore Rising Star Lagging opportunity Thailand Lost opportunity Rising Star Myanmar Rising Star Lost opportunity Cambodia Rising Star Lagging opportunity Lao PDR Rising Star Lost opportunity Philippine Rising Star Lagging opportunity Indonesia Rising Star Lagging opportunity Malaysia Rising Star Lagging opportunity Note: The NCAR multiplied by 100 for convenience into consideration. Source: Author s calculation. 15

16 Growth of Chinese tourist arrivals to ASEAN Destination [Area-wide effect = 73.20; Country-mix effect = 7.26] Competitive Growth Rate effect Market strategy [Area-wide effect = 36.26; Country-mix effect = 89.28] Competitive Growth Rate effect Market strategy Vietnam Repositioning Do not thing Thailand Re-planning Specific attention Cambodia Specific attention Specific attention Singapore Do not thing Repositioning Myanmar Do not thing Repositioning Lao PDR Specific attention Repositioning Philippine , Specific attention Re-planning Indonesia , Specific attention Re-planning Malaysia Specific attention Re-planning Source: Author's calculation. 16

Chinese market position of ASEAN (2009-2012) Lower growth than the region. Higher growth than the region. Higher market share than the region. - Singapore - Myanmar - Lao PDR.

17 Chinese market position of ASEAN ( ) Lower growth than the region. Higher growth than the region. Higher market share than the region. - Singapore - Myanmar - Lao PDR. Repositioning - Vietnam Do not thing Lower market share than the region. - Philippine - Indonesia - Malaysia Re-planning - Thailand - Cambodia Specific attention Note: the analysis of the data during Source: Author s calculation. 17

18 Conclusion Thailand has become the Rising star. It has an increase in competitive advantage and can attract Chinese tourist more than ASEAN. Vietnam and Singapore ranked to competitive advantage but their change market grew more slowly than ASEAN, hence those countries were under Lagging opportunity. 18

19 Conclusion As for future strategies: Thailand should give more specific attention to Chinese tourists market. While Singapore should reposition Chinese tourists market to enhance their competitive advantage. Vietnam needs not to do more marketing activities in Chinese tourists market. 19

20 Recommendation Thailand should use its advantage as the leader in Chinese tourists market to build alliance and foster intra-regional collaboration in tourism. Moreover, Thailand should use the opportunity as a member of ASEAN Economic Community (AEC) to develop a transportation route within the region and to design an alliance policy for promoting Chinese tourists market in the ASEAN. 20

21 Thank You

Key Findings (preliminary): Asia Pacific Visitor Forecasts 2014-2018 Report

Key Findings (preliminary): Asia Pacific Visitor Forecasts 2014-2018 Report Please Note The findings presented here are preliminary and as delivered at the ASEAN Tourism Forum, January 2014. Final checks