Zero-dollar tours are crippling Thailand’s tourism recovery. Up to 50% of Chinese tour group arrivals could be victims of these extortion rackets, spreading negative views of Thailand. Urgent government action is needed to tackle the issue linked to powerful groups in China and other markets.

The cancer of zero-dollar tours has descended in force upon Thailand’s recovering foreign tourism industry. Indeed, the scale of the racketeering and damage being done at this time is unprecedented. There are now real fears that up to 50% of Chinese group arrivals are on low-budget tours and are facing extortion in the from of orchestrated price gouging. In effect, the fear is that this will lead to further negative publicity about Thailand in the Chinese market. This was detected by shocked Thai officials in March 2023. Similarly, the same thing is happening with the Indian and Russian tourist markets and even with some visitors from Eastern European countries. A top travel industry figure this week called on the government to seek urgent help from Beijing. He warned that the Chinese problem is linked to influential grey capital groups in the Communist country operating with impunity.

Minister of Tourism and Sports Sermsak Pongpanich ordered six government agencies into action, in recent weeks, against zero-dollar tours from China, India, and Russia. In short, 10 firms were ordered closed, while a further 10 are being probed. This was out of 30 firms reviewed. (Source: Ministry of Tourism and Sports, Tourism Council of Thailand and Association of Thai Travel Agents)

With Thailand gunning for over 36 million foreign tourists in 2024, fears were raised this week about the notorious zero-dollar tour phenomenon.

One industry insider described the situation as the worst he had ever seen in the industry.

The recovery of the tourism sector has been marred by concerns about the average spend per tourist. 

Conflict over how much each incoming tourist spends with different data from government tourism agencies and the Bank of Thailand in its reports

Thai tourism agencies claim it is between ฿45,000 – ฿50,000 per visitor, while Bank of Thailand data in its reports comes in at ฿33,903.

Certainly, one explanation is the expansion of zero-dollar tours to unprecedented levels. These are tourism excursions sold to visitors in foreign countries, particularly in China, at deceptively low prices.

In turn, the visitors arrive in Thailand and are subsequently coerced into spending money on ancillary products and services from specified sellers.

In short, this is how the mafia groups organise the trade and subsequently make their money.

And indeed they do. To such an extent that as tourism begins to pick up in Thailand, the practice has spread to the Russian and Indian markets. At length, in Phuket earlier this year there were reports of such tours being organised daily from Eastern Europe.

However, the income earned is not by Thai firms or traders, it is the mafia barons who quickly launder it out of Thailand. Neither are taxes paid.

Minister of Tourism and Sports Sermsak Pongpanich set out in recent weeks to tackle the issue. However, industry bodies warn that massive action is required

Certainly, Minister of Tourism and Sports Sermsak Pongpanich this week tackled the issue. Six agencies responded to the crisis. These included the Tourism Police, Immigration Bureau, Tourism Ministry, the Office of the Permanent Secretary for Tourism, the Business Development Administration, and the Department of Special Investigation (DSI).

Following this, ten firms were closed immediately. It was reported that 30 firms in total were to be examined. The status of ten further firms is considered dubious and is being pursued.

Nonetheless, according to Surawat Akaraworamat, the Vice President of the Tourism Council of Thailand, this response is only a band-aid. In particular, with regard to China, he says the same groups and grey capital are now operating in expanded modes.

Furthermore, he hinted that these activities, which use Thai nominees and small-scale middlemen, are being masterminded by influential people in China. In short, he urged the government to get on the hotline to Beijing.

Zero-dollar tours are mafia-run extortion rackets. Tourist groups come under the control and sway of handlers gouging them out of money often with threats

Similarly, fears like this are also being expressed about India, Russia, and Eastern Europe. These zero-dollar tour operations are massive extortion rackets.

Unquestionably, the end result is that millions of foreign tourists return home with an extraordinarily negative view of Thailand. Certainly, the experience has been like this with the Chinese market.

The result for the victim is a holiday from hell. They often return home with their bank accounts ravaged and traumatised by the experience.

In turn, they blame Thailand and at the same time, are encouraged to think so by their tour guides.

Vitriol and ill feeling towards Thailand expressed in a spontaneous outpouring online in China in March 2023.  Viral campaign shocked senior Thai officials

For instance, in March 2023, Thai officials were stunned by the vitriol and ill feeling with which Thailand was denounced by Chinese netizens online. A spontaneous campaign erupted on network sites such as Weibo.

The incident caused the Thai Embassy in Beijing to act in response.  Certainly, the Ministry of Tourism and Sports officials were in contact with their counterparts in China. However, it is very difficult to counteract such feelings driven, at heart, by the real experience of Chinese visitors

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Unquestionably, it damaged Thailand’s reputation. There were reports of widespread corruption, intimidation, and extortion in Thailand.

This is believed to stem from the experience of millions of Chinese visitors who are effectively extorted by handlers while being brought to visit the country.

Large number of Chinese tourists come as members of group tours. As many as 50% of these may be zero-dollar tour groups ferrying victims to Thailand

Tourism industry executives estimate that up to 50% of all Chinese tour groups are now zero-dollar tour victims.

Mr Surawat admitted he is perplexed that this is not being dealt with more earnestly by the government.

Furthermore, he argued that the firms being targeted are small fry. The real players have many alternatives and do not see their operations disrupted.

Meanwhile, Thai officials are warning that Thai nominees acting as fronts or proxies for zero-dollar tour operators will face prosecution. Under Thailand’s Foreign Business Act, the role of tour guide or operator is a restricted business.

At the same time, there is added concern that Thailand’s laws are still not designed to deal with the problem.

On one hand, firms can be closed; on the other, the Supreme Court recently dismissed a zero-dollar tour case brought before it. It ruled that the tourists had availed of an attractive commercial offer. In essence, such services were in demand.

Case before the Supreme Court linked with a previous 2022 crackdown on zero-dollar tours thrown out by judges. It affirmed a genuine commercial demand

It followed a sharp crackdown in 2022 in which buses were seized and zero group tour executives were arrested.

This highlights the insidious nature of the problem which makes it so dangerous.

In the meantime, the Department of Tourism is working to counter the menace. It is coordinating the six government agencies involved. Director-General Jaturon Phakdeewanit said the crackdown has been underway for six months.

Nonetheless, so far only 10 firms have had their licences withdrawn. This comes despite a threat from Mr Jatuporn that both foreigners and Thais face prison terms for contravening the Foreign Business Act.

Undoubtedly, also, the government’s permanent visa-free corridor with China and concessions to Indian and Russian tourists are making life easier for the racketeers in the countries of origin.

Situation was never worse while fears are growing that Thailand’s top markets may become blighted after burned tourists return home and spread the word

Finally, the President of the Association of Thai Travel Agents says his body is set to have urgent talks this week with the Minister of Tourism and Sports Mr Sermsak.

However, he conceded the situation on the ground has never been worse.

‘This is the worst operating environment I’ve encountered in my entire life working in the tour business,’ he explained. Certainly, he also differentiated these tour packages from the last-minute promotional fares sold by his members. These are deals that are governed by time and sold only at the last minute to outbound travellers. In brief, they are good deals for the punter without any downside.

‘This is the worst operating environment I’ve encountered in my entire life working in the tour business,’ declared Mr Sisdivachr.

This week, he also raised the matter with Prime Minister Srettha Thavisin.

Undoubtedly, there are real fears that these negative activities will blight future market demand in these key target countries. Mr Sisdivachr insisted that they portray the kingdom in a bad light.

Thailand is spoken of by these ill-fated tourists as an unsafe place, a country racked by corruption and extortion.

Handful of arrests and a dozen closures will not fix the problem, says top travel industry official. Time is running out and urgent action is required

Meanwhile, these low-priced tour offers are costing legitimate operators market share and business.

‘The longer this kind of business persists, the worse the Thai tourism industry will become,’ the ATTA boss pointed out. In addition, he said these operators pay no tax and benefit no business concerns in the kingdom.

Significantly, Mr. Sisdivachr urged that the government and the private sector communicate with officials in China.

Unfortunately for Thailand, this fits in with public security warnings and briefings given by Beijing security officials regarding Thailand. In addition, it chimes with the Communist Party’s increasingly nationalist and xenophobic sentiment.

Nevertheless, Mr Sisdivachr insisted that a handful of arrests and business closures were simply insufficient.

Authorities in Thailand lack the power to deal with the wider criminal incubus in China and similar rackets in India and Russia.

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