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With over 104 million international arrivals in 2015 and an average growth of 8%, South-East Asia’s travel and tourism industry has incredible potential to help generate growth, create jobs and enable regional development.
But which countries are best positioned to benefit most from the industry? You might not be surprised to find out that beautiful natural sceneries like Halong Bay and iconic cultural landmarks like Angkor Wat aren’t the only factors that determine whether a destination is competitive.
Every year, we release the Travel and Tourism Competitiveness Report, which ranks countries based on a range of policies in place to enable the sustainable development of the sector. The report looks at factors such as how easy it is to do business in a country, specific travel and tourism policies, infrastructure, and natural and cultural resources.
So which are the most competitive countries in South-East Asia? And more importantly, what do they all have in common?
The majority of nations in the region rely on rich natural resources and good prices to appeal to tourists. They also tend to be internationally open, through their visa policies. Governments in the region realize the strategic role tourism plays in creating jobs and support the sector proactively. Still, a large infrastructure (air, road, tourism service infrastructure) and ICT readiness gap remains between the most advanced in the sub-region, especially Singapore and to a lesser extent Malaysia and Thailand versus the rest. At the same time, a handful of countries in the area continue to have declining security perceptions resulting from political developments in recent years, leaving tourists with a sense of unpredictability.
While the best-performing countries have many features in common, they each have their own specificities that set them apart.
Looking at the results, you’ll see that Singapore leads the way, ranking 13th globally. It excels in 8 of the 14 pillars thanks to its strong business environment (2nd), safe and secure environment (6th), capable human resources (5th) and world-class air transport infrastructure (6th). Singapore is also the most open economy in the world, which is supported by extremely strong travel and tourism policies (2nd).
To continue enhancing its competitiveness, Singapore, should focus on enhancing its limited digital marketing and online presence to increase interest in digital demand on both natural and cultural resources associated with Singapore.
Malaysia took the second regional spot, ranking 26th globally. While it dropped one position in the rankings, Malaysia effectively improved its performance in absolute terms, rising from 4.41 in 2015 to 4.50 in the current edition of the report. The country continues to be an attractive destination thanks to its price competitiveness, its strong air connectivity and its beautiful natural resources. Malaysia has made big improvements in its ICT readiness (up 15 positions), its tourism service infrastructure (up 22 positions) and in opening up to the world (up 11 positions).
To further enhance its competitiveness, the government could further prioritize the travel and tourism industry (55th) and invest in the development of its cultural resources and business travel, while addressing environmental sustainability (123rd) and preserving its beautiful natural environment.
Vietnam made significant progress, rising eight places in the global rankings to reach 67th position. The country, which is already endowed with exceptional natural and cultural resources, has significantly benefited from improvements to its human resources and labour market. Vietnam has also made exceptional improvement to its ICT capacity and usage (up 17 positions).
Still, Vietnam could better seize the momentum by focusing more on its environmental sustainability policies. The lax regulations, high levels of emissions, deforestation and limited water treatment are depleting the environment and should be addressed, perhaps at a multilateral level, to build the foundation for a more sustainable development of the region.
The Thai government has approved a series of tax deduction measures to promote seminars, leisure travel and MICE events in 55 second-tier tourist provinces nationwide all through 2018.
These will support the Tourism Authority of Thailand (TAT)’s latest Go Local campaign, a landmark project to promote the kingdom’s secondary destinations, spread tourists between urban and rural areas, and even out traffic between peak and non-peak periods.
Tourists at Chiang Khan Walking Street in Loei, one of the selected provinces to benefit from TAT’s new initiative
Go Local targets to improve the ratio of visitors – both domestic and foreign – to main cities vs secondary cities from 64:36 to 60:40. The aim is also to bring 10 million tourist arrivals into secondary cities and communities, generating an estimated 10 billion baht (US$312 million) in tourism revenue in 2018.
As part of the campaign, TAT will cooperate with domestic tour operators and travel agents to offer incentives such as discounted meals when buying local tour packages covering secondary destinations. Travellers will also be exempt from personal income tax for the amount paid out to tour operators, hotel operators or homestay operators for domestic tours to the 55 provinces, but not in excess of 15,000 baht.
Moreover, TAT will target Stock Exchange of Thailand-listed companies with a corporate tax exemption on income equal to 100 per cent of expenses for seminars and accommodation rooms, transport and other expenses incurred for conducting staff training seminars in the 55 provinces.
TAT will also introduce the TAT Plus discount card, which can be used in participating retail and dining merchants in secondary destinations as well as domestic airlines.
Other efforts include cooperating the Thai Restaurants Association, chefs, credit card companies and provincial authorities to promote the consumption of local food and purchase of local raw materials; as well as partnering attractions such as museums and theme parks to organise activities that celebrate the local culture.
Yuthasak Supasorn, TAT governor, said: “When local communities grow, the country grows. With travel and tourism now widely recognised as a major contributor to grassroots economies, job creation and income distribution, we are now taking specific measures to ensure that the benefits are better distributed across the breadth and depth of the entire kingdom.”
A Go Local Directory will be launched to provide specific information on dining, travelling and accommodation for getting tax deductions.
Thailand received a record number of foreign tourists for a single month as a boom in arrivals continues.
Arrivals jumped almost 16 percent in December from a year earlier to an unprecedented 3.5 million, the Tourism Ministry’s Permanent Secretary Pongpanu Svetarundra said in a briefing in Bangkok on Tuesday. He predicted a fresh high in January amid the traditional peak season for tourism.
"We will continue to keep breaking records," Pongpanu said.
Pongpanu said the government is targeting 37 million visitors in 2018 and 3 trillion baht ($94 billion) of revenue from domestic and foreign tourists combined. That would be worth more than a fifth of the economy -- and put ever greater strain on congested airports as well as Bangkok’s packed roads and metro system.
Tourism and exports have contributed to an acceleration in economic growth in the military-run country, as well as an appreciation in its currency.
The baht has strengthened more than 2 percent against the dollar this year, one of the strongest performers in Asia, prompting concern that the climb will eventually harm competitiveness in Southeast Asia’s second-largest economy.
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