Thai airports feel impact of reduced ‘illegal’ Chinese tours
In this article (5)
According to the Airports of Thailand (AOT) the country’s aviation industry performance only improved ‘slightly’ between October-December 2016 (Q1 FY2017), due to a reduced number of Chinese tourists visiting through ‘illegal tours’.
During the period, concession revenue grew by just +2.68% year-on-year to Baht 3,302.71m (US$94m).
“After the repressive measures against illegal tours by the cooperation between the Thai government and the Chinese government, Chinese tourists reduced consequently,” said the airports operator.
“Therefore, tourism industry didn’t grow as fast this quarter because the Chinese are the largest group of foreign tourists visiting Thailand.”
GROWTH OF MIDDLE-INCOME PASSENGERS
However, ‘a more stable domestic political situation’, the government’s domestic and international tourism stimulus policies, and the rapid expansion of low cost airlines, increased new demand for air travel for middle-income groups, says AOT.
The effects of the aforementioned ‘repressive measures’ were also compensated by increases in other foreign travellers, especially Russian and European passengers.
“The consequence of the repressive measures against illegal tours by the government is expected to affect the volume of Chinese tourists for a short period of time,” adds AOT.
The total number of passengers served by Thai airports reached 30.69m in the October-December 2016 period; a 6.11% increase compared to the same period last year. International traffic made up the majority of total traffic at 16.52m international passengers.
Net profit for the three-month period ended 31 December, 2016 reached Baht 5,084.22m (US$145m), up +9.91% compared to the same period last year.
INCREASE SALES OR SERVICES REVENUES
Revenues from sales or services increased by Baht 798.77m or 6.76% as a result of an increase in aeronautical revenue of Baht 254.32m or 3.72% and non-aeronautical revenue of Baht 544.45m or 10.93% because of an increased number of flights and passengers.
Non-aeronautical revenue of Baht 5,526.73m increased by Baht 544.45m or 10.93% comparing to the same period last year due to an increase in service revenues of 31.02% attributed to advance check in costs to passengers.
“This was because AOT installed Advance Passenger Processing System (APPS)on 1 December, 2015.
Questions & Answers
Q.What caused the slight improvement in the Thai aviation industry's performance in late 2016?
What caused the slight improvement in the Thai aviation industry's performance in late 2016?
The aviation industry's performance was affected by reduced Chinese tourists from 'illegal tours'. This impact was partially offset by a more stable domestic political situation, tourism stimulus policies, and low-cost airline expansion.
Q.How did concession revenue perform during the October-December 2016 period?
How did concession revenue perform during the October-December 2016 period?
Concession revenue grew by just +2.68% year-on-year, reaching Baht 3,302.71m. This modest growth was attributed to the reduction in Chinese tourists visiting through 'illegal tours'.
Q.Did increased international traffic compensate for the fall in Chinese tourists?
Did increased international traffic compensate for the fall in Chinese tourists?
Yes, increases in other foreign travellers, particularly Russian and European passengers, helped compensate for the reduced volume of Chinese tourists. The total number of passengers still rose by 6.11% overall.
Q.What specifically drove the increase in non-aeronautical revenue?
What specifically drove the increase in non-aeronautical revenue?
Non-aeronautical revenue increased by 10.93% due to a 31.02% rise in service revenues. This was attributed to advance check-in costs for passengers following the installation of the Advance Passenger Processing System.
Reader pulse
Will Thai tourism fully recover from the Chinese tour crackdown?
17,945 votes so far