Hotels in Pattaya and other Thai resorts are reporting that the number of Chinese tourists has dropped by 20 percent in the last month. This is because the Thai and Chinese tourism authorities are jointly cracking down on zero-dollar tourism and the illegal use of Thai nominees to avoid foreign ownership laws of businesses.
Under the scams, tour operators offer very low prices to wannabe Chinese tourists who find out – later on – that there are many hidden costs once they arrive in Thailand. Payment is made in China before departure which means that Chinese companies or their Thai partners are the principal beneficiaries rather than the Thai economy as a whole. Thai nominees are used to evade the restrictions on foreign ownership which leads to both defrauding tourists and avoiding the payment of authorized taxes.
Acting on instructions from Thai premier Prayut Chan-o-cha, anti-money laundering officials have been seizing coaches from transport companies allegedly involved in scams and cash amounting to five billion baht from a variety of businesses suspected of defrauding the tax authorities. Meanwhile, Thai police have been active in rounding up foreigners working without a relevant work permit, for example tour guides, and investigating companies illegally using nominees to circumvent existing legislation.
In Pattaya, locals have noticed that there seem to be fewer buses parked on main roads at night, whilst mega-stores have claimed that their takings from Chinese tourists have been shrinking of late. One restaurant in North Pattaya, which specializes in providing noodle dishes for Chinese vacationers, admitted profits were down of late. The Thai-Chinese owner said, “I’m paid in advance by the tour sponsors, who have Chinese mainland links, and the customers eat for free. I used to serve 600 meals in the evening but now the total is barely 400.”
Zero sum holidays have also given rise to complaints from the tourists themselves. They have complained of being forced to shop in big groups at certain stores identified by the coach driver. Some Chinese families with children have objected to being herded altogether into sex shows and forced to pay admission even for babes-in-arms. The Chinese embassy in Bangkok has several times complained about the treatment of its nationals on holiday and raised concerns about overall tourist safety both in Pattaya and on Koh Larn.
However, the fall in overall numbers is likely temporary. Thai tourism minister Kobkarn Wattanavrangkul said, “Authorities have been cracking down on illegal operators and have also seized properties and licences in order to stop bad behaviour.” But she added that overall numbers from China have been rising annually by around 20 percent. Tourist Police confirmed the belief that numbers will rise again once the shady operators and tour companies are closed down.
Chinese tourism officials voiced support for the crackdown on zero sum holidays stating that the result will be more quality tour programmes of affordable prices and fewer complaints about bad treatment. In 2015 Thailand welcomed nearly eight million Chinese who injected revenue of 370 billion baht. However, much of this cash never found its way into government coffers. Most commentators expect Chinese arrivals in 2016 to surpass 10 million. To date, less than two percent of Chinese nationals have visited Thailand. However, surveys suggest that 50 percent would very much like to come.