ASEAN to Refocus on Long Haul

Malaysia, Singapore and Thailand are putting emphasis on long-haul markets like the U.S.

By: Fred Gebhart

This year’s ASEAN Tourism Forum in Davao City, Philippines, brought good news to travel agents. Big spenders Malaysia, Singapore and Thailand are reversing course after years of cutting U.S. marketing and promotion spending.

“Long-haul markets are very productive,” said Singapore Tourism Board CEO Lim Neo Chian. “The U.S. market, for example, was up 11 percent in 2005. You don’t cut budgets in the face of 11 percent market growth.”

“It’s about time Southeast Asian destinations started courting the U.S. market again,” said Kaushik Sen, president of San Francisco tour operator World Travellers’ Club. “The numbers of U.S. visitors may be relatively modest, but the yields are high. That’s a plus for travel agents.”

“If you do a full analysis of spending patterns, long haul is significantly more valuable than regional markets,” Sen said. “Regional travelers fill rooms, but do they drink in your bars or do they buy at the 7-11 on the corner? Do they eat in your restaurants or do they patronize hawker stalls and starve your food and beverage outlets? The smart way to boost profits is to boost yield and America is the highest-yield market Southeast Asia has ever known.”

Singapore has to focus on yield, Lim said. With hotel occupancies in the high 80s, the city-state can’t absorb many more travelers.

“At the end of the day, tourism is all about raising receipts,” he said. “You can do that by increasing arrivals or by increasing expenditures. We want to make it more fun to spend more money in Singapore, not bring in more people.”

Singapore’s neighbor to the north, Malaysia, is even more focused on U.S. business. Tourism Ministry director general Dr. Victor Wee announced an increase in promotional spending as part of the run up to Visit Malaysia Year 2007.

“We want to be the top of mind destination,” Wee said. “One of the ways you do that is by increasing your marketing budget, especially in long haul markets with direct air connections. The U.S. has particularly good air access to Malaysia.”

The problem, Wee explained, is that Malaysia and its neighbors have become too dependent on regional markets such as China, India, Japan, Korea, and Singapore. Asian travelers were hailed as saviors when long haul travel collapsed in 2001, but regional markets are more loyal to price than to destination. Long haul travelers are more interested in finding a unique experience than in beating down prices.

“Asia is far more sensitive and reactive than long haul markets,” Wee said. “Yet Asia accounts for about 80 percent of our total arrivals. We need to boost our exposure in America and Europe in order to balance our market mix, so we will increase our promotional spending.”

The Tourism Authority of Thailand may have to boost its own U.S. marketing support to keep up. That’s where the Thailand Grand Invitation 2006 comes in.

The yearlong promotional campaign is centered around the 60th anniversary of King Bhumibol’s accession to the Thai throne. The anniversary will be celebrated with the largest Royal Barge Procession in history on the Chao Praya River in Bangkok on June 9 and monthly events throughout the year. TAT director Eumporn Jiragalvisul said Thailand hopes to attract a record 13.8 million visitors in 2006.

“This year, our king’s 60th anniversary, is quite important to Thailand,” she said. “He is the longest reigning monarch in the world. We will spend whatever is necessary to make it a record year for tourism, too.”