Abstract
In today's context of an increasingly globalized world, and the nature of the travel and leisure industry, it is beneficial to note if Porter's Diamond framework still provides answers to the changing competitiveness of Thailand's travel and leisure and identifies success factors and factors detrimental to its competitiveness. A modified version of the Gem platform has been proposed for the given context of tourism industry and Thailand status. This paper tries to analyze Thailand's Travel and leisure industry employing this modified form of Porter's Gemstone Framework, identifying the many sources of competitiveness or having less it thereof. It endeavors to identify key areas for improvement based on the above evaluation and suggests solutions for the same.
Keywords: Competitiveness, Thailand, Tourism, Diamond Model, Modified framework
Introduction
For any country tourism impacts not only earnings but work and economical development as well. For Thailand, this is even more so. Hence, it is important for Thailand's travel and leisure industry to compete not just in ASEAN region but globally. After the success of Visit Thailand Year in 1987, Thailand, a little country in the Asia Pacific region became the biggest growth story in the region with a growth rate of 7 %. Subsequently its overall economy (GDP) grew at an astounding 10. 9 %, 13. 2 % and ten percent10 % respectively in the next 3 years - i. e. typically 11. 7 % from 1998 - 1990, about the best in the globe. However, it did not maintain that development subsequently, and its own tourism industry confronted many adversities. This paper will assess the recent innovations in the travel and leisure industry to help understand the reasons for the same in today's context.
Today you should definitely only individuals, products, companies compete against each other but business and nations themselves make an effort to outdo your competition, it becomes vital to understand what it takes to beat the conclusion and stay competitive i. e. to acquires a good understanding of the deciding factors of competitive growth. This paper proposes to do this evaluation for the travel and leisure industry of Thailand.
It also, argues an instance for revising the Porter's Stone Model framework for the given context.
Porter's Gem Model Framework
Besides traditional learning resource advantages like land, location, labour, natural resources and size of inhabitants Porter (1990) argued that grouping or 'clusters' of interconnected companies and stakeholders like corporations, suppliers and related establishments provide 'competitive benefits' which are not inherited and which is often received. To get a better understanding of the determinants for such attainment of competitive advantages, Porter (1990, 1998) provided the famous diamonds platform (Fig. 1). This framework helped in the evaluation of not only business but also nations.
The four vertices of the gemstone indicated four groups of determinants. These were: factor conditions (also called 'suggestions' conditions), demand conditions, related and supporting industries; and firm strategy, composition and rivalry. They were the essential determinants.
There were however two exterior or additional factors - chance; and government.
All these factors weren't isolated but interconnected. Thus, demand and factors conditions were linked. So were the factors: related and supporting industries; and company strategy, composition and rivalry.
The nationwide factors of creation like natural resources, infrastructure and skilled labour are the key factor conditions. The type of domestic demand for product and services chiefly identify the demand conditions. The presence (or absence) of suppliers, related companies that are themselves competitive (internationally) form the related and helping establishments vertex. The domestic rivalry between the firms and the conditions that govern their creation, group and management form the last vertex of the precious stone in the framework.
The framework pays to in identifying not only the resources of competitive benefit but also recognizes key trouble spots to be tackled. Oz (2006) illustrated this when determining the resources of competitive advantage of Turkish engineering companies in international markets. The success factors like active local market, variables favourable to entrepreneurship, and intense domestic rivalry stresses effects were brought to fore along with the trouble creating areas like federal government induced hindrances, troubles in financing and weak consulting and design executive capabilities placement of Turkey in the international arena. However, there are limitations to this construction and many experts have combined this with other form of research like Rugman and Verbeke (1993) used SWOT for contrast, citing flaws like difficulty in so that it is functional i. e. of adding it in practice. It is noteworthy that this framework is been appropriate to services as given by Lee and Spisto (2007).
The case for the Endogenous Role of Administration and Chance
Apart from the restriction attributed to the diamond framework above, another flaw in it is the fact that it does not include government among the basic factors but only considers it as an exterior factor despite the fact that it greatly affects the rest of the basic factors. To compensate because of this Wickham (2005) re-conceptualized the platform for the Australian context. It had federal government as an intrinsic basic factor at the centre of the platform, depicted as federal government surrounded by all the other factors as vertices of the hexagon with the chance factor in imperfect (dotted) lines giving it another id as an exterior factor alone.
He also recommended that the role of chance be looked at along with new attention when applied to a regional monetary model like that of the Porter's Stone.
Fig. 1: Determinants of Competitive Benefits: Porter's Stone Model Framework
Chance
Firm Strategy, Framework & Rivalry
Related & Supporting Industries
Government
The need for government insurance policy initiatives to promote and develop the industry is seen for the travel and leisure context in Prideaux (1996), who on evaluating growth trends of Taiwanese inbound tourism to Australia, examined the factors responsible for this and posted them as better air connectivity, promotions and organization of Taiwan's travel industry. Suggestion was also made that repeat visitations would be greatly beneficial and achieve better travel and leisure potential clients with Taiwan steps like forging links with providers in Taiwan, increasing regularity and connection of airlines, ethnical education including vocabulary training, and customization of products to match Taiwanese tastes should be undertaken. The importance of the study is based on the fact that it provides a model for Thailand to replicate with neighbouring ASEAN countries. It provides inputs in regards to what it will do to target a lucrative, individual country like China. Clearly government insurance policies and trade contracts with regional nations play a great role in determining the relative competitiveness of Thailand as a visitor destination.
The role of authorities and chance here, for the Thailand tourism industry plays a crucial role given the recent background of Thailand - it was the epicenter of the Asian financial meltdown of 1997; it encountered the Indian Sea earthquake accompanied by Tsunami on 26th December 2004; it handled global downturn post September 11, 2001 problems, the financial downturn of 2008, SARS (and H1N1 Flu phenomena) and more recently domestic political chaos. These seem to be to have impacted tourism greatly. This builds the situation of chance being a critical determinant in the diamond model - resulting in the assumption that it will definitely be regarded as an endogenous factor and not merely one having an exogenous role in the whole framework.
Pine, Chan and Leung (1996) have discussed the impact of the Asian economic downturn and mentioned that the monetary downturn which influenced adversely the travel and leisure industry has resulted in slowing or halting of many jobs in the hospitality world. It noted that intra-regional tourism had grown due to the region's strong monetary development. They further expect the tourism to be adversely affected (based on limited data); intra-regional tourism was expected to decrease but increase from Europe and Americas in the light of the recent money devaluations. Zhang (2005) has reported after studying industry data that China's outbound tourism got distributed as a result of the Tsunami. The South East Asian and South Asian countries lost from many Chinese tourists to hitherto new selection of destinations. The notion of the region was one of high risk and this eventually resulted in loss in vacationer numbers and earnings. The new destinations garnering attention even noticed increase in prices. Travel insurance was more sought therefore of the tsunami phenomena. Also, Ichinosawa (2006) provides features concerning how Tsunami stigmatized Phuket as a visitor destination. Leiper and Hing (1998) studied unrelated four occasions in 1997-98 in the Asian framework and the effect on the tourism sectors of the respective nations. The happenings included huge forest fires in Sumatra and Kalimantan, Chinese takeover of Hong Kong, the triggering of Asian OVERALL ECONOMY with currency collapse in Thailand and social and monetary unrest in Indonesia; and political and monetary crises in Cambodia. These they inferred led to decrease in international as well as home travel and leisure. Thus, chance was a major factor here.
Malhotra and Venkatesh (2009) have explored how essential it is to have contingency strategies for crises and offer suggestions to proactively design an emergency management plan; even to be mindful when things go really bad. They likened Hong Kong's strategy and Thailand's response to the Tsunami and the SARS outbreak. Predicated on such deliberations they recommend having fluid set ups and policies based on the organizational design, to be able to effectively and well-timed package with uncertainties of various varieties. They name various sorts of crisis, along with almost all their stages and depending upon the readiness of the affected entity (nation etc) decides the gap that should be filled in terms of turmoil management. This they argue is the responsibility of the hospitality and travel and leisure industry. The role of the federal government in formulating beneficial procedures then becomes important given the aforementioned chance factor is so influential in the travel and leisure industry. Thus, assignments of chance and federal government are reported to be critical with regards to the tourism industry. The affect chance has over government insurance policies (and even government authorities themselves) means that chance is much too important and thus should be thought to be intrusive, internal factor included with the whole platform of the precious stone model. Plainly, for the case of an extremely specific industry like tourism and a country where the government (straight or indirectly) retains over fifty percent of its net capital stock (Phongsathorn, 2001), the federal government cannot be left out as just an exogenous factor. It really is too important to be dealt as an influence. Thus, administration should be thought of as an endogenous element in the model. Also, authorities today has more a role of any collaborator than just an influencer or policy maker.
Considering that the precious stone framework is not put on services as it's been to manufacturing companies, and also less work is done specifically on the travel and leisure industry using the model, the role of the exterior factors have to be observed in new light. Besides, travel and leisure itself is such an industry which regarding nations like Thailand may combine the complete country as the operating area. More recently, Pettus and Helms (2008) have included administration in an endogenous role in the diamonds model construction, while analyzing the case of Argentina.
Though, Porter (1990) has opined that chance happenings are outside the control of the industry, nevertheless its effect can be negated. Also, wise investment and planning can actually avoid the occurrences of man-made disasters and decrease the probability of many untoward occurrences. Besides, the operationalization of chance even outside the diamond as an exterior factor is also very difficult.
It is noteworthy also that chance even influences the government and its role. Within the circumstance of much globalized world where two countries aren't isolated any more and the events in a single country affects the other in a more significant way than ever before the model requires an upgrading. Thus, a case has been designed for the exogenous factors - Federal government and Chance to be cured as endogenous. Therefore, in effect the diamond model gives way to the proposed model (fig. 2).
Fig. 2: The Proposed Revised Porter's Gemstone Model Framework
Government
Related & Helping Industries
Firm Strategy, Composition & Rivalry
Chance
Research Methodology
The study recognizes the key factors that act as constituents to the many determinants of competitiveness of the tourism industry of Thailand. It also checks the role played by Chance and the Government in altering the industry's competitiveness. For this, unforeseen incidents and government procedures and their effects were analyzed and extensive books reviewed to achieve the above stated targets. Several telephonic interviews with Thai people were conducted to probe into specific areas also to corroborate results. Thus, primarily the analysis is qualitative in aspect.
Discussion and Analysis
Factor Conditions
Factor conditions like infrastructure have been around in the government's eyesight along with the human resources. However, it is perchance that the multi-million buck airports which were to be always a gateway to Thailand and its own scenic beauty was the centre of anti-establishment protests and subsequently two airports were then shut down.
Thailand's natural resources like beautiful beaches definitely provide a competitive advantage. This factor condition is also one of the main element factors for the travel and leisure industry. Its spicy food, hospitality and amazing culture are natural attractions.
The significant external marketplaces for the travel and leisure industry are extensively spread across the world and include major Europe, the U. S. and today even China.
Thailand's ideological commitment to liberalization and available economy has already established major effects on the industry dynamics especially over the long term. Knowledge resources also have expanded. Capital resources that have been an area for matter has been dealt well in recent times and policy steps for financial marketplaces has managed to get more reasonable and less susceptible to international volatility in comparison to early years.
Location is unquestionably an important concern here. Singapore and Taiwan are so very important to global businesses because of their proper location. Quality and quantity of highly skilled employees for the industry is also a huge concern. Serious insurance policy initiatives should be taken by their state in this regard. Recommendations are the continued development of various travel related infrastructure and maintaining and boosting an experienced labour pool.
The Tourism Expert of Thailand Travel Industry Website provides online training for the industry personnel.
Another facilitator for easy travel is a rail hyperlink from Suvarnabhumi AIRPORT TERMINAL to Bangkok through a sky teach. This initiative reduces the travel time for you to 15 min and it is greatly liked by travelers.
There is growth in the road linkages. The newly created North South Economic Corridor web links Thailand to other Asian countries by means of a twelve hundred km R3A road highway which links Thailand with Laos to China emerging from Chiang Rai in Thailand originated successfully in '09 2009. Thailand is becoming known because of its status as a definitive hub for local aviation. It offers strong aviation linkages and airlines presence. Now, many countries have more flights from Thailand than most others in the whole of Asia. You will discover every week 131 direct by around 13 airlines linking Middle East Asia. Thailand is dished up by over seven-hundred flights per by charter, scheduled and low-cost airlines from all over the world. Thai Airways in addition has launched new routes to Abu Dhabhi and Jeddah form Bangkok. Tehran-Bangkok website link has been proposed. Similarly, rival Emirates Airlines have inducted Airbus-380 aircrafts because of its Bangkok path to provide daily service from the location of Dubai.
Human Resources: Labour Drive Reports 2009 (Source: NSO)
Total populace is 66. 72 million which persons who are aged below 15 are 14. 15 million, and people aged 15 years of age and over 52. 57 million. Total work force (Available for work) 37. 53 million. Folks not in labor force (Not available for work) are 15. 04 million. Thus, used folks are 36. 50 million, unemployed people are 0. 78 million. Of these seasonally inactive are 0. 25 million. Household personnel are 4. 93 million, students are 4. 41 million, as well as others are 5. 70 million.
Fig. 3: Evaluation of quantity of employed individuals between 1 / 4 1 of 2008 and 2009 by Industry
Unit: Million Persons
(Source: Labor Force Study 2009, NSO)
The physical and natural splendor of the beaches and islands of Thailand are the greatest attraction for travellers. Thailand's most popular beaches and island destinations include across the Andaman Coastline: Phuket, Mu Ko Similan Marine National Playground, Mu Ko Surin Marine National Park, Ao Phang-nga Country wide Recreation area, Krabi, Phi Phi Islands, Mu Ko Lanta Marine National Recreation area, Tarutao Marine Country wide Park; across the Gulf of Thailand: Cha-am (Hua Hin), Ko Samui, Ko Pha-ngan, Mu Ko Ang Thong Sea National Playground, Ko Tao and across the Eastern section: Pattaya, Rayong & Ko Samet and Ko Chang Marine National Playground.
The Country wide Telecommunications Commission Work of Oct 2004 along with the prior Telecommunications Business Function 2001 has done too much to setup the competitive environment for telecommunications industry. The formation of the General Service Fund by Pet cat (Communications Power of Thailand) and TOT (Telecommunications Firm of Thailand) has provided impetus to the development of the industry. This has been instrumental for the development of the travel and leisure industry of Thailand.
Car (leases), teach, bus; taxi services are for sale to transportation. A host of other offerings are available for inland transportation which include motor bike taxis, Tuk-Tuks, tricycles, bicycles and Song Thaeo or the very popular pick-up pickup trucks. Charter, scheduled and low-cost airlines make up the air travel avenues; cruises, boat, etc provide drinking water travel facilities. Railways provide access to a big network of spots in Thailand, providing cost-effective and efficient vehicles.
Firm Strategy, Rivalry
Corruption and bureaucratic hurdles created by the government is another deterrent to it attaining its competitively superior position. Anti-trust guidelines of the Government are few and far between. There's a lot to be desired upon this front from the Thai government. A just lately enacted anti-competitive rules possessed a monumental flaw in it as it didn't apply to state-owned enterprises (that enjoyed monopoly). Environmental polices are being investigated by the state of hawaii.
To be competitive on the global system requires proficiently producing goods and services of value more than that provided by other contending nations. It is important for Thailand to take action for the tourism industry to make a make for itself on the global program in particular when its productivity levels are low.
Firms should place focus on retention of and appealing to intellectual capital. Inside the industry as well as over the industry technology should be shared.
The Trade Competition Action 1999 and thus the Trade Competition Board helps provide reasonable trade. THE OVERALL Agreement on Trades in Services (GATS) furthers this cause. However, the anti-trust procedures are not very effective as these are biased towards the government. Also, the players pay a high price for the illegal or unethical routines of rivals. The governmental officers prove a bane as there is certainly rampant corruption and cases of corporate cronyism provide hinder good competition between your players. The rivalry is also relatively less strong than maybe it's to obtain additional value for the consumers for the assistance offered. The local foot of the competition makes the rivalry worthwhile. Employer and labour relations are effectively cooperative to discourage any untoward strikes or major hurdles in provision of beneficial output.
There is satisfactory decentralization of varied corporate activities and delegation of responsibility and power is a prevalent phenomenon. However, the organization planks leave more to be desired in terms of efficiency.
The cry for increased privatization is justified as it could certainly assist in making the industry more competitive. Greater role of the private sector would ensure better management and corporate governance practices, reducing the business related corruption highly prevalent today. This process could be expedited by better corporate and business control activities, maintaining ethical business requirements, sharing management understand how, devising incentive founded compensation systems, applying performance established appraisal systems, and having collaborative partnerships with local players with an understanding that routines to be in the right nature, having joint ventures, etc. Considering the significant role of the federal government in this industry, Private people partnerships (PPP) could effectively achieve the essential competitiveness for being one of the best globally.
No uncertainty that if this is implemented properly over time then the incident revelations from CNN's study of global travel and tourism that Thailand was the best on the basis of value for money amongst all countries in the Asia Pacific region would not be an isolated event but among some similar results.
'Turtle Conservation Plan' in Mai Khao area which included beach and reef cleaning is a PPP initiative for environmental things to consider.
Interestingly, many hotels in Thailand have lifted the quality benchmarks in conditions of environment friendliness by heading smoke-free i. e. promoting anti-smoking measures.
Thai Airways and Nok Air have decided to cooperate to boost up local traffic over specific routes like Bangkok to Phitsanulok, Bangkok to Ratchathani and Chiang Mai to Mae Hong Son
Already Thai Airways is area of the Legend Alliance - the world's first major global air travel alliance which aids its network businesses.
Demand Conditions
The interior demand though grown is bound by the population size and disposable earnings. Reductions in prices have prompted local demand lately. However, Thailand might not have the ability to charge the prime it did during the hey-days. And any more price increase will discourage local demand. However, the internal demand for Thailand's tourism industry offerings has been seen to expand in recent years.
Advantage for Thailand is present in the offerings in terms of assorted services and a competitive value proposition vis- -vis other countries. Also, the effective tendency of the neighborhood tourists to immediately recognize the latest offerings made available from the tourism industry makes the demand.
A few regulatory standards for tourism based mostly trade and environment are exacting in dynamics. Even the intellectual property protection under the law and safety expectations for online trades are less than appealing providing less encouragement for advancement and stimulation of demand.
However, not only does indeed the inner demand conditions condition the industry to be competitive globally it offers an avenue for experimentation and more importantly provides income when global visitor inflows ebbs below expected levels. Increasing inner demand could then easily be used as a hedge for fluctuations in selections from international tourists especially through the off times.
Specialized market sections for professional services and distinctive benefit segmentation provides impetus to the internal demand and consequently to the exterior demand. In this regard providing incentives for creativity and assisting multinational corporations should be the guidelines pursued by the industry.
There are various activities a visitor or holiday can carry out for pleasure. Thailand offers a wide array of such offerings such as shopping, golf, excursion treks, hill tribe visit, special baking and food, elephant trips, special celebrations and get-togethers, spa, spiritual and religious insights and learning (especially Buddhism), meditation, water activities, etc.
Water sports activities include diving, sailing, yachting, cruising, canoeing and kayaking, going swimming and snorkeling, sportfishing, windsurfing, rock climbing and bouldering, aircraft snow skiing and wakeboarding. Medical-tourism and business incidents also form an integral part of the range of offerings.
Many indigenous happenings attract guests from within and outside the country thereby revitalizing demand. Some key occurrences that happened every once in awhile in Thailand will be the Luang Phor Thuad and Sunflower Field Happening coping with the first blossoming of sunflower at a distinguished temple and paying tribute to Luang Phor Thuad, Chinese New Year Rational where prayers are offered the Chinese language way, and there are opera shows and a food festival for vegetarians, Chinese language Lantern Festival in which a competition for lanterns and its own decoration is presented, World Wetland Day affecting environmental related activities and understanding, bird watching and games, Eco-tourism and Kasalong Flower Festival involving bonfire and camping activities, showcasing of uncommon species of crazy flowers and visiting caves, Thailand International Kite Happening that showcases traditional kites from different parts, kite flying competitions, etc; Thai Sky Event including a show of Skydiving by skydivers from many countries, Traditional Platinum Leaf Covering Wedding ceremony at Kuiburi Temple including prayers and religious rites as the name suggests yellow metal leaf covering, Blooming Lotus Event providing a tour of the Lotus Pond and trekking, Hua Hin Jazz Celebration where Jazz concerts are performed, Hua Hin Regatta involving a competition of sailors, Hua Hin (Cha-am) Golfing Festival regarding golfing contests, Hua Hin Retro Car Rally which involves parading vintage autos.
Many sports occasions, trade situations and festivals have been planned for getting visitors to Thailand in 2009 2009. Important among we were holding the 1st World Funny Film Event, Thailand Grand Sale 2009, Thailand Tourism Celebration (TTF) 2009, LPGA Thailand 2009 (Golf), This year's 2009 King's Cup Elephant Polo Event, 1st Asian FIGHTING TECHINQUES Game titles, Loi Kratong, Candle Celebration, Songkran Festivity and the 14th ASEAN Summit. New destinations like Sirindhorn Museum and Phu Kum Khao Dinosaur Excavation site, Chiang Mai Zoo Aquarium, Dragon Descendants Museum, etc attended up.
It is interesting to notice that Thailand was voted as the best sailing location in Asia in a poll conducted by Top of The Gulf Regatta. Also, Phuket King's Cup Regatta was the victor for best regatta in Asia. Thailand was also voted as the 'Asian Spa Capital' for 2009 by AsiaSpa magazine. Also, Thailand acquired the Destiantion Spa of the entire year for Six Senses Destination Spa in Phuket.
The major areas chosen by vacationers are (by region):
Central Thailand: Ayutthaya, Bangkok, Hua Hin, Kanchanaburi, Cha-Am, Chachoengsao, Lampun, Nonthaburi, Petchburi, Phetchaburi, Prachuab Khiri Khan, Pranburi, Samut Songkhram, Saraburi.
Southern Thailand: Koh Lanta Island, Koh Phi Phi Island, Koh Samui Island, Krabi, Phang Nga, Phuket, Trang, Chumphon, Head wear Yai, Khao Lak, Koh Phangan Island, Koh Tao Island, Nakhon Si Thammarat, Ranong, Suratthani.
Eastern Thailand: Koh Chang Island, Koh Samed Island, Pattaya, Chanthaburi, Chonburi, Koh Kood Island, Rayong, Trat.
Northern Thailand: Chiang Mai, Chiang Rai, Mae Hong Son, Sukhothai, Lampang, Phetchabun, Phitsanulok, Tak.
North-East Thailand: Nakhonratchasima, Khon Kaen, Loei, Nong Khai, Ubonratchathani, Udonthani.
Latest foreign technology is available to it and this should be made good use of by the industry players and the government. Usage of ICT (info-communications and technology) in hotels and the areas is a step in the right direction.
The pursuing of the Legend Rating methodology for hotel expectations by Thailand's top hotels was a step in reaching quality and reputation.
To the advantage of Thailand is the amount of orientation of the travelers approaching to Thailand and the internal holidaymakers as well). These are more or less favourable for the state of hawaii and really should be capitalized upon. 'Thailand Travel Mart' was a big show off for travel and situations organised in June in Bangkok. Such occurrences promote the internal demand significantly.
Inadequate reliance on experts and pros for managing the business enterprise and related aspects of the industry, poor managerial technology, low level research and development activities for the tourism industry, offers a hindrance for Thailand to emerge competitive against other players compromising the very dynamics of its competitive edge. The extents to which it brands its industry though much better now and steadily improving over the years even in quality, leaves more to be desired in this entry. Basing compensation on incentives is another advice for the industry. Training staff, at various levels must put together a skilled workforce and reliable labour pool for the industry.
Related and Aiding Industries
The tourism industry is well connected and 'associated' with business like the vehicles and hospitality. Area of expertise services and has also provided impetus to the industry. However, the stigma of child prostitution and Helps epidemic continues to be a major matter for the government of Thailand.
Labour output of Thailand is also not competitive by any means. The revenues per tourist to Thailand are significantly less than many competitors in your community. Also, these have not gone up over the years. Understandably, this was because of the chance factor but nevertheless, it appears to compromise the competitiveness of the industry even further.
The need for the construction applied here's that it helps identify sources of competitive edge. One specific market is the forming of clusters. Domestic rivalry and geographic awareness enhance competitiveness of Thailand's travel and leisure industry. The six factors depicted in fig. 2 help the platform become system. Scalability, magnification and improving help provide linkages and networks. These thus assist in forming clusters which provide competitive advantages.
Efforts should be produced to generate special business connections with the many players. Partnerships and alliances between and across the industry may help get the utmost value to the consumer undoubtedly making Thailand more competitive and the forming of clusters more visible, in that way benefitting the industry greatly. Provision of incentives to encourage; and subsidies to support the entrepreneurial expertise in the industry's core and related areas could benefit the industry in many ways including the adoption of innovative tools, techniques and methods and even the generation of home based business models.
The main activities of the industry include that related to international travelling, operation of tours by related businesses, stay at hotels, eating at restaurants, related or relevant entertainment, and local travel and shopping.
There appears to be a good amount of clustering for this industry in Thailand; more than other major industry. The existence of supporting and related sectors supports the industry to provide more value and copy this value finally to the consumer providing the industry a competitive border globally.
The aiding companies are the local suppliers of food, the original souvenirs, the suppliers for building and construction material, service providers for financial services; and press and PR organizations.
Interestingly shopping can act as a major revenue source, increasing the net receipts from vacationers manifold. Major shopping locations include Chiang Mai and Phitsanulok in the North, Udon Thani, Khon Kaen and Nakorn Ratchasrima in the North-East, Bangkok at the heart, Cholburi in the East and in the South Phuket and Songkhla. Jusco can be an example that exemplifies the role of cooperation showing that local firms can assist in creating definitive alliances of successful partnerships. Other types of successful partnerships are Charoen Pokphand (CP), 7-11's franchise with Siam Makro developing an alliance with Makro, a multinational corporation.
Role of Government
The coverage of the federal government directly effects the industry. Insurance plan affecting related business also inadvertently influences the industry because of the mother nature of the industry where businesses in diverse industries like transport, hospitality (hotels and spas), travel providers, etc are significantly reliant on each other. This interdependence makes any insurance plan change in one of the sectors have an impact on the complete industry. Also, this interdependence means that a service failure at any of these sectors finally maligns Thailand's reputation as it mars the grade of the entire service and experience for the vacationers.
The role of government is not just limited to the maintaining of any favourable geopolitical environment but also to provide a stable and rousing socio-economic environment. It will encourage investment by devising important FDI plans.
It needs to raise the business environment for the industry by initiating well-timed policies and have these applied effectively with time. It also needs to support the creation of competitive clusters where there exits great linkage between and across the core industry and the related and encouraging industries. Uniting the clusters to remove synergistic advantages ought to be the prime emphasis here.
It must encourage technology, empower at the neighborhood or local level for effective execution post the decision making process. Even your choice making can be delegated to the neighborhood level.
The government of Thailand should devise countrywide level policies to market the arrival of value added services to the kitty of offerings of the travel and leisure industry. It will encourage the industry to be competitive without relying only on cost as the foundation for competitiveness.
Thailand, along with ten other member countries of ASEAN was to start its travel and leisure services from the year 2010. However, because of the global downturn and difficult environment for travel and leisure, the participants accepted a proposal distributed by Thailand for an indefinite wait.
Thailand has dedicated this year to travel and leisure. This and similar policy initiatives if taken really, and repeated over time will help Thailand to enjoy huge rewards in the years to come. Its tourist - friendly visa insurance plan is a part of this very route.
The various bonuses the government could offer include fiscal and non-fiscal steps. Fiscal incentives for motivating the travel and leisure industry could include duty vacations and exemptions, tax subsidies on specific imports that related and encouraging establishments use as a key element for a key service offering. Non-fiscal steps could include provision of favourable accounting procedures specific for the industry, special plans for getting speedy and sizable funding, giving bonuses for innovation, assisting research and development, supporting environmental specifications and similar 'green' issues, subsidies, acknowledging and rewarding the work of the players.
Its efforts include partnering other countries in causes to market regional tourism and improve awareness of its industry worldwide. It should lobby for trade guidelines that encourage the industry.
The Emerald Triangle Region was such a job performed by the UNWTO post 2004 to promote tourism in your community bordering Thailand, Cambodia and Lao PDR. Likewise UNWTO also have during the same period a job initiated to market and develop ethnic traditions sites in the Greater Mekong region which included Nan destination of Thailand along with others from Cambodia, Lao PDR, Myanmar and Vietnam.
TAT or Tourism Expert of Thailand in 2009 2009 agreed upon a memorandum with the Travel and leisure Administration of China's Guangdong province to encourage travel between them.
The UNWTO in '09 2009 acknowledging the issues the industry faces due to the global recession searched for various methods for stimulating the development of tourism. A short assessment update grades Thailand to have used all methods except regional co-operation and environmental actions. Thailand has used fiscal measures, monetary measures, steps in travel facilitation, HR (employment) steps, methods of marketing and even PPP (general public private partnerships). It implanted a visa on introduction policy, making international travel to Thailand by travelers more straight forward. It waived visa fees for four calendar months (from 5th March to 4th June 2009) and now expanded the waiver till March 2010. It implemented a system for micro credit for SMEs at attractive interest rates for a period of 2 yrs with the support of various national banks. This is especially relevant for small travel and leisure providers and the cash determined total to US$ 149 mil. The Ministry of Travel and leisure and Sports in addition has been pro-active to put together a strategic plan for the longer term (2010-2012) for the industry. Already about 16. 87 billion baht have been committed to it and may be increased to almost double the amount. Improve 'factor conditions' is the top priority as per the program with focus on infrastructure.
Road shows promoting the country and tourism were done in a variety of international lands like Japan, China, U. K. , etc. Internet marketing campaigns have been used for travel and leisure. 'Thailand Real Time' and 'Thailand Super Deal' assist in promoting tourism. Jobs like 'Thailand Speak to the World' and 'Welcome Rear' have been done for the international industry and 'Spouse on Demand' for interior partners. Recent impressive online campaigns using Facebook and Twitter shows encourage results. 'Amazing Thailand Amazing Value' was another successful plan promoting Thailand as a value for money proposition.
Campaigns to promote tourism were undertaken in '09 2009 by private sector players, ministries of Foreign Affairs, Commerce, Tourism and Athletics alongside the Plank of Investment - a definite indicator of PPP. Also, various stakeholders in the industry including travel agencies, tour providers, commercial banks, customs department, immigrations, airport authorities, airlines, tourism council and other government authorities have come mutually to handle the problems of the global downturn.
For furthering the 'demand conditions' the home travel is the prospective. Allocation of US$ 4. 37 million was done to obtain a few thousand of youngsters and over 150, 000 people to travel in Thailand during the months from Apr - June of 2009. The job motivated and enforced the travels to be led by tour firms professionals, given private mentors for touring, hotel stay and foods at restaurants and the use of certified tutorials. Thus stimulating interior demand, encouraging local people to travel of their country was the target.
Tax rebates have been offered for seminar expenses (outside the house Bangkok).
A index has been posted by the Convention and Exhibition Bureau detailing the MICE venues of Thailand with other information about facilities for business. This was done to create more awareness about and promote the united states as an attractive destination for business meetings and occasions.
A 50% discount was offered on access charges to the national parks and historical sites from Feb - May 2009 and later long by a lot more months.
There were taxes exemptions for operators of hotels for the entire year 2010. Other bonuses include lowering electricity usage deposit predicated on record of their past 90 days.
For the airlines, there was decrease in the parking and getting fees. Reduction was 50% given by the Office of Civil Aviation and 20% distributed by the Airport Power of Thailand. This was applicable to all scheduled flights by any means airports till September 2009.
Other special discounts were made for specific airports like Hat Yai, Chiang Rai Air port, Chiang Mai International airport, and the Don Muang International airport till October 2010.
Also, for the passengers, check-in baggage was made free upto 40 kg weight.
An progressive transit traveler model was developed in 2009 2009 for those making a stopover for 6-12 time (4-11 eventually). Such individuals would be provided brief tours around Bangkok. Relationship of Thai Travel Agents (ATTA) and the Travel and leisure Authority of Thailand arrived mutually for such a program highlighting the PPP and its own usefulness.
Campaigns like 'Fly THAI Get More' have been performed to promote flights.
'Flyer Go' and 'Look Cards' help customers get better deals and offer them convenience.
The government has even used a Germany structured consultancy group to help build a sustainable travel and leisure development framework for Thailand's coastal areas in the Andamans. This entails biodiversity and tourism development. Ministry of Travel and leisure and Sports activities initiatives to build up tourism and the service benchmarks for tourism's product and services is also a step in the correct course. This provides greater transparency, compliance, protection and quality besides standardization.
Role of Chance
Political unrest and tussle with the Royal family have spoiled the image of Thailand as the perfect holiday place and as a anxiety free zone. The Asian Turmoil was the result of poor financial insurance policies of the federal government. Devaluation of the Baht performed result in hook increase of international vacationers as they liked the great forex rates. However, for Thailand it was no net gain. A World Bank Record in 1993 referred to Thailand as an Asian Tiger, ready for considerable expansion in the years to come. However July 1997 observed the Asian FINANCIAL MELTDOWN. Consequently, a string of chance situations detrimental to the passions of Thailand and its tourism industry specifically arrived. Tsunami, Sept 11 disorders, global downturn, financial crunch, SARS; H1N1 and other diseases, political unrest, restored speculation of another global downturn - all these spoilt the wish run of Thailand's booming tourism industry. Fuel prices and weather also play spoil-sport at times increasing the support in view of chance as an intrusive and vital component of the platform.
Consider the Bali bombings and the September 11 attacks in the US. These were happenings that were in a roundabout way related to Thailand but acquired far reaching results for its travel and leisure industry. Thus, the competitiveness and elegance of Thailand's tourist destinations were undermined by no problem of its own. These could only be explained by the role of chance.
In the wake of the unfavorable situations the role of chance becomes significant. Actually in today's framework this is related to as the 'constant great shock syndrome'.
The role of chance used as endogenous somewhat than as an exterior influencer may raise doubts. Michael Porter (1998) suggested that in the precious stone construction chance was an exterior player as it was the factor which was from the control of the industry. However, considering all the debate given earlier and the fact that federal government itself is to be considered an internal agent, in the framework of Thailand which includes had so much political trouble and has had five Perfect Minister shuffles in as much years suggests that chance may have a larger inner role as well. Also, considering chance as 'probability', the likelihood of any event, adverse or favourable can be changed by pro-active engagement or high speed reaction. Thereby, the probability of an event occurring is modified. It means in other words that building earthquake proof homes would neutralize or reduce the ill effects of an earthquake or having sound long term financial policies would avoid monetary crisis like the Asian Crisis. Thus, in effect chance too is influenced. This makes the case for the endogenous role of chance even much better.
The development of the Travel and leisure Intelligence Device and Turmoil by Tourism Authority of Thailand is a part of this way. It evidently spells out the belief that managing the risks related to travel and leisure commences much before a crisis develops. Early recognition and alert systems to serve before, during and after crisis is set up. Using marketing intellect tools they have got verified three reasons for the downturn in Thailand's tourism related revenue. They include concern with H1N1 disease but moreover the global monetary slowdown and political instability leading closure of the airport terminal in addition to the Songkran agitation. Air port security charge 2009 was enacted to ensure airport and visitor security in the future and curtail similar incidents in the foreseeable future. Early warning systems were put in place and evacuation drills were conducted in Phuket's Patong beach. National Disaster Early Warning Centre is currently in place to effectively monitor and record any likelihood of similar disasters assisting disaster protection and mitigation. Deep clean fumigation, disinfection, use of TRUE HEPA air filters; surgical masks are a few of the actions Thai Airways has undertaken for preventing H1N1 and similar diseases. The Sky Coach and general public areas are regularly sprayed with germ eradicating chemicals to reduce get spread around of such contagious diseases. The Ministry of Community Health issues rules every time a need develops for such diseases. Thailand along with others has made the ASEAN Regional Website to counter terrorist problems and reinforce border security.
Studying the impact of the tsunami on the vacation resort areas that were the most influenced - Khao Lak, Takua Pa, and Ko Phi Phi, Garcia et al. (2006) have suggested the role of planning and design in the risk mitigation and restoration process.
Branding and proper campaign of your respective country as time passes creates a valuable and powerful brand. If the rival brands (other countries) face some undesirable events by chance or lose their competitive edge due to poor usage of their resources and cluster systems, the country would stand to gain and have an advantage over your competition. Thus marketing pursuits like brand building are a great way to be pro-active in search of opportunities.
Conclusion and Tips for Further Research
From 81, 000 visitors in 1960 and revenue of US$ 10 million, to 14 million guests and earnings of about US$ 15 billion US, Thailand's tourism industry has come a long way.
Thailand's capital Bangkok was voted as the 'Best International Business City' by the viewers of 'Travel and Leisure' journal and CondeNast Traveller, US. Thailand also won the Norwegian and Swedish Grand Travel Award to be the 'Best Vacationer Country in the World' for 2009. Despite all this one has to consider other activities. According to the Global Competitiveness Statement 2001, Thailand comes 35th out of eighty countries analyzed in conditions of overall competitiveness. An umbrella strategy using to its profit its natural resources and forcing key educational programs, for the available clusters in the tourism industry can help Thailand go a long way in helping travel and leisure blossom as well as press up its overall competitiveness regarding other competing countries.
To gain competitive border more than just Chance playing a role, the government assumes a substantial responsibility to assist and encourage a larger interaction between your nodes of the diamond - the factor conditions, the demand conditions, related and helping industries; and stable rivalry and strategy. This it can do with greater PPP and insightful guidelines. The various procedures and initiatives they have undertaken to stimulate the tourism in the wake of the global downturn are commendable and needs to be continued in future. The concentration should be the same - how do Thailand's tourism industry be globally competitive. For this the areas of weaknesses discovered should be handled and advantages built upon. Only then will Thailand's travel and leisure would be at par with the best in world in conditions of its value proposition. Innovation also needs to be considered as Davis and Ellis (2000) advocate that invention should be urged so as to achieve competitive benefits.
For further related research various other variables under the factor conditions, demand conditions; etc could be evaluated in detail for the travel and leisure industry of Thailand. Also, it could be examined as how the cluster network of Thailand differs from other tourism industries across the world. A study of varied factors common to competitive travel and leisure companies of the world could be carried out predicated on the standards of competitiveness as proposed by Porter's Diamond framework. New industries and areas where in fact the re-conceptualized Porter's Gemstone Model could be applied may be explored.
