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Writing on the Wall for Phuket Tourism
By Chutima Sidasathian and Alan Morison Wednesday, May 27, 2015
PHUKET: The writing is on the wall for the Phuket tourist industry and it was never more clearly spelled out than on the sign in the office at a company raided today by officials.
What's killing Phuket are the special commissions and the underhand deals that oblige tour companies to go where the package deals ''force'' them to go.
The word used in the sign is the Thai word for compulsion, or ''force.''
Free to do what you like on Phuket?
Not if you are a package tourist, the type of tourist replacing the independent travellers because of lack of sensible strategies on Phuket and in Thailand - and little enforcement.
The sign on the column in the Phuket City reads:
Group Code ZX, XS, HB
Program: Have to go to Srisoonthorn Temple
***If you don't follow, 5000 baht fine
Have to force eating at Paragon one time
Force a spa at Siam Spa
At Phang Nga, have to use the boat (telephone number)
Not allowed to top up with petrol in Phang Nga
Go to Phi Phi having free meal all day
Starting May 1, have to take to Aphrodite.
Take to Siam Spa.
If a guide doesn't take them, they will be fined.
THE raid conducted today on a well-known brand in the bypass road and other lesser known brands elsewhere in Phuket City produced no surprises.
But a journalist back at the Phuketwan office happened to read the sign in photographs taken at the Phuket City tour agency.
So, as they say when a sporting event is found to be as corrupt as some Fifa officials, ''the fix is in.''
Phuket has more problems than it needs.
As Thailand's top holiday destination, it could still be saved.
But if the shonky deals that are now being undertaken are allowed to continue, it's game over for Phuket.
Wake up, Thailand. Your wealth is being redistributed.
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Comments
Comments have been disabled for this article.
That is a pretty big sign really difficult to miss.
Perhaps the officials did not react to it because they consider it to be business as usual.
HB is the airline code for Asia Atlantic Airlines. A 2y old Thai airline operating 2 B767-300ER planes, both over 23y old.
The other 2 I can't decipher since they come up as Air Georgian and Sita airlines (Belgium). Could be a tour operator code.
Posted by
Herbert
on
May 27, 2015 21:37
No hope. It's worse than we (Non-Thais language speakers) thought. Its firmly ingrained. Terminal in fact.
Posted by
Elephants Gerald
on
May 27, 2015 21:47
Tourism and Sports Authority of Thailand, the Department of Business Development, Ministry of Commerce and Department of Tourism do not look in the right direction or they are blind but definitely something is wrong in their investigations to crack down illegal businesses in the tourism industry in Phuket, Phang-Nga and Krabi Provinces.
Posted by
Whistle-Blower
on
May 27, 2015 22:11
Still the tour counters big problem, companies negotiate a 30 to 40% commission which is official with a contract. Then the individual sellers on the tour counters want 10% minimum commission under the table.
So breakdown of a day trip a tourist pays for
Cost of trip 3000 baht
Tour desk commission 1200 baht
Seller commission 300 baht
Cost of trip 1000 to 1200 baht
Profit for tour operator 300 to 500 baht
No wonder costs get cut on safety and quality but very difficult for the quality companies to deal with as the cheaper companies who don't care about safety and quality pay better underhand payments to the sellers to sell there tours
Posted by
Michael
on
May 27, 2015 22:17
It's nothing wrong with package travel itself - many customers prefer it; moreover in Europe and other countries package travel provides special financial security for customers , that should not be overlooked.
What's wrong is with the practices as described above.
Some of them falls under anti-competition laws, some under consumer protection, some may under general law of obligations and geberal tourism business regulation that is already in place.
For some of the mentioned I do not see real problems.
So, if there is a will , it can be solved easily.
Even fir independent travel, good advance planning and booking is still in place :
e.g. I, when planning some trips, try to Poland and book everything in advance : it is a complete myth that it better to decide what tours etc. you're taking when you are on-site -
first, you will spend your precious, expensive holiday time on research - instead of doing it before arrival,
second, it is very likely, that you will act on incomplete information - asking nearby tour agency about tours, or worse someone like taxi driver , without real understanding details where you are going , what standard is available there etc., is irrational buyer behaviour
lastly, good holidays should come with certain degree of intensity , and positive feeling is created to big extent by diversity of activities - if you will forget at the last day what you did on the first day, then holidays were really good! For that, you need plan your time - to fit all activities - which may go according to certain schedule , and if not preplanned , then you simply can miss something integrating because of conflicting schedules . Also , it allows to take steps to fit as much as you wish and can afford activities of interest, and take at early stage proper measures , like chosing proper transport for some segments, pre-arranging that to avoid wasting time for looking for a taxi etc.
Also biking in advance often give you better opportunity fir bargaining,,due diligence of operators, besides saving time on that on arrival.
Then I put everything in Excel table , adding expenses - not only air & accomodation costs , but also everything else. I often ask menus from restaurants even not fancy ones - nowadays they all can make a pic with a phone and send it to you - then you can plan where you are eating, at least to make short list, and definitely plan your bdg.
It all takes in total on average 15-20 hours of preparation for one trip.
Those who want spend one or two hours on that they go for package travel.
I usually ask many many question to the hotel before I arrive, exploiting to the full extent concierge or guest relations , or making arrangement about picnic lunch box content well in advance, not only about food, but that they don't forget to put in salt & pepper , and whether fresh orange is available for it etc., e.g. when you are going to Angor Wat/Tom tour.
On those occasions when I failed to research well and plan, this never plays well:
e.g. only to arrive Marshall Islands (to get there it's not easy - you have to take plane from Guam, but to get to Guam you first have to fly e.g. to Tokyo) on Friday, to discover that main preferred activities either not available on Sa.,Su. , or have to booked a day in advance , like e.g. going with pirogue around atoll etc., and being booked to other island for Mo.-Tu., and leaving back on We.- you simply lack any space for manouvre , and you left to wonder around Majuro atoll watching relaxed mimics of people chewing betel nut.
Same with urban destinations.
But people who travel on package holiday they got everything preplanned - and that is in the end not bad, you just consume that product in hedonistic way, saving your efforts and time at home.
Posted by
Sue
on
May 27, 2015 22:38
Michael ,
what is the price structure for the tours , say, in Malaysia , UK or Florida?
I know for consumer goods, not really fast-moving, like cosmetics , skin care and fragrances , that the price structure is rather similar to what you presented between manufacturer's price and retail price , and include whole seller and marketing company, actually that total markup from manufacturer price can reach 500-1000% for premium brands .
And similar price structure to foodstuff in supermarket .
With that I mean if for goods such price structure is Ok, then it is Ok also for services ,that are distributed via few layers, and it simply should be acknowledged. Marketing expenses in all above cases mostly are higher than manufacturer's price , it is a reality of this world .
Posted by
Sue
on
May 28, 2015 01:21
Its so entrenched there now advertising their corrupt practices
Posted by
slickmelb
on
May 28, 2015 02:25
The FIX is over. Currently in Perth Australia. Just read an article on where people are travelling overseas. Phuket is down 20% for last year and decreasing again this year because of all the ongoing negative issues. We know what these are.
Posted by
expat tiger
on
May 28, 2015 03:32
Sue. Wow Sue you sound super efficient and organised! You put everything about your holiday in Excel! You should be running the tour companies.
Posted by
shadowcat
on
May 28, 2015 04:41
Shadowcat,
You are not aware Sue owns Sueileaks, Suipedia Suotiff and Soooooogle?
Posted by
MoW
on
May 28, 2015 06:58
Screw the tourists, the tour operators know no difference
Posted by
Paul
on
May 29, 2015 08:07
I must be missing something. Is it morally wrong or illegal for an international tour company to enter into arrangements with restaurants, transport companies, tour guides and the operators of sites of interest so that they collectively make money from tourists. Nothing I see above falls under anti competition laws. From what I've seen it happens all over the world. I'm not trying to be smart I just seriously don't understand the gist of this article. I thought this was the attraction of the package tour. Pre-arranged and low cost. In the transport business I work in the contracts we have with some suppliers state that if we don't meet our obligations there are financial penalties (fines) that will be applied. We also don't fuel at some remote locations because the price is so high or if we commit to refueling at another location on a regular basis we get a discount. Is that different from this. Personally I don't like package tours and being herded around like cattle but that's a consumer choice some are happy to make.
Posted by
pete59
on
May 30, 2015 08:25
Editor Comment:
Phuket's future depends on maintaining a broad appeal to a number of markets. There are already some obvious results of cartels on the island - the high fares of tuk-tuks and taxis is the most obvious one. Commissions paid by some venues amount to 60 percent. The more the tour operators combine because of bribes - there is no other appropriate word - the more corrupt and expensive Phuket becomes. Tourists are the ones who pay for all these free market distortions.
Ed fair enough, good response. i suppose if there is nothing left but bulk package tours for tourists small operators get frozen out and cartels run everything and then tourists start dropping off dramatically once freedom of choice is taken out of the equation.
Posted by
pete59
on
May 30, 2015 11:23
Tour operators should team up and build an online fast booking site without the middle men. Just need to advertise at the airport the website. Or on sites like here. Google ad words may help also.
The commissions are fat enough to slice them out.
Posted by
Lena
on
May 30, 2015 15:59
Never booked a complete package deal except when on holiday in Africa which we knew nothing about and appreciated the agents service
normally book a package deal that includes airfares, transfers, accommodation and breakfast which travel agents can give a better price on than booking it yourself usually.
Tours and eating out you arrange yourself once you arrive and see what's available, plenty of competition at most tourist destination's but most new travellers do not know this and believe what booking agent's tell them
Posted by
peter allen
on
May 30, 2015 17:54
Lena,
have you considered that global/popular booking sites charge hefty commissions because of your reach of customers?
There are hundreds booking sites for Thailand hotels,that you probably never heard about, that obviously charges less , than Sawasdee and so on, so what?
One may try , of course, to make a cooperative , like almost non-profit, and try fortune to turn it into preferential booking site for Thai market, good luck to them! Yes, there are examples of popular Thailand originated booking sites, but I do doubt that such cooperative will succeed, mainly for management issues.
And about Google Adwords - how often you click on Google advertising? I did it probably twice during last 5 years. although other people can act in this respect differently.
Posted by
Sue
on
May 30, 2015 19:55
Hello Sue,
thinking about tours. Tours in Phuket. Ok, let's check: www.phuket-tours.com still available. Mmh. Then ads, like: Go local, order direct, no middle man, no fat commission, no tour counter waiting/harassment.
Safe money and do quality tours.
Pay by paypal, creditcard or 7eleven or cash.
Localize the adwords to Greater Phuket with some nice keywords, or looking for worldwide to do on Phuket. Do a billboard at the airport or maybe two or three, pester the websites like phuketwan or others. Facebook, you heard?
Could really make a difference.
Problem will be, that the commission people may have some best price clause against you. Then open a second shop, one for the commissions, one for the cheaper, direct line to your customers.
Posted by
Lena
on
May 30, 2015 22:43
Sue,
i went onto Gooogle today and searched 'Sooooogle'. They are so scared of the opposition they have blocked your site or the search required encryption software and became confused.
I know it was ok a few days ago because it provided me with an alternative definition for 'kicking tools'.
Posted by
MoW
on
May 31, 2015 04:33
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That is a pretty big sign really difficult to miss.
Perhaps the officials did not react to it because they consider it to be business as usual.
HB is the airline code for Asia Atlantic Airlines. A 2y old Thai airline operating 2 B767-300ER planes, both over 23y old.
The other 2 I can't decipher since they come up as Air Georgian and Sita airlines (Belgium). Could be a tour operator code.
Posted by Herbert on May 27, 2015 21:37