An Empirical On The Determinants Affecting The Thai International Tourism Industry

Tourism is a major category of international trade in the service sector which has experienced strong growth,continued expansion and diversification to become one of the most outstanding and fastest growing economic industries in the world.Rising demand for travel throughout the world makes a substantial contribution to national economies and the creation of job opportunities for countries around the word.In Thailand,the tourism industry now rivals manufacturing in terms of economic importance to the country,and it has become a new driver of Thailand's economic growth.This growth continues even in the face of many changes in the global situation,the occurrence of unexpected events and Thailand's own domestic conditions.Thailand's vibrant tourism sector has played an increasingly essential role in the economy in recent years,boosting many tourism-relevant businesses and helping to compensate for weak growth in other sectors.The recent growth in the tourism industry of Thailand has especially been driven by exponential increases in the numbers of Chinese visitors.However,Thailand is also facing more intense competition from its neighboring countries.In addition,patterns in global tourism are prone to frequent changes depending on each country's economy,tourist preferences,major trends,and regulations,and on international stability.Therefore,a deep knowledge of the main determinants is crucial for Thailand to sustain its growth and enhance the competitiveness of the nation's tourism industry.This paper attempts to examine the factors underpinning international outbound tourism to Thailand from an economic perspective,along with noneconomic and other exogenous factors.A combination of qualitative and quantitative analyses incorporating econometric estimation approaches were utilized to reach the objectives of this dissertation.The structure of this paper is comprised of eight chapters.The first three of which serve as background for the subsequent chapters that provide an overview of Thailand's tourism structure and development and then continue to provide in-depth analysis of the main characteristics of tourism behavior and travel patterns by tourist country of origin among 12 countries selected for this research.The next two chapters are reviews and comparisons of findings,including the methodology of tourism demand modelling and determinants.The following chapters further apply various quantitative techniques based upon classical economic theory and demand theory to model the international demand for Thai tourism.The author adopts a panel data model in both static and dynamic contexts to estimate tourism demand elasticities with respect to the variation of explanatory variables for each country of origin.Dynamic model generalized method of moment(GMM)regressions is our main estimation technique as well as representing the main robust findings in this study and applied to consider Thailand's tourism responses in both the short-run and the long-run.The panel dataset consists of twelve major markets of international tourism demand to Thailand,especially the Chinese tourist market,which currently provides the largest source of foreign tourists to Thailand.It will also analyze 11 other countries,such as Singapore,Malaysia,Laos,Japan,Korea,Russia,Germany,Australia,India,the UK and the US.The data cover a period of 21 years,from 1997-2017.We adopted annual time series data to avoid the possible problem of seasonal reason.In the case of this study,tourism demand in Thailand is measured in terms of the number of tourist arrivals and the volume of tourism expenditure which are the two dependent variables.The empirical results revealed that travel in Thailand is considered by foreign tourists as a luxury.High income elasticity will continue expanding in these current markets to further increase tourism demand for Thailand.It is also shown that tourism demand in the past has a positive and important effect on current tourism demand.This reflected that the tourist loyalty and the “word-of-mouth” effect play a critically important role in tourists to select Thailand as their tourism destination.Additional interesting findings are changes in competitors' prices having more impacts on Thai tourism than changes in its own price.Bilateral trade,length of stay as well as the news shock of unexpected events(SARS,the 2004 tsunami,the global financial crisis and Thai political instability)are also found to have had significant impacts on demand for Thai tourism.Additionally,the results confirm that segmentation by country is necessary for analysis as there are noticeable differences among the estimated parameters and direction of influences for each origin country.Direct recommendations and policy implications hence should be tailored for practical use with tourists from each nation.These findings could be supportive and useful for policymakers and the private sector to improve the effectiveness of strategic plans and policy developments.Promoting balance time and season of tourism,encouraging higher spending and longer stays,tapping new tourist sources and developing new market segments,maintaining the competitiveness of tourism prices and monitoring the economies of competitor countries,improving the brand image of Thailand as a quality destination,historic conservation as well as environmental protection will all help to ensure sustainable growth for the tourism industry in Thailand in the long run.