PESTLE Analysis

Political

In the past five years, Thailand had been facing problems in political and poor management of government, which result in lower confidence from investors. Unstable politic condition also affected Thailand tourism image and confidence of tourists, which resulted in shifting of tourism destination to other countries. This situation not only had direct effect tourism industry but also affected other relevant businesses and country’s GDP.

To reform the economic, Thailand government has developed Tourism strategic plan with the target of 6% increasing in average spending per tourist per year from 4,900 Baht (2016). According to Thailand tourism strategic plan (2021 growth roadmap), Thai government has built 3 strategies for tourism development⁶, which are;

1. Advancing the quality of tourism attractions, products and services to support the rising number of tourists.

2. Advancing fundamental facilities to support the rising number of tourists.

3. Human resource development to increase involvement for Thai people The Tourism Authority of Thailand (TAT) introduced customized marketing campaigns to target particular groups. TAT paid particular attention to rapidly growing inbound countries such as China, Russia and India. TAT tailor-made marketing to match

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the character of each target market; for instance, celebrity marketing to target Chinese tourists, luxury and medical tourism to capture Russian tourists, and honeymoon and scuba diving packages to target Indian travellers.

Economic

Average growth of Thailand economic was 3.5% during 2005-2015. Comparing with 10 years ago, Thai citizen are having greater welfare such as health insurance and more years of education. Poverty rate has decreased from 67% in 1986 to 11% in 2014

Thailand GDP grew by 2 percent a year in 2014 and 2015. According to the forecast of World Bank, GDP will grow at 2.9 to 3.3% for 2016-2018.

The capital Bangkok has become the center of economic activity and the most prosperous part of the country, accounts for about 60% of national GDP. Thanks to Bangkok’s competitive infrastructure, the city is competing with Singapore to become a regional hub for air travel within Southeast Asia.

Thailand government’s recent 20-year strategic plan addresses economic stability, human capital, equal economic opportunities, environmental sustainability,

competitiveness, and effective government bureaucracies. These include the

implementation of large public infrastructure projects, setting up of a state enterprise policy committee to improve state-owned enterprise governance. Thailand also continues to reform in additional areas such as education, public infrastructure management. The World Bank is supportive of the reform agenda.

Social

Thailand has strong cultural tourism image, especially Thai hospitality that helps create great experience for tourists. However, Thailand is facing problem of changing in population structure, which makes the country become aging society with the decreasing size of young people and workforce. Moreover, Thai society has confronted a crisis of greater cultural diversity in society and declining ethical and moral values, as well as a widespread use of drugs and gambling, particularly by young and adolescent groups. At the same time, Thai people are increasingly active in politics and pay more attention to social responsibility and governance.

The rapid spread of AIDS in Thailand has had impact on the tourism industry as the country's reputation for having a high incidence of AIDs discourages tourists from visiting.

Technology

Thailand's capital is known for being congested cities in Southeast Asia. According to a study by INRIX, Bangkok drivers spent an average 64.1 hours stuck in congested traffic in 2016⁷.

Bangkok is currently served by three rapid transit systems: the elevated BTS Sky train, the underground MRT and the Airport Rail Link. The BTS and MRT have had several route extensions since their openings. As of 2016, several additional transit lines and extensions are also under construction. The entire Mass Rapid Transit Master Plan in Bangkok Metropolitan Region consists of eight main lines totaling 508 kilometers. It was planed to complete by 2029.

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7http://inrix.com/resources/inrix-2016-global-traffic-scorecard/

Figure 5 Mass Rapid Transit Master Plan in Bangkok Metropolitan Region

Source: Bangkok Mass Transit System Public Company Limited

Thailand has about 53 JCI-accredited hospitals in Bangkok, Pattaya, Phuket and Chiang Mai. The accreditation, given by the Joint Commission International of the United States, is a standardization marker for healthcare service providers around the world.

According to the data from TAT, 53 percent of tourists in 2015, or about 16 million, came for medical and wellness treatments. Tourists who specifically sought medical

treatments came in at 857,086, a 25 percent increase over the previous year. The rest are

those who came for wellness tourism, which is 38 percent increase over 2014. By the end of 2018, Thailand expects to receive about 1 million medical tourists⁸.

Legal

Thailand currently offers visa-free travel to nationals of 57 countries. Nationals of 21 countries can obtain a visa on arrival.

Figure 6 Thailand Visa Policy Map

Source: https://en.wikipedia.org/wiki/Visa_policy_of_Thailand

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8 http://www.thenational.ae/business/travel-tourism/healthy-outlook-for-thai-medical-tourism-demand

Thai government has issued new Ministerial Regulation to support hostel business in Thailand. The Other Types of Building Used for a Hotel Business Operation B.E. 2559 (2016) under the Building Control Act B.E. 2522 (1979) came into effect on August 19, 2016⁹. This Ministerial Regulation allows for certain types of building to be used as a hotel after they comply with specific safety requirements or measurements.

The Ministerial Regulation states that the use of other types of building which existed before August 19 can be changed to be as follows: (1) hotels providing only accommodation; and (2) hotels providing accommodation and a restaurant, or a place for serving food or cooking food. The application to change the use of a building must be filed within five years from the effective date of the Ministerial Regulation.

Based on new Ministerial Regulation, temporary accommodation businesses, which are using other non-qualifying types of buildings for their hotel businesses could avoid heavy penalties by altering their buildings to comply with the new rules and regulations.

Environment

Thailand offers a great variety of attractions. These include diving sites, beaches, hundreds of tropical islands, archaeological sites, museums, hill tribes, flora and bird life, palaces, night-life, Buddhist temples and several World Heritage sites.

Although there were serious natural disasters in Thailand and other countries, we continued to see the strong growth of number of arrivals. Other than Thailand’s culture and attractive historic sites, it is value for money destination for shopping, dining and

accommodation as well.

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9www.bangkokpost.com/print/1110257