PHUKET: On Jul 5 this year, as the world was transfixed on a cave in northern Thailand where a junior football team was trapped, a tragedy was unfolding in its southern waters.

A boat carrying 89 tourists and 12 crew members capsized in a raging storm before sinking off the popular resort island Phuket. The vessel's final journey ended at the bottom of the Andaman Sea, along with 47 lives trapped inside the cabins – parents, children and elderly travellers, all tourists from China.



The capsize of Phoenix PC Diving was one of the worst maritime disasters in Thai history and its consequences have been far-reaching, particularly on the country's tourism sector.

Following the incident, the Ministry of Tourism and Sports reported a significant drop in the number of Chinese tourists visiting Thailand – by 12 per cent in August from the same period last year, 15 per cent in September and 19.8 per cent in October.

Arrivals of Chinese tourists to Thailand have shrunk since a tourist boat carrying 101 passengers sank off the popular resort island in July 2018, killing 47 Chinese tourists. (Photo: Pichayada Promchertchoo)



Last month, its minister Weerasak Kowsurat said the slowdown in arrivals from mainland China had eased but tour operators in Phuket are still worried by their prolonged absence.

Big Chinese group tours - once a common sight in Phuket - have become a rarity on the island, which welcomed some 2 million Chinese travellers last year alone.

“We’ve lost more than half of potential Chinese clients from group tours,” said Bussayarin Wuttinonchai, general manager of a leading tour company in Phuket, Nikorn Marine.

Seventy per cent of its clientele was once Chinese tourists. Now, they only account for 40 per cent of the total customers. The lack of Chinese customers has meant that Nikorn Marine now only deploys two to three tourist boats per day since the incident, compared with 10 previously.

“Some entrepreneurs had to sell their boats and vans to downsize their business. The situation is getting better now but there are still not so many Chinese group tours,” Bussayarin added.

Thai rescue personnel carry a body bag bearing the recovered body of a passenger from a capsized tourist boat at Chalong pier in Phuket on July 6, 2018. (Photo: AFP/Mohd Rasfan)

Phoenix PC Diving was operated by TC Blue Dream, a Thai firm established and registered in 2016 by a Thai woman, Woralak Ruekchaikan, 26. She is married to a Chinese national and owns more than 90 per cent of the company’s shares.

Following the tragedy, Woralak was arrested and charged with recklessly causing death and injury. Her husband, whom authorities suspect of using Thai nominees to operate businesses in Thailand, allegedly fled the country to China.

A HURTFUL REMARK

Although the absence of Chinese group tours in Thailand followed the boat disaster, local entrepreneurs believe its impact could have been less damaging had the incident been managed better.

“The main problem is tourists’ confidence in our maritime safety, but there were also other factors that worsened the situation,” said Kongsak Khoopongsakorn, president of the Thai Hotel Association’s southern division.

Chinese tourists made up about 25 per cent of the total international arrivals to Phuket in 2017 but the number dropped sharply after a tourist boat sank off the island in July 2018, killing 47 Chinese tourists. (Photo: Pichayada Promchertchoo)

One of the factors, he added, was a controversial remark soon after the incident by Deputy Prime Minister Prawit Wongsuwan, who blamed Chinese tour operators for the 47 casualties.

“Some Chinese come to Thailand and use Thai nominees. They don’t listen to our meteorological department and brought the ship out,” Prawit told reporters on Jul 9.

When asked how the government would restore Chinese tourists’ confidence, he said:

Chinese people did this to Chinese tourists themselves. They did this to their own ship, disobeying our instructions. How are we supposed to restore their tourists’ confidence? This is their own problem.

It did not take long for the remark to go viral on Chinese social media and trigger widespread anti-Thailand sentiment among Chinese travellers.

In Phuket, local entrepreneurs in the tourism sector have felt the impact between July and October, a period that was supposed to be the high season for visitor arrivals from China.

“The impact was so huge, tourists didn’t return," said Kongsak.

Chartered flights from China were cancelled. The number of Chinese group tours dropped by 50-70 per cent in September, October and November from the same period last year."

Chinese travellers made up the biggest tourism market in Thailand in 2017.

Data from the Tourism and Sports Ministry showed Thailand welcomed about 35 million foreign tourists last year and more than 9 million of them – or about 28 per cent – came from mainland China.

The group was also the biggest spender, injecting US$16 billion into the Thai economy, compared to US$2.37 billion from American tourists and US$2.33 billion from UK travellers.

“Europeans are our biggest clients in high seasons but Chinese visitors help fill up our low season,” Kongsak said.

We can’t survive without Chinese tourists.

A TRADE WAR

The drop in Chinese tourists visiting Thailand followed hard on the heels of the boat tragedy but according to the Phuket Tourist Association, another factor that has contributed to the fall in Chinese arrivals is the trade dispute between Beijing and Washington.

“The overall economy of China has been pulled down ... (and as a result) fewer Chinese people travel overseas,” said Phuket Tourist Association president Bhummikitti Ruktaengam.

Tourists take photos on the Patong beach in Phuket, Thailand. (Photo: Pichayada Promchertchoo)

​​​​​​​

Since July, US President Donald Trump has imposed US$250 billion worth of Chinese imports to pressure China into improving its trade and intellectual property practices. In retaliation, China has responded with import tariffs on US$110 billion worth of US goods.

After months into the trade dispute, China recorded its weakest quarterly growth rate since the global financial crisis, with a 6.5 per cent year-on-year growth in the third quarter of 2018.

“Since September, we’ve noticed that Chinese have really slowed down their overseas travels,” Bhummikitti said.

Months of threats and unsuccessful talks between Washington and Beijing have led President Trump and his Chinese counterpart Xi Jinping to agree on a 90-day truce on new tariffs at the G20 summit in Argentina earlier this month.

Chinese tourists arrive at Chalong Pier in Phuket. (Photo: Pichayada Promchertchoo)

In Phuket, entrepreneurs in the tourism sector remain hopeful more Chinese tourists will return to Thailand for the Lunar New Year holidays next year.

However, while a large number of Chinese group tours have disappeared from the resort island, Bhummikitti said there has been a steady increase in arrivals of frequent individual travellers (FITs) from China.

Unlike what he described as “the group series”, these travellers have usually visited Thailand before and thus opt for arranging their own trip – from booking flights to sourcing hotels and planning activities. They also tend to travel in smaller groups and have a more flexible itinerary.

“While the group series have fixed programmes that always include sea travel, FITs can opt for other activities elsewhere,” Bhummikitti said.

In Phuket, he added, the FIT market has grown by 10-15 per cent from the previous year.

“In terms of volume, they may not be able to beat the group series. But when it comes to economic value, they contribute more to the local economy,” Bhummikitti said.

Travellers in this group often come from Beijing, Shanghai, Kunming and Chengdu. So we’re campaigning for more visitors from this group, with roadshows that focus more on upmarket travel.

Despite the boat tragedy, the Thai tourism and sports minister said last month the mainland China market grew by 10 per cent in the first ten months of 2018. The Hong Kong and Taiwan markets, he added, also expanded in the same period, with the former growing by 25 per cent and the latter by 20 per cent.

SAFETY IN THAI MARINE TOURISM

Following the capsize of the Phoenix PC Diving, Thai authorities have beefed up security measures related to tourist boats and tour companies to ensure more safety in marine tourism.

At the biggest dock in Phuket, Chalong Pier, tourist police, army officers and officials from the Thai Marine Department conduct daily inspection of every tourist boat before they depart.

They check if the number of passengers is suitable for the boat’s capacity, examine whether captains and boat mechanics have the licence required, and make sure the vessel’s registration documents are up to date.

Chalong Pier is the biggest dock in Phuket, servicing about 2,000 tourists every day. (Photo: Pichayada Promchertchoo)

“Two common problems we’ve found are expired captain licences and the number of passengers exceeding the boat’s capacity,” said Marine Department official Peerapong Sae Lee.

He and two other officials from the department have to inspect 70 to 80 boats per day, not to mention some 2,000 passengers they have to count and various documents they have to go through. The inspection, he said, usually takes no more than five minutes per boat.

Given the large volume of tourists, however, the limited number of Thai authorities at the pier could raise concern about the efficiency of their inspection.

“Right now, not everything is 100 per cent ready," said Pol Maj Akachai Siri from Phuket Tourist Police.

"We’re still improving our system to better manage activities at the pier. Ideally, we want to make every pier here operate like an airport, with check-in counters, boarding passes and a safety demonstration before any departure."

The police inspector told Channel NewsAsia authorities will use Phuket’s second largest dock – privately-run Ao Por Pier – as a role model for future pier management. Before entering the pier, he said, tourists will be given a wristband with a barcode they need for embarkation.

“When they scan the barcode at the gate, the cameras will photograph them," Pol Maj Akachai said.

"This means we have the identities of all passengers. They can also use the same barcode to register their name, address and contact details with their mobile phone to enjoy extra insurance benefits."

If this system is up and running at every pier, it’d be sufficient to only have one official at each location.

However, during a visit to Ao Por Pier, Channel NewsAsia discovered the wristbands are no longer used. According to its manager Chaiya Rapuepol, the system has been put on hold since Dec 1 because of a lack of support from the government.

“We want the use of barcoded wristbands to be adopted at every pier in Phuket. But once we had the system up and running, the government did not pay attention to our work or have done anything to implement it elsewhere,” Chaiya told Channel NewsAsia.

“As a result, we've decided to stop using the wristbands until the government realises their significance in maritime safety.”