Chinese ‘zero dollar’ tour companies dodge Thai crackdown – and travel agencies defend the practice

Welcomed during Thailand’s economic slowdown, such ‘forced shopping’ tours are frowned upon for tainting visitors’ image of country; if ban won’t stop them, the growing trend of individual travel from China may see them die out

PUBLISHED : Saturday, 27 January, 2018, 5:16pm
UPDATED : Saturday, 27 January, 2018, 8:09pm

Whenever you go to Thailand these days, hordes of Chinese tourists can be spotted chatting noisily as they queue at Bangkok’s Suvanabhumi airport for visas.

You’ll see them ordering 40 baht (US$1.30) bowls of noodles at roadside stalls, shopping in the malls, and posing for group selfies at temples. They can also be seen checking in at various hotels or sharing photos on their smartphones as they board and disembark from coaches in major tourist destinations such as Bangkok, Pattaya, Phuket and Chiang Mai.

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Although the Thai government has been actively courting the Chinese market, as a result of which Chinese visitors made up about 8.7 million of the 34 million tourists to Thailand in 2016 – a 10.3 per cent increase from 2015 – there are a number of factors behind the increased tourist traffic from China.

The uptick in arrivals from China has widely been attributed to the phenomenal success of a 2012 Chinese road movie, Lost in Thailand, but there’s also the favourable exchange rate between the Thai baht and Chinese yuan, a growing Chinese middle class whose incomes are rising and who are eager for travel and adventure. Tying it all together is the availability of so-called zero-dollar tours that are touted as great holidays at fire-sale prices.

However, these popular package tours – organised by proxy companies with Chinese owners, but registered in Thailand – have been controversial. Once welcomed because they brought more tourists into the country at a time when the economic outlook was bleak, the Thai government had a change of heart a little over a year ago and announced a crackdown on operators, saying they harmed the country’s image.

Once in the country, visitors are often pressured into buying goods from certain stores while on tours, and sometimes browbeaten into buying additional gifts. If they object, they are scolded and even punished. They may not have their hotel room key returned by their guide, for example, according to a report last year in the Financial Times.

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The Thais have other problems with these tours. As a result of the way they are managed and financed – by Chinese nationals – much of the revenue generated goes back to companies in China, at the expense of local Thai hoteliers and restaurateurs, who receive a much smaller portion of the revenue. The tours also avoid local taxes, depriving the Thai treasury of millions of dollars.

Despite the crackdown, the problem of zero-dollar tours appears far from over. The Phuket Gazette reported this month that the island’s Kathu Temple has recently been inundated with hundreds of coaches a day dropping off Chinese tourists. The temple makes money from selling lucky religious amulets, reportedly for 20,000 baht (US$627) and more. The Gazette reported that the temple has been working in conjunction with a Chinese tour company.

Part of the attraction of zero-dollar tours for Chinese visitors to Thailand is that all their needs are seemingly catered for. Being unable to speak more than a few phrases of English, and probably no Thai, going on a tour avoids language problems. Although this has its pluses, it can also be a problem because they have difficulty complaining to Thai police when they are pressured into buying products they don’t want.

The Thai authorities launched a crackdown in October 2016, when three large zero-dollar tour companies were busted, resulting in 2,150 tour buses being impounded and 29 operators prosecuted during a Chinese “golden week” holiday.

Zero-dollar tours are a violation of consumer rights and bad for both Thailand and the Chinese travel and tourism industries. Government action was clearly required in this case
Yuthasak Supasorn

Yuthasak Supasorn, governor of the Tourism Authority of Thailand, told the South China Morning Post that the biggest problem with the zero-dollar tour operators is that they deny Chinese tourists’ access to quality tourism products and services.

“They create a misleading image and perception of Thailand as a destination,” he says.

The government was “just doing its job”, he says of the crackdown. “Zero-dollar tours are a violation of consumer rights and bad for both Thailand and the Chinese travel and tourism industries. Government action was clearly required in this case.”

Suparerk Soorangura, president of the Thai Travel Agents Association, holds a different view, however. “This type of business should not be considered criminal, because it is not against the law or any regulations, and consumers understand the conditions of packages at the time of purchase,” he says.

“National tourism offices of many countries use the same tactics to lower the cost of package tours by giving out subsidies per headcount to tour operators who bring tourists into their countries. The Thai authorities concerned should have more understanding of the business practices in this competitive world.”

The Thai tourism authorities are out of touch with current practises in the global tourist industry, he adds.

“I think the Thai authorities have to learn and understand more about private sector business practices. Thailand is not the only country attracting these kinds of package tours. Even for Thai tourists travelling overseas to some countries, we are facing the same issue – to have cheap tour fares with compulsory stops at shops, otherwise the tour fares increase.”

Thailand is not the only destination where hapless Chinese tourists on cheap tours have been herded into shops and expected to spend their money. In Hong Kong, for example, the shady business is known more bluntly as “forced shopping” tours.

Visitors receive free or cheap hotel accommodation and transport, but spend most of their time being taken to shops and pressured into buying goods. The Chinese government banned such tours to Hong Kong and Macau in October 2013, following reports of abuses. However, operators continued to flout the ban.

Two years later, in October 2015, a group of 19 Chinese tourists were taken to a jewellery shop in Hong Kong’s Hung Hom neighbourhood. An argument broke out after one of the visitors refused to make a purchase. Miao Chunqi, 53, a member of the group from Heilongjiang province, tried to intervene and was beaten up by four men. He was later certified dead in hospital.

Thailand is not the only country attracting these kinds of package tours
Suparerk Soorangura

Despite Thailand’s huge success in attracting tourists from around the world in the past few decades – who visit in droves to enjoy the country’s white-sand beaches, or for shopping, entertainment and great food – Suparerk says management of the tourism sector still leaves much to be desired.

“With poor management and poor infrastructure, even with far fewer tourists it will damage the environment. The government and Tourism Authority of Thailand have to use marketing tools to do promotion to the segment of the market they want to attract,” he says.

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Thai authorities have long sought to attract more well-heeled visitors, rather than be known as a destination for backpackers and sex tourists. Presumably, zero-dollar tour members are also on the less welcome list.

“We also have to bear in mind that China is a big country, with a large population and strong economy, and there are many more high-end tourists who want to visit Thailand,” Suparerk says. “Do we deserve this market segment with our present poor management and inadequate infrastructure?”

Although zero-dollar tours are still bringing visitors into the kingdom, there are signs Chinese tourists increasingly dislike them. Six out of 10 Chinese tourists to Thailand are classified as “free, independent travellers” (FITs), who avoid large tour groups and book flights, hotel reservations and local tours using smartphone apps. That figure is expected to rise to 70 per cent in the near future.

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In an interview for the Sophon TV channel last month, the president of the Pattaya Business and Tourism Association, Ekasit Ngampichet, said that, having spoken directly with hotel owners in the resort town, there had been a 30 per cent year-on-year increase compared to 2016 in Chinese free, independent travellers.