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HOME // Phuket Travel // Zero dollar tourism looms again as Chinese return to Thailand

Zero dollar tourism looms again as Chinese return to Thailand

Chinese zero-dollar tours return to Thailand
PHOTO: Chinese zero-dollar tours return to Thailand

Thailand’s tourism industry has long relied on Chinese visitors, and Thailand could welcome at least 25 million foreign tourists in 2023, with a solid 5 million from China alone. However, this promising recovery has triggered concerns over the return of so-called “zero-dollar tours”, which are known for their unusually low prices, pre-paid budget accommodation and tours, and little money going to Thai tourism businesses.

While these tours have been around for years, they have become particularly problematic over the last decade, causing many issues for the Thailand’s tourism industry and its reputation.

These tours are named as such because their package prices start at below cost. Some local tour operators offer these tours to Chinese tourists, seeking to earn a profit by sending groups to local Thai agencies without paying any tour fees. The tourists are then forced to visit places and spend their money on goods and services at a higher price than the market rate, often Chinese owned.

In the worst-case scenario, tourists could be left behind without notice if operators are unable to make a profit or if tourists refuse to spend money or visit scheduled destinations. This scenario occurred many times before the pandemic, with tourists seeking help from the authorities. There were also reports of tourists even being assaulted by their tour guides for not wanting to go on the lucrative price-gouging tours.

All in all, the hapless tourists end up spending more than they expected and have a poor experience of Thailand along the way.

Similarly, unwanted “kickback tours” are when Thai agencies pay a fee per person to Chinese tour operators in exchange for a commitment to send large groups to them, sometimes a commission of 50% or more is paid.

Local tour operators earn a profit by taking tourists to visit pre-arranged shops or attractions. This method is akin to buying a “head count” from Chinese tour operators. In many cases, these operators are also involved with nominee businesses, referring to companies legally owned by Thai nationals that have foreign operators, including Chinese, funding them or directing them behind the scenes.

As an organised network, the profit for these tours tends to be limited to certain operators in a closed-loop supply chain. The impact harms Thailand’s tourism reputation, particularly when tourists encounter distorted fees or policies while travelling with a tour group escort who keeps them in “the loop”, including hotels, restaurants, shops and attractions.

Zero-dollar tours actually force tourists to pay a higher price during the trip, while the quality of products and services are mostly sub-standard, which can, again, create a negative impression of Thailand’s tourism industry.

In some cases, these tour operators also hired Chinese nationals as their tour guides to save on costs. This practice is illegal as the tour guide is a protected occupation under labour law reserved solely for Thai nationals.

As a result, a significant amount of money flowed out of Thailand, with the government was unable to collect as much tax revenue as it should have. These tours and other illegal activities have caused many issues for the country’s tourism industry, particularly in terms of reputation. The Thai government has made efforts to crack down on these tours, but the problem persists.

These tours remain a concern for local Thai operators, who fear these tours will lead to even larger systematic crimes. Many operators are worried shady businesses will return and have a greater impact, with even larger systematic crimes, which the Tourism Authority of Thailand (TAT) has dubbed “closed-circuit tours.”

A closed-circuit tour is run exclusively among a network served by specific nationalities, with more systematic management and working divisions. For example, tour agencies can take groups to eat at their own restaurants and shop at stores run by operators of the same nationality

Since Thailand reopened to tourists last year, related authorities are starting to receive complaints regarding “irregular” tours, including zero-dollar tours.

In 2016, the Thai government imposed regulations to crack down on these types of tours. These measures included imposing a minimum price for tour fees of at least 1,000 baht per person per day and an optional tour of no more than 3,000 baht per trip to prevent overcharging. These measures helped Thailand earn about 10 billion baht more in revenue from tax collection in 2017 than the previous year. Now Thailand’s tourism officials plan to sign an MoU with China’s Ministry of Culture and Tourism to address these issues on a long-term basis.

The department has already compiled a list of 189 legal Thai operators who partnered with Chinese companies.

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