“S. Korea visitor numbers down 32 percent in Q1” blared a 6 May headline in the Vientiane Times. That’s a major plummet by anyone’s standards, and the government is struggling to uncover the reason behind its fourth largest market taking a major dive.
According to the article, an unnamed official was “unsure of the reason for the sharp decline.” The official pointed the finger at poor service quality, high costs of “services and products” at some tourist attractions, and “bad access” to many sites.
However, the Korean market can be fickle as seen in Cambodia, which witnessed growth and a peak in visitor numbers, before a notable decrease in recent years. As Luang Prabang View General Manager John Williams summed up with 30-plus years of experience in Southeast Asia, “Koreans sometimes flock to a destination for a few years and then move to another.” It’s like the flavour of the day.
Laos may be finding itself in a similar scenario. According to the “2018 Statistical Report on Tourism in Laos” published by the Lao Ministry of information, Culture, and Tourism (MoICT), numbers from Korea had been soaring.
The report states that 81,799 Koreans visited Laos in 2013. This figure more than doubled to 165,328 in 2015. The following years appeared steady: 173,260 (2016), 170,571 (2017), and 174,405 (2018), before the Q1 2019 fall. Is Laos facing the Cambodian syndrome? Has the number peaked?
Cambodia’s Ministry of Tourism December 2018 “Tourism Statistics Report” reached back to 2011, when Korean arrivals stood at 342,810. The figure from the country’s fifth top market peaked in 2013 at 435,009, but it has been downhill ever since.
By 2016, arrivals had fallen to 357,194, and the bottom was nowhere in sight. 2017’s tally managed 308,448, and the final results from 2018 show a15.3% y-o-y drop to 261,313.
Meanwhile, Vietnam keeps attracting Koreans (2nd largest market) in increasing numbers: from 536,408 in 2011 to 3,485,406 in 2018, according to a Vietnam National Administration of Tourism report. Thailand’s Ministry of Tourism & Sports publications show the kingdom has also witnessed a constant rise in Korean arrivals with a jump from 758,227 in 2009 to 1,796,596 in 2018.
As for Laos’ largest source market, Thailand’s numbers appear static to negative. The Vientiane Times reported that 2019Q1 arrivals from the kingdom fell to 421,000, a 9% drop from the same period last year. 2018’s scorecard found Thai arrivals grow by 9% to 1,929,934 during Visit Laos Year, but the number had had topped 2 million from 2013-2016 before falling in 2017.
The article states, “This year Thailand is running its own tourism promotion campaign to encourage locals to take holidays at home, an official in charge explained.”
However, Thailand is the 30th largest outbound market in the world, and these numbers have steadily climbed from 5,397,248 in 2011 to 8,203,521 in 2016, according the “Thailand Outbound Travel Report 2018,” Departures for 2017-18 were not available, but the report’s author, Imtiaz Muqbil suggests the 2018 figure could reach 10 million.
Key findings from “Thailand Outbound Tourism Market Research Report 2018” by DPI Research include:
• Thailand is emerging as the fastest growing outbound tourism market
• In 2017, there were more than 9 Million outbound tourist departures from Thailand
• Thai travellers are likely to become major spenders in Japan
• Malaysia, Laos and Japan continue to be the top destinations for Thai travellers
• Thailand is emerging as the fastest growing outbound tourism market
• In 2017, there were more than 9 Million outbound tourist departures from Thailand
• Thai travellers are likely to become major spenders in Japan
• Malaysia, Laos and Japan continue to be the top destinations for Thai travellers
While falling figures are never good, Laos remains, by far, the choice of Thais. Second place Malaysia is a close 1,780,800 (2016), while Japan has risen to 901,525 (2016). Mr Muqbil’s report suggests more Thais have greater disposable income, and the country’s agents can offer great deals to Europe, Northern Asia, and Australia. Thais now have more destinations available, with which Laos must compete.
According to the World Bank, China, Laos’ northern neighbour, is the world’s largest outbound market with 143 million departures a year. Laos hopes to capture less than 1% of them, 1 million, during Visit Laos-China Year 2019. With proper promotion, they could reach that target. An outside analyst might wonder why Chinese arrivals aren’t yet near Thailand’s visitor numbers.
News of a sudden drop from Korea should raise alarm bells, and the government’ possible reasons need to be addressed. So does marketing, as Laos is in a league with some 175 other countries. However, the MoICT has a tiny budget for tourism marketing and heavily relies on donor agency development projects with a marketing segment. But all these projects come to an end.
The private sector is moving to fill the destination-marketing void. DMCs and large hotels have for years been taking on the role of promoting Laos. We Are Lao aims to bring the little guy into the fold and reach into the lesser-travelled provinces.
The ongoing “Destination Pakbeng” campaign arose from a collaboration among hotels and Shompoo Cruises. A newly formed luxury hotel alliance aims to create circuits in Laos, starting in the northwest.
They will likely target Koreans among other markets, and Koreans may or may not return. But with an experienced private sector picking up the ball, Laos has an opportunity to evolve from an immature destination to a real player on the global field.
For the Vientiane Times story, click here.
