Writings

Ecotourism or Overtourism? Community and Outsider Influences on Yao Noi Island (Ko Yao Noi), Thailand. 

Noah Shepherd and Stephen Axon

Department of Life and Environmental Sciences, Bournemouth University

Abstract 

Thailand’s tourism growth has been a financial success story for the country, with nearly 40M visitors, annually, contributing to 18% of GDP. This growth has brought problems of overtourism. The study focusses on a case history of a small island in south Thailand, Ko Yao Noi, promoted as an ecotourism destination, and looks at the relationship between the local Muslim community, outside investors, tourist typography and the Thai government. Qualitative research consisted of semi-structured interviews with the local community, community projects, local businesses, outside investors and industry experts. The research adds to previous quantitative studies into sustainability on the island and asks how key players have shaped tourism development. 

Keywords: Ecotourism, sustainable tourism development, island tourism, overtourism, carrying capacity, Ko Yao Noi, Thailand tourism, tourist typology. 

1. Introduction 

Thailand’s tourism arrivals have grown from 9.5M in 2000 to 39M in 2019 (Fakfare et al., 2022). An increase in regional low-cost airlines following deregulation in 2003 (Law et al., 2022), improved domestic transportation infrastructure, growing accommodation options and visa-free travel (Immigration Bureau, 2024) for many nationalities have helped fuel this growth. Most tourists visit popular resort areas and cities, and smaller secondary destinations have seen increased numbers of visitors. The term ‘overtourism’ has become a common theme in the Thai media and tourism business circles (Hess, 2019). Researching the impact of outsiders on tourism development on a small remote tropical island like Ko Yao Noi (KYN) is crucial to understanding and mitigating the negative consequences of potential overtourism.  

Remote tropical islands are popular tourist destinations (Sharpley, 2012), with many experiencing the pressures of overtourism. (Butler and Dodds, 2022). This research examines the relationship between external influences and the growth of tourism in south Thailand using a case study of a small island, KYN in Phang Nga Bay, Gulf of Phuket, south Thailand. The role of outsiders, the local community and government in shaping the destination of these communities is studied. Previous studies of KYN and the surrounding area have mainly focussed on community-based tourism (CBT) (Jitpakdee and Thapa, 2012; Walter and Reimer, 2011; Untong and Phaokreung, 2021; Hunt and Thaveeseng, 2024). Ecotourism is a term that has been widely used and KYN is promoted as an island of ecotourism by the Thai Government (TAT, 2024). Most research has been carried out based on domestic tourism for the Thai market. Little research has been published relating to the role of outsiders in tourism development on the island. The research will address the question: what is the role of outsiders in island tourism development, and have they contributed to overtourism? 

 The purpose of the research is to understand the consequences of island tourism development in Thailand, the role of outsiders in tourism growth and the relationship with the local community. Outsiders are important to tourism and a key driver of investment and development, but this may come at a price. Tourism revenues are extremely important to local communities and maximising income is a priority.  The study will examine potential strategies and policy recommendations for sustainable development of the island to maximise tourism revenues while maintaining cultural sensitivity. 

• Literature Review: Community-Based Tourism, Overtourism, and Outsiders

Since ‘ecotourism’ was first applied in 1983 (Ceballos-Lascurain, 1996), Hussain (2022) suggests it has become commonly mis-used and over-used within the travel business. A meta-analysis of 25 years of 470 ecotourism research articles concluded that the term ecotourism was used mainly for marketing purposes. Furthermore, many ecotourism development projects reviewed were focused on western ideals, showing a lack of understanding of local contexts (Wondirad, 2019). Chandrel and Mishra (2016) reviewed 42 commonly cited definitions from scholars and concluded that ecotourism should focus on several key points: (1) a quality nature-based experience, (2) educational interpretation when needed, to enhance the experience, (3) follow environmentally sustainable standards and practices, (4) conservation of the environment through contributions, (5) benefits to, and inclusion of the local community, (6) Respect to the local community, and (7) responsible marketing to consumers.  

In 2000, the United Nations (UN) Commission on Sustainable Development mandated The UN World Tourism Organization (WTO) and The United Nations Environment Programme (UNEP) to create activities for International Year of Ecotourism (Wood, 2002). Regionally, the Association of Southeast Asian Nations (ASEAN) created standards around CBT (ASEAN, 2007). Thailand has led the way with the Thai CBT Institute (CBT-I) aiming to ‘clarify and protect community rights’ with self-certifying programmes (Novelli et al., 2016).  A National Ecotourism Policy was initiated in 1996 by the Tourism Authority of Thailand (TAT) with the establishment of networks to disseminate information and coordinate activities (TAT, 1996).  The TAT’s main objectives for ecotourism were: “responsible travel in areas containing natural resources that possess endemic characteristics and cultural or historical resources that are integrated into the area’s ecological system” (TAT, 1997). Key pillars of focus included nature-based tourism, sustainable management, learning, and participation of the local community (Sangpikul, 2010).  

The Thailand Ecotourism and Adventure Travel Association (TEATA) was formed in 1997 to create standards for each industry sector. The policy was formulated by the Thailand Institute of Scientific and Technical Research (TISTR) and a National Ecotourism Plan (2002-6) was proclaimed (Trivedi et al., 2020). Thailand’s ecotourism policy covers all the key points above including banning travel to environmentally sensitive areas; development of an ecotourism code of conduct for all sectors; and a budgeted ecotourism plan at the district, provincial and regional levels (Thavarasuka, 2002). The last point is most relevant to KYN. The local government sub-district (Tambon) incorporates the term ‘ecotourism’ into its slogan as seen on signs and on the front page of its website: “Island of Ecotourism, managed according to the principles of good governance. People being at the centre of development, leading to a strong community” (Ko Yao Noi Sub District, 2024). 

The earliest tourists to KYN, in the late 1980s, were drifters(Cohen, 1973), people who ventured off the beaten track shunning conventional destinations. Lack of accommodation on the island was the limiting factor to tourism with the first bungalow ‘Sabai Corner’ geared towards international visitors opening in 1989, (SabaiCornerBungalows, 2024) which attracted backpackersand budget tourists. Adventurers(Kontogeorgopolus, 2023) in the 1990s, found their way to the island with specialist eco-tourism tours such as sailing, kayaking and camping in the Bay (Shepherd, 2002). Massecotourists (Pleumarom, 1993; Kontogeorgopoulus, 2003) stay at hotels on the island e.g. Six Senses, Paradise Ko Yao. Kontogeorgopoulus’ (2003a) study of western tourists in south Thailand suggested that the quest for authenticity differentiated backpacker and adventure travellers from mass ecotourists. Adventurers staying at local villages in KYN were studied by Sangpikul (2020). Guests visited the local market and took part in cooking classes. Sangpikul noted that well trained tour guides with local knowledge and nature interpretation skills differentiated ecotours from conventional tours, resulting in higher customer satisfaction. Mass tourists taking package tours (Sezgin and Yolal, 2012) remains a very small part of tourism on KYN, confined to the hotels. 

              King and Cela (2023) defined International Retirement Migrants as relatively affluent westerners or those living on a pension talking advantage of lower living costs than the west. Marginals, described by Howard (2008) work on a small salary, e.g. teaching English, and more recently as Digital Nomads (Jiwasiddi et al., 2024). A third group of employed expats work in higher paid management jobs (Tsai, 2018), e.g., within the hospitality industry on KYN. The final group are entrepreneurs running their own businesses within the guidelines of the Alien Business Act (1999) that limits the type of work that foreigners can undertake (Pintusornsri, 2022). Chubchuwong et al. (2015) studied 156 foreign residents in Thailand, including property owners, suggesting that they had become stakeholders as they felt more responsibility towards environmental sustainability. 

Demographically, 5.4% of Thailand’s population is classified as Sunni Muslim with KYN at 99% (Thailand National Statistics Office, 2024). From the 14th century Islam, in the Malay states to the south, have influenced the growth of the religion (Gilquin, 2002). Popular stories relate to Muslims escaping the war with Burma (1765-7) and finding refuge on KYN. Prayatsub and Tae (2022) suggest that the island was previously an army base, colonised in the early 20th century by Muslims from Thalang (Phuket) and Trang provinces. More recent Muslim revival and traditional teachings stem from Palang Ae (Ismail Romin), an immigrant from Kelantan State, Malaysia (Prayatsup and Tae, 2022) and have formed the basis for the Sufi group of Muslims on the island. The smaller Salafi group stems from Saudi Arabian influence (Wahabism), in the 21st Century (Prayatsub and Tae, 2022a). Awang et al. (2016) noted that most of the Muslims in south Thailand had an open attitude towards other religious beliefs. 

The Thai Volunteer Service Foundation initiated the first community-based tourism (CBT) project in 2002 (Hunt and Thaveeseng, 2024). Homestays for educational tourism were established, together with the Responsible Ecological Social Tours (REST) project in five locations nationwide, including KYN (Walter, 2009). In 1995, only 50 to 100 people visited the island every month, mainly Thais, staying in the half a dozen homestays on the island. By 2001, the island was seeing 5,000 visitors a year (Hunt and Thaveeseng, 2024). The KYN Ecotourism Club was established by residents and received a World Legacy Award from National Geographic Magazine for preserving the local environment and culture (National Geographic, 2024). In 2016, ASEAN granted a “Homestay Award” to five homestays in Thailand (ASEAN, 2016). Further awards from the TAT in 2002 and 2004 (Wichupankul, 2006) and Yahoo Travel Magazine listed KYN as one of the world’s most beautiful unspoiled islands, which promoted KYN to more international visitors (Witchayakawin, 2016). The requirements for skills to help educate visitors in environment, culture and livelihood was tackled by CBET projects creating an ecotourismcurriculum (Walter and Reimer, 2012).  Untong and Phaokrueng (2021) studied returns on CBT projects on the island and suggested that financially, all activities had a positive return on investment.  

Jitpakdee and Thapas (2012) noted that participation in decision-making in community programmes by locals was weak. This is likely because of the patron-client relationship between Thai leaders and followers, the Buddhist concept of barami or ‘moral strength’ which pervades in all religious groups, throughout Thai society (Persons, 2016). Wichupankul (2006) noted an unclear and undefined direction for the participation of the local community with an unwillingness to participate. Salman et al. (2024) reviewed 320 articles relating to multi-stakeholders in ecotourism and concluded that each destination had its own requirements and that there was often a lack of understanding of the requirements of the destination by all interested parties. They suggested that both government and private sectors needed to invest in local capacity building and infrastructure facilities for ecotourism sites.   

With respect to KYN, as more hotels, bungalows and homestays opened on the island, Walter (2009) claimed that the tourism boom was no longer in the control of the local community and that in many cases community members did not see the commercialisation and the growth of general tourism as negative, viewing ecotourism as a commodified experience.  During the Covid pandemic, a limited number of tourists on the island visited the island and the activities, and revenues of the CBT groups diminished. As of 2024, their activities have been stagnated (Thaicharoen et al., 2023). To revitalise their activity, Hunt and Thaveeseng (2024) suggest more focus on domestic tourism and extended stay tourists such as digital nomads.  

Tourism in Southeast Asia substantially supports the Sustainable Development Goals, notably poverty alleviation (UN, 2024; Trupp and Dolezal, 2020). Boonyasana and Chinnakum (2021) examined revenue flow in Thailand and concluded tourism contributes to poverty reduction and decreased inequality at aggregate levels; however, local-level research by Suriya (2011) revealed benefits are unevenly distributed, with the wealthiest households capturing most gains. The One Tambon One Product (OTOP) programme was introduced in 2001 to foster grassroots economic development by promoting local production and sales, especially among rural populations (FAO, 2022). While OTOP faced challenges in reaching its objectives initially, reinforced policy support and capacity-building measures in the 2010s enhanced rural incomes and economic inclusivity, as evidenced by increased earnings among participants, especially women, whose average additional income often surpassed the poverty line (Srisantisuk, 2015). The sustainability analysis of ecotourism on KYN carried out in 2009 showed that 75% of 178 families surveyed on KYN indirectly benefitted, with almost 50% earning direct income from ecotourism (Jitpakdee and Thapas, 2012).  

Nevertheless, financial benefits are undermined by “leakage” – the loss of tourism-generated revenue to outside actors or foreign businesses. Tourism leakage occurs when funds are transferred or paid from the host country by businesses or individuals or directly paid out of country by tourists. Payments would be for goods, services, commissions or remittances made by tourism employees (Pérez-Ducy de Cuello, 2001). The first ecotours to arrive on KYN were overnight kayak trips from Phuket for adventurers organised by one of the country’s original ecotourism operators, SeaCanoe Thailand, based in Phuket. The company showed that locally marketed tourism retained revenues domestically (SeaCanoe, 1998), while international intermediaries substantially increase leakage, by 75% or more in some cases. This problem was exacerbated by the rise of online booking platforms and global hotel brands, which withhold a notable portion of revenues as commission or off-island remittance. Nationally, leakage across Thailand’s tourism industry may reach 70%, especially when considering air travel. Sangpikul (2017) studied tours operated by members of the Thai Ecotourism and Adventure Travel Association, including SeaCanoe and showed that longer tours, with community visits, brought the most economic benefit to the local area.  

SeaCanoe’s day trips to the Bay, favoured by the mass ecotourists staying in Phuket, faced competition in the 1990s (Kontogeorgopolus, 2003; Shepherd, 2002). Overseas tour companies were selling a competitor’s kayak day trip for 4,000 THB as a package to Taiwanese tourists, with 1000 THB per head retained in country (500 to the kayak operator, 500 to the local agent), a 75% leakage. SeaCanoe’s day trips, sold locally, retained 100% of revenues in country (Shepherd, 1998). At an extreme level, Lindberg (1998) has cited examples of leakage such as Chinese zero-dollar tours as high as 90%. 

The durability of ecotourism’s benefits is contingent upon both the status of natural resources and the volume of visitors, yet many definitions overlook the implications of carrying capacity and overtourism (Jitpakdee and Thapas, 2012). While the Thai government has classified destinations as ecotourism hubs based on its biodiversity indices and a lack of mass tourism, is has been labelled as an ecotourism destination though Chettamart (2003 argues that how this is assessed by the Thai government may not strictly conform to internationally accepted ecological and social criteria. Butler (2020) notes that exceeding carrying capacity of ecologically sensitive environments such as KYN results from overtourism and from a socio-cultural perspective, residents may view tourism as intrusive to local culture. Examples include public consumption of alcohol and tourists wearing skimpy clothing and nude sunbathing (Jitpakdee and Thapas, 2010). This reflects models such as Doxey’s irritation index that describes shifts among residents from initial enthusiasm to antagonism as tourism intensifies. Doxey (1975) noted the four stages of attitudes by local to tourism as being 1) euphoriaas tourism opportunities arrive 2) apathy and3)annoyance or irritationas tourism developsand finally 4) antagonismas tourism crowding increases. Hess (2019) considers inappropriate behaviour in Thailand directly related to overtourism and that Thailand has already exceeded its tourism carrying capacity due to unacceptable tourist behaviour, environmental degradation, and overcrowding.

Overtourism has been tackled in south Thailand. In 2015, local environmentalists and residents of nearby PhiPhi islands petitioned the local government to close Maya Bay, a beach of natural beauty made popular by the film The Beach (Tzanelli, 2007). Maya Bay was visited by over 4,000 tourists a day, causing damage to the coral and marine ecosystem. The area was closed for four months in 2018 and has remained closed for two months a year to allow for rejuvenation. A quota system of 2,000 visitors a day with strict rules on no swimming and a ban on coral damaging sun creams. (Public Relations Department, 2023). The closure and quota system were possible because of the executive authority of the Department of National Parks (Koh and Fakfare, 2020). In 2024, The Federation of Thai Tourist Associations warned the government that ‘overtourism is now at a crisis point’ (Pattaya Mail, 2024). The Deputy Director of the TAT also acknowledged that the country “lacks a tourism carrying capacity blueprint” (Bangkok Post, 2024a) and announced a shift towards a focus on higher spending tourists for 2025 (Bangkok Post, 2024a). 

Jitpakdee and Thapas (2012) questioned the role of outsiders investing in tourism projects and the effect on island culture. Between 2006 and 2009, 166 households sold land to outsiders i.e., non-island Thais or foreigners. Cohen (1983) researched development dynamics of bungalows on Ko Samui Island and reported conflicts between the local fishermen and Thai Chinese from the island’s commercial centre over tourism development, as well as several killings of outsiders. Conflicts between outsiders and locals, especially within the tourism industry in south Thailand is well documented with SeaCanoe involved in a dispute over access to the sea caves in the Bay, resulting in an assassination attempt (Rome, 1999; Shepherd, 2002).  

As tourism arrivals increased, foreign outsiders, individuals, and businesses with investment capital were attracted, often squeezing the locals out of business (Cohen, 1983). Thailand’s foreign business act (Royal Thai Government, 1999) allows only a minority shareholding by foreigners in a business. However, Thailand’s Board of Investment attracts direct foreign direct investment (FDI) into the tourism industry, allowing 100% foreign ownership for a range of activities, including hotels with over 100 rooms (Thailand Board of Investment, 2023). FDI incentives have encouraged and legitimised the growth of foreign ownership in the tourism industry in Thailand and contribute to the increase in mass tourism (Solyu et al., 2023). 

The Department of Tourism publishes standards for tourism that includes accommodation, business standards, tour guides, and all other activities relating to tourism. The TAT is responsible for issuing tourism operating licences, requiring a Thai majority owned company, an office location and a deposit of up to 100,000 Thai Baht or $US3,000 (Department of Tourism, 2024). Tour guide licences are restricted to Thai nationals and require a degree in tourism or participation in a three-month training course (Royal Thai Government, 2008). Hotels are governed by the Hotel Act and cover any paid accommodation for less than 30 days. (Royal Thai Government, 2004).  Construction of a hotel is governed by the Building Control Act, 2522 (Royal Thai Government, 1979). There is effectively no limit on the number of hotels that can be constructed in any location.  ‘Non-hotel accommodations’ include rental villas, hostels and homestays.  In 2023, barriers to entry were lowered by doubling the number of rooms from 4 to 8 and increasing number of guests to from 20 to 30, but with more stringent safety standards (Royal Thai Government, 2023). The changes have been criticised by the Thai Hotel Association over questions of safety and potentially reduced tax revenue (Bangkok Post, 2023). Central government budgets are allocated according to the number of households registered in each Tambon. For KYN, with a high visitor to resident ratio, the budget for infrastructure, refuse collection and other services is insufficient to manage the burden of tourists (Churugsa et al., 2007). Furthermore, Musa (2022) stated a lack of understanding regarding tourism industry by officials in the sub-district or Tambon Administrative Organisation (TAO) as well as a lack of cooperation and enforcement of laws and standards on KYN. 

Much of the literature studied relating to the island and Thailand is from Thai and Asian scholars and sources. Some of the papers researched from Thai scholars, especially those in the Thai language generally relate to the government’s promotion of ecotourism and tend to discuss both tourism and ecotourism in similar contexts. Thailand has strict libel laws and the unwillingness to offend others within Thai society means that the papers written by Thai scholars will not be as openly critical of problems as that written by foreigners.  A limitation of the literature, when looking at an international context, has been the focus of study of Thai domestic tourists and their activities. Whilst domestic tourism is a very important part of the tourism industry, many aspirations and activities of Thai tourists will be different to the expectations of foreigners. Likewise, little literature was found that studied the role of outsiders in the Thailand tourism industry.  

• Methodology 

Island tourism, following visiting historic cities, is the world’s second largest category of tourism (Marin, 2000). Islands are closed, manageable systems and ideal locations for research (Sharpley, 2015). Thailand’s southern Andaman Sea islands are popular destinations, renowned for their relaxed atmosphere. The majority of the country’s Muslims are found in the south of the country with a lifestyle and culture that is quite different to the majority Buddhist population.

KYN was chosen because it is a small island, easy to travel around, and believed to be at a stage of tourism development that matches the research questions of this study. The island is situated in Phang Nga Bay (the Bay) in South Thailand. The climate is tropical monsoon with an average rainfall of 2,400mm (Ramsar, 2024). The Bay has over 100 limestone tower karsts that form a spectacular seascape (Jiang et al, 2020). Clements et al. (2006) describe Southeast Asian karst as “arks of biodiversity” many of which have elevated levels of endemism. The karst’s caves are home to bats and swiftlets that produce nests harvested for bird nest soup (Price, 2011). Primates living on the karst include the dusky langur, macaques, gibbons, all on the IUCN Red List endangered species (IUCN, 2024). Phang Nga has the highest count of reptiles and amphibians in the country (Pauwels et al., 2002). The bay is home to 88 bird species (IUCN, 2024) including the white belly sea eagle and the oriental pied hornbill which has been adopted as a mascot for the island (Phuket Rajabhat University, 2024). The 40,000-ha wetland Phang Nga Bay Marine National Park includes the northern tip of the island and falls under the UNESCO Ramsar Convention (Ramsar, 2024). The National Park was made famous by the James Bond film The Man with the Golden Gun (The Man with the Golden Gun, 1974). 

KYN is an administrative tambon of Ko Yao district in Phang Nga Province. The island is approximately 46 sq km with a registered population of 4,230 and a non-registered population of approximately 3,000. The island has 2,131 ha of agricultural land, of which 160ha is rice, 83ha is coconut, and 1,700 is rubber tree. 570 households are involved in small scale fishing. The island has 3 primary and two secondary schools, one Buddhist temple, 7 mosques and 7 Muslim centres of learning (KYN Subdistrict, 2024). The island has 58 registered hotels and bungalows (KYN Subdistrict, 2024b) with 650 registered rooms (C9 Hotelworks, 2024). There are at least 60 homestay facilities on the island, many of which are not registered. The island has generally well-maintained two-lane roads, 10 service fishing and ferries. Fast Internet and mobile 5G service on the island are readily available. 

No previous study has either applied qualitative methods exclusively to investigate sustainable tourism development or involved foreign participants on KYN, making this research the first study to do so. Semi-structured interviews allowed a deeper understanding of the participants’ views which may not have been gleaned from questionnaires. The interviews allowed for flexibility and provided a contextual understanding of the issues, prompting further discussion of themes that had not been previously considered. Focus groups or questionnaires would not have been possible to organise in such a short timeframe with limited resources. Participant recruitment came from personal and business contacts, Facebook and other social media groups (English and Thai). Snowball sampling was used (Naderifar et al. 2017), taking care to ensure that recommended participants were not biased. Participants covered the whole tourism supply spectrum, from international hotel financiers to local boat owners. Participants were recruited using both English and Thai social media groups, particularly Facebook.

Semi-structured interviews, no longer than 40 minutes, were held face to face on the island with participants on the island over three, one-week periods between May and July 2024. All interviews with foreigners were in English and most of the interviews with locals were in Thai. Interviews with other parties were held virtually. Thai people are generally shy, the concept of krengjai (extreme consideration) pervades society and discourse (Chaidaroon, 2003). Libel laws are strict; public or published statements may be seen as bringing one party into disrepute, even if true. (Royal Thai Government, 1956). Garrett et al. (2003) consider semi-structured interviews to be obstructive, and this was taken into consideration when interviewing Thai people. Expats living on the island, tend to be much more outspoken than Thai people who will avoid public confrontation and criticism (Persons, 2016). All interviews with the islanders were anonymised to avoid any confrontation and interview notes were taken by hand to avoid formality and suspicion. The socio-demographic characteristics of participants are identified in Table 1.

Table 1: Socio-demographic Characteristics of Participants

Participant Number	Organisation	Group	Gender	Ethnicity	Religion	Location
BM1	Bungalow Business	Outsider	Male	Western	None	KYN
CB1	Homestay Business	Local	Male	Thai	Muslim	KYN
EX1	Retiree	Expat	Female	Western	None	KYN
EX2	Retiree	Expat	Male	Western	None	KYN
EX3	Expat Worker	Expat	Female	Western	None	KYN
EX4	Retiree	Expat	Female	Western	None	KYN
EX5	Property Business	Expat	Female	Western	None	KYN
IV1	Travel Industry	Investor	Male	Western	None	Bangkok
LB1	Restaurant Business	Local	Female	Thai	Muslim	KYN
LB2	Restaurant Business	Local	Male	Thai	Buddhist	KYN
LB3	Restaurant Business	Local	Male	Thai	Buddhist	KYN
LB4	Bungalow Business	Local	Male	Thai	Muslim	KYN
LB5	Bungalow Business	Local	Female	Thai	Muslim	KYN
LB6	Bungalow Business	Local	Male	Thai	Muslim	KYN
LB7	Fisherman	Local	Male	Thai	Muslim	KYN
LB8	Taxi Driver	Local	Male	Thai	Muslim	KYN
LB9	Shopkeeper	Local	Female	Thai	Muslim	KYN
LB10	Bar Business	Outsider	Female	Thai	Buddhist	KYN
LE1	Employee	Local	Female	Thai	Muslim	KYN
LP1	Politician	Local	Female	Thai	Muslim	KYN
LR1	Retiree	Local	Female	Thai	Buddhist	KYN
ME1	Delivering Asia	Media	Male	Western	None	Bangkok
ME2	TravelFish	Media	Male	Western	None	Indonesia
OB1	Restaurant Business	Expat	Male	Western	None	KYN
OB2	Hotel Business	Outsider	Male	Thai	None	KYN
OB3	Hotel Business	Outsider	Male	Thai	None	KYN
ST1	Student	University	Male	Thai	Buddhist	Phuket
TA1	PATA	Trade Association	Male	Western	None	Indonesia
TA2	PHA	Trade Association	Female	Western	None	Phuket
TI1	YANNA Ventures	Travel Industry	Male	Western	None	Bangkok
TI2	Our Jungle House	Travel Industry	Male	Western	None	Bangkok

Thematic Analysis was used to analyse the transcripts from the interviews (Braun and Clarke, 2006). Key bullet points of the responses to questions and statements were made. Participants responses were identified by relevant words, sentences or phrases that corresponded to the research, for example: ‘buddhists’, ‘foreigners’, ‘farang’ [western foreigner: Thai], ‘people from …’ all of which would describe ‘outsiders’. Phrases were coded and grouped into patterns around different themes surrounding the research question. Initial coding of the relevant phrases and responses were classified using labels that captured the essence of the responses. Broader themes were developed from similar codes e.g. ‘lack of language skills’ and ‘lack of access to training’ were themed under ‘potential barriers to employment’. Themes were reviewed against key topics studied in the literature review and those outlined by the authors. 

• Results

4.1. Typology of Visitors 

Long-term resident expat participants noted the change in the type of tourist visiting over the years:

“Skimpy bikinis, in the market, in 7/11, topless women on Pasai beach” (EX1) 

“The original visitors were more thoughtful – they made the effort to be here. Guests complained about the sounds of nature, the dawn chorus, tokay lizards, cicadas” (EX3),

“Adventure groups used to camp on the beaches and stay in local villages. Tourists do not throw trash and are positive about recycling” (EX4),

“Just one sign at the pier tells tourists to dress respectfully, not to wear bikinis in public. The locals are too shy to tell them to stop [dressing disrespectfully]” (LB4),

“Many do not really care… we’re on holiday!” (LP1).

Thoughtful visitors would equate to the Backpackers. Despite negative connotations about this type of tourists (Larsen et al. 2011), comments were generally favourable, particularly about their spending with local businesses.  The group tours were the adventurers, and the mainstream tourists wouldbemass ecotouristsas suggested by Kontogeorgopolus (2003a). No comments were made about Mass tourists, (Sezgin and Yolal, 2012) who remain a small part of tourism on the island, mainly confined to hotels. Visitors’ environmentally responsible behaviour, relating to garbage was also noted by Panwanitdumrong and Chen (2021) who studied tourist attitudes on a southern Thai island. Lack of cultural respect by some visitors remains a problem with few proactive measures taken to help prevent this. This is a problem that needs to be curtailed to ensure that the island’s culture is not affected. 

As with tourists, several of those interviewed commented on the change in the type of foreign expat resident to the island:

“It used to be a lifestyle choice to come and live here, it was not easy, no roads, no electricity and you had to learn to live and work with the locals” (EX5),

“The second phase of expats were more like snowbirds, who spent several months here a year. The current phase is far more casual, looking for a more luxurious holiday homes existence with little contact with the locals” (EX4).

The type of expat resident has changed over time. Thailand has modernised, transportation has improved, and a range of accommodation choices on the island with a selection of food options are available.  The early expat visitor who arrived as a tourist, chose lifestyle changes which matches Cohen’s (1983) definition of early driftersand foreign outsiders. The second and third phase of expat equates to King and Cela’s (2023) International Retirement Migrants. Latter day expats are evidently wealthier, likely spending more money locally, but have far less contact with the local community. This frames them more like long-term tourists than some of the expats who are more involved on the island.  

4.2. Outsiders  

The influence of outsiders and their involvement in the tourism business has had a big influence on tourism development not only the island, but over the whole of Thailand:

“Outsider involvement in tourism is huge and is the major contributor to growth. There are good and bad actors with a few just in it for the money but most are very passionate about Thailand” (ME1),

“It is not good to have foreign control, it pushes locals out of the service industry” (ST1),

“We know the source market [better than the locals]” (TI1),

“Some outsiders are just profit first” (TI2),

Outside investors, catering to, and attracting a market of foreign tourists is expected.  Salleh et al. (2011) noted a direct linear relationship between tourism arrivals in Thailand and foreign direct investment (FDI). While some outsiders are responsible for overdevelopment and overtourism their involvement may be driven by demand. This may have negative effects if the outsiders are not good actors. 

              Hotels are the largest investments on the island. Three of the island’s registered hotels are members of the non-profit Phuket Hotels Association (PHA) (Phuket Hotels Association, 2024). PHAprovides scholarships and environmental initiatives such as Green Day beach cleanups and community work helping establish vegetable gardens in local schools. Six Senses Yao Noi, a PHA member, established in 2007 (Six Senses, 2024), now part of the IHG group (IHG, 2024) is a 56 private villa resort priced at least $US500/night. The resort uses natural construction materials and vernacular design. 50% of the resort’s employees are from the island. Six Senses’ sustainability efforts have won multiple travel industry awards with 0.5% of all revenues funding sustainability projects off-resort, e.g., four clean drinking water projects on the island including the local hospital:

“Our reservoir serves all water needs. Drinking water is purified here. Grey water is processed and used to water the gardens. Waste food goes our poultry farm, we compost vegetable waste for our vegetable gardens. Guests enjoy learning and taking part in sustainability projects. We have established a protected mangrove area next door” (OB2).

Paradise Ko Yao Resort (Paradise Ko Yao, 2024), another PHA member, is a low scale development at the northeast of the island with access by dirt road or boat. Of their 250 staff, 80% come from the island with 10 people working full-time recycling and composting. The Cape Kudu hotel, (Cape Kudu Hotel, 2024) not a PHA member, is a 56 room 100% Thai owned property, built in 2016. 94% of their staff come from the island:

“We buy as much as possible from the island and have a scorecard to track this e.g. local rice and use local taxi services to bring guests to the hotel” (OB3).

Hotels are acting responsibly, taking part in many environmental programs such as Green Hotels (Green Hotel Thai, 2024). Participants acknowledged this, commenting on the low-scale, unobtrusiveness of most properties and their Corporate Social Responsibility (CSR) projects. Sangpikul and Sivapitak, (2023) found that guests of Thai hotels chose a beautiful hotel location/atmosphere/design over sustainability as a deciding factor when choosing their destination.  Participants acknowledged the benefits of employment, but some were critical of hotels’ sourcing policies and the level of employment opportunities:

“Hotel staff are brought in from outside. Lower-level jobs are given to the locals” (LP1),

“Some hotels employ more locals than others. I think that they just don’t trust us” (LB4),

“Operating costs to sustain this type of environment are easily 3 to 4 times higher than a traditional non-Eco resort” (IV1),

“Some of these places are just profit first, greenwashing” (TI2).

Lack of English language skills is a problem in the Thailand hotel business, as noted by Sermsook et al., (2021) in their study of a resort in Phang Nga province. However, despite requiring similar language skills, there is disparity between one hotel employing 94% local staff and another employing only 50%. At these lower levels of local employment, where evidence shows that a much higher percentage can actually be employed by competitors, this questions the concept of how much ecotourism is benefitting the local community (Chandel and Mishra, 2016). Either this is not ecotourism, or ecotourism’s tenets are not being put into practice.  

Jitpakdee and Thapa (2012) noted 14 establishments on KYN licensed to sell alcohol in 2010. By 2024, the number had increased, with to over 20 outlets surveyed on Pasai beach alone. Some locals and expats residents have been critical of outsiders selling alcohol on a Muslim island:

“The bars are all owned by outsiders, Buddhists from other provinces or foreigners” (LB6),

“This is not a party island, if you want to party, go to Phuket” (LB5),

“The island needs to be zoned. Officially. Bars need to be kept in one area and other areas reserved for local and agricultural activities” (LP1),

“Our bar is here for the tourists, foreigners, and the non-Muslim people on the island to enjoy. Local people who do not approve of the bars are also benefiting from tourism” (LB10).

Zoning on the island is voluntary, not mandatory. (LP1) Bars on the island are low-key compared to Phuket. Islanders seem to be at the annoyanceor irritationlevel with bars (Doxey, 1975) but understand that their presence is a requirement for some tourists and visitors. Thawornpraphasawat (2019) in a presentation for the Thai Parliament claimed ‘disturbing the locals’ as one of the problems of overtourism. In some Muslim countries, e.g. The UAE, alcohol consumption is limited to hotels (Meethan, 2010). However, Thailand is not a Muslim country as such, and national laws and alcohol licencing is at odds with the culture of the island. 

Locals traditionally eat at home and at small restaurants serving simple food. Most larger restaurants on the island are geared towards tourists with many set up by outsiders, both Thai and foreigners. Thai owned restaurants can employ staff from Myanmar whereas foreigners need to employ Thai staff to comply with regulations (Royal Thai Government, 1999):

“My sister works in a farang [Western] owned restaurant. The pay and benefits are better [than Thai owned restaurants]” (LE1),

“We buy 99% of our food and supplies from Thailand and 80% from the island” (OB1),

“Most of the local food on the island is not great for tourists” (BM1).

Thailand is well known as a food destination and the availability and variety of good restaurants is an enabler for attracting visitors. Safe and hygienic food is important for European visitors to Thailand as noted by Wongleedee (2013). Hipsher (2021) reported significantly higher levels of job satisfaction in foreign owned tourism businesses in Thailand which concurs with the comments of one of the participants. Outsider involvement in some cases, can help increase standards of food safety and employee job satisfaction. 

Many other outsider-owned or managed tourism-related businesses on the island serve as attractions to visitors. The island boasts Thailand’s only beachfront Muay Thai Gym (KYN Phoenix, 2024), a Yoga Retreat (Island Yoga, 2024) and a traditional healing institute (Shima Healing, 2024). These, and other foreign-owned businesses are generally viewed positively by other businesses on the island:

“Tourists training at the Khai Muay [Muay Thai gym], and other places can stay here many weeks” (LB10),

“We get regular, repeat business from the wellness visitors, they are good customers” (LB2).

Outsider-owned businesses provide activities and attract long-term visitors. Anantamongkolkul et al. (2019) suggest that long-stay health and wellness tourists are important, focusing more on tourism yields. The government has seen the benefits of health, wellness and medical tourism since Thailand’s inception as a medical tourism hub in 2003 (Noree et al., 2016). In 2024, the Ministry of Public Health announced that Ko Yao District would be established as a ‘wellness destination’ (Bangkok Post, 2024b). However, skills and training for wellness and medical tourism on the island would likely require staff from other parts of the country. 

4.3. Community-Based Tourism 

The Chumchon Thong Thiaw [Village Tourism] Homestay group explained that their guests were nearly all Thai and guests came with study groups from local universities, tour groups or NGOs. (CB2, Peace Tourism, 2024). There had also been splits from the original homestay group and that there were now three community homestay groups on KYN. (LB4). Not all homestay owners are part of the CBT programmes and many act independently. Previous tourism industry experience and the ability to sell room inventory online via platforms such as booking.com have helped develop their business with their international guests:

“Our community group does not have the skills or knowledge of the Internet” (CB1),

“This homestay is not part of the community group. Our guests are European” (LB1),

“We have to move away from telling them you how to organise their community, to be community lead” (TA1).

The CBT members come from fishing and agricultural communities who have little or no previous experience of tourism, English language skills or how to promote their business online. Despite having 52M Internet users (NBTC, 2024) out of a population of 66M (Thailand Board of Investment, 2024) digital skills compared to usage, are 74% substandard according to The National Economic and Social Development Council (The Nation, 2024). Promotion of CBT projects has been almost exclusively to the domestic tourist market (Kontogeorgopoulos et al., 2014). Goodwin and Santilli (2009) noted the importance of donor dependency for CBT projects which may require additional funding over time. Lack of follow-up with some projects was noted, e.g., many large roadside blue signs, advertising CBT projects in both English and Thai e.g. Tha Khao Homestay Community Based Tourism.  However, QR codes on the signs lead to dead links or unrelated websites. Lack of funding has stranded some of the CBT projects, leaving them without the resources that they need to benefit the community to its maximum potential. 

              Hotels organise activities such as beach clean-ups where guests and local community are encouraged to take part. Community groups and individuals also run recycling projects, beach and mangrove clean-up activities:

“People seem more interested in infrastructure than the environment” (EX2),

“We ran a trash collection programme – the locals had no idea about trash separation” (EX1),

“Our project collects plastic bottles twice a week from collection centres which we sell on the mainland. Proceeds go to help dialysis patients and support the local rescue service” (LR1),

“We see a lot of community projects, but many of them are one offs, just for show. Everyone gets a t-shirt, a hat, and a nice group photo and then everyone forgets about it, with little or no follow up” (LP1).

The TAO is unable to manage a complete refuse collection and recycling program due to its limited budget. Voluntary programs are organised by the public and private sector. While no study has been done on refuse collection and recycling on KYN, Leeabai et al., (2021) claim the main problem is that the Thailand’s lack of a comprehensive trash separation management programme.

4.4. Financial Benefits and Economic Leakage

Small businesses providing services and employees generally welcomed the growth of tourism on the island and the financial benefits: 

“I can make a lot more taking out tourists than by fishing” (LB7),

“During the high season we can make good money” (LB8),

“I work at the hotel and live at home. It is better to stay here with my family, than work in Phuket” (LE1),

“Tourism is good for the island. A lot of families are wealthier now” (LB2),

“Tourists from the bungalows enjoy shopping and eating in our shops” (LB9).

Findings concur with Jitpakdee and Thapa’s (2012) interviews with 178 households on the island who reported that tourism had provided 50% of those interviewed with employment opportunities. Participants preferred dealing with both smaller properties and certain types of tourists. This is evidence of direct benefits to islanders at a local scale. Several participants were concerned about the overreliance on tourism for revenue and the opportunities for selling land for tourism development. Land For Sale signs can be seen, with asking prices between 1M and 30M Thai Baht ($30k – $900k) per rai (1 rai = 0.16ha) depending on location:

“Selling your land is selling your culture. Farmers sell their land, build a house and buy a pickup truck then find they have no income anymore. Rent it, don’t sell it” (LP1),

“During Covid, we managed OK. We still had our farming, rice, and cows. We should not rely on tourism only” (LB4),

“Sustainable living can be made through farming. Farming is a good opportunity, but we must learn new techniques from overseas” (LB3). 

Participants were concerned about locals selling land losing the opportunity for future revenues.  Forsyth (1995) showed that Thai farming communities who adopted tourism used revenues to increase agricultural yield by employing outside labour. Developing agriculture with new cash crops to supply to restaurants and hotels has potential to increase revenues, while retaining land in the ownership of the locals and providing a sustainable future. 

Small tour operators are often found on east coast beaches and along main roads on the island. Most offer boat tours to islands in the bay. Tour operators and guides must be registered with the TAT but many could not show evidence of this (Royal Thai Government, 2008). Some participants were concerned about this: 

“Many are not licenced tour companies or guides, and few speak enough English. There is never any inspection of permits or licenses. It is too easy-going. It is not fair on those who are qualified or registered” (LB4),

“People running tours need to understand the cultural stories. There is no nature interpretation. It is just ‘here is an island’, take some pictures to post on Instagram” (LB5),

“It is difficult to explain some things to guests because I speak only a little bit of English” (LB7).

Unlicensed local operators benefit directly from tourism. However, this is illegal and at the expense of registered businesses and certified tour guides. Thailand’s Revenue Department will lose the income from tax revenue and safety standards may also be lacking in unlicenced operators.  There has been a crackdown on illegal Chinese inbound tour operators in the country (Bangkok Post, 2024c) but not local small-scale operators. Having a registered company, with an office, making up to 100,000 Baht (US$3,000) security deposit is expensive for small operators and guide certification is prohibitive (Department of Tourism, 2024). Given that ecotourism should ’benefit and include the local community’ (Chandel and Mishra, 2016), the Tourism Business and Tourist Guide Act of 2008 may inadvertently discriminate against the local community (Royal Thai Government, 2008). Central government policies and procedures may not be appropriate for some local, remote communities. 

Additionally, unregistered bungalow complexes, purporting to be homestays exist. Some of the bungalow owners who have registered their properties and pay business taxes felt that this practice is unfair:

“Some bungalows are owned by families. A brother owns two rooms, older sister owns two rooms, younger sister owns two. This gets around the rules regarding registration of bungalows. It is a collection of homestays. No one cares”(EX4),

“Many of the accommodations claim to be homestay but the visitors do not have the experience of living with the family, it’s basically a bungalow setup” (LB1).

Guest safety and security was a key deciding factor for tourists when choosing bungalows in south Thailand (Choosrichom, 2011). Ineffectiveness of tax collection and the practice of tax evasion in the country was also noted by Janbunchong (2009). While this practice benefits owners, it benefits neither the safety of guests nor local tax revenues. Holiday lettings advertise privately on platforms such as Airbnb which lists over 50 villas on the island. Airbnb is legal in Thailand but renting a property for less than 30 days requires a hotel licence and unregistered, short-term holiday lets may be deemed illegal (Pandee, 2018). Some islanders expressed concern about this grey market. 

“Some foreigners on this island, who do not live here all the time, rent out properties and profit from it. This is not the way it is meant to be” (EX4),

“We have buried our heads over Airbnb. 70% of tourism happens at the micro level so this kind of business looks good at face value, but it is getting completely out of hand” (TA1),

“Airbnb pushes up prices and foreign renters playing lease arbitrage forces locals out of the rental market and drives leakage” (ME2).

Airbnb rentals, driving up prices for locals, has been well documented in cities in Europe such as Lisbon (Cocola-Gant and Gago, 2021). Overseas based owners renting out either their own or leased properties and collecting rents out of Thailand is leakage, with legitimate operators and the Revenue Department suffering. 

4.6 Overtourism 

Participants were concerned about overtourism and were worried about uncontrolled development:

“They are building bungalows and small resorts everywhere, faster than demand. We are getting enquiries from Russian tourists. When they arrive and start buying up and starting businesses, that will be the tipping point. The cycle cannot change. I give it one or two more seasons” (BM1),

“One large hotel has built right on the main beach road. The architectural stye is completely out of place for a southern Thai island” (EX5),

“We need more government involvement; we need more regulations” (TI1).

Hotel regulations make no mention of the number of hotels that can be built in any one area (Royal Thai Government, 2004). Building permits are approved by the local authority (Royal Thai Government, 1975; Royal Thai Government, 1979). Whilst there are height limits and setbacks from roads are controlled, there are no regulations covering building design. Without control, this could result in construction of more buildings that look out of place on a small tropical island. Several participants were concerned about encroachment by tourism businesses, both large and small:

“If you approach the public beach by longtail boat or kayak, the hotel security guard will send you away” (LB7),

“Jetskis tried to come here but the Marine Police stopped them. This is a National Park” (LB4),

“Bars and restaurants under the trees on Pasai Beach. This is public land. It spoils the view; they pay no rent, and it is unfair competition to people who own or rent land” (LB5),

“They put a windy road in the middle of the rice paddy. It is not needed. Now there are coffee shops in the middle of the rice paddy discharging waste effluent underground – this will affect the soil quality of the paddy fields” (LB3),

“Nothing happens, because nobody complains” (EX1).

The problem of encroachment is common in Thailand with steps, walls and other constructions frequently built on beaches (Bangkok Post, 2024d). In the case of encroachment and illegal activity in National Park areas, the Forestry Department’s rules under the National Parks Act (2019) are strict and regularly enforced. (Royal Thai Government, 2019). For non-national park land encroachment, the authorities are unlikely to act unless official complaints are made and police corruption in Thailand is extensive, (Trimek, 2014), making enforcement difficult. 

Participants had mixed feelings over the future of the island. All were passionate about the island and most understood the potential problems of over development:

“This place is unique, I fear that it will end up like any other southern Thai island, it is sad. The taxi service is turning into a bit of a mafia and there are reports of drivers fighting over customers at Manoh Pier” (EX4),

“They are talking of charging an entry fee for the island. There are many disputes on the island over land” (EX5),

“The island will resist. This is a Muslim community” (LB1),

“We don’t get any help from the authorities to promote tourism and develop our businesses the right way. There are so many government departments involved, but no coordination” (LB4),

“They need to stop building” (BM1),

“We need help at a provincial level, a CEO Governor” (LP1).

The concept of CEO Governor was introduced in 2001 (Pongpaicit and Baker, 2004) giving provincial Governors more executive power. In 2023, it was announced that the scheme would be extended to all provinces in 2024. (Bangkok Post, 2024e). There was clearly a desire to maintain the charm of the island and a fear by many that overdevelopment would turn the island into another ubiquitous resort destination described by Ritzer (2000) as the rationalization of recreation. Limiting further accommodation development and construction, could maintain current or increased revenues to the existing community. Charging an island entry fee and/or room taxes could help support community projects and those who do not benefit directly from tourism. Scarcity would drive room rates up which would support the government’s aims of higher value tourism. 

• Concluding Discussion

It is unsurprising that the majority of KYN island residents perceive tourism growth as beneficial, particularly with increased revenue from accommodation, food, transportation, and tours being the drivers of growth. Yet, these economic advantages are accompanied by notable challenges. Specifically, economic leakage occurring at the micro-level, suggesting that the local community could be benefitting more directly from improved local procurement practices (Meyer, 2006). The existence of a grey market is attributed to inadequate control, inconsistent enforcement, and regulations that are misaligned with the realities of local contexts (Hampton, 2005). Tourist demographics have shifted substantially over time. Whereas earlier visitors, predominantly backpackers, were generally more considerate and respectful of local cultural norms, more recent tourists appear more interested in leisure-focused activities associated with a sun, sea, and hedonism model (Uriely et al., 2002). This shift has created tensions across the island, which perceives some contemporary tourists as disrespectful of their community, which may foster feelings of apathy and irritation among residents towards tourists (Schönerr et al., 2023).

Investment patterns further illustrate the external influences shaping the island’s tourism sector. Investors, entrepreneurs, and foreign residents influence land ownership, cultural practices, and the direction of tourism development. Hotel developments are consistently funded by either outsider Thai investors or companies with foreign shareholders. Involvement of foreigners in tourism development is common in Thailand, reflecting a broader national trend where foreign participation in tourism development is prevalent (Cohen, 1996). This engagement from outsiders has introduced new tourism activities that cater to the European tourists e.g., restaurants and bars. Though international standard hotels have contributed somewhat to the local economy through employment, the extent of local hiring varies widely among establishments with some employing a higher percentage of locals than others, that further exacerbates the distribution of economic benefits across the island (Scheyvens, 2002). The community on KYN plays a crucial role in shaping tourism activities. Community participation in CBT initiatives has generated positive economic outcomes and fostered cultural exchange. Nevertheless, CBT remains a minor aspect of KYN’s tourism industry, primarily serving the domestic market. Meaningful involvement from local stakeholders and residents is essential for effective ecotourism; yet current regulatory frameworks tend to disadvantage micro-businesses and small entrepreneurs that limits broader community benefits (Goodwin and Santilli, 2009).

              National policies and tourism promotion campaigns have been instrumental in increasing visitor numbers throughout Thailand. However, government efforts to develop ecotourism standards and decentralise tourism management have yielded mixed results due to persistent underfunding and inadequate implementation at the local level (Kontogeorgopoulos, 2005). Criticisms have also arisen regarding the TAT’s liberal use of the term ‘ecotourism’, which is seen as diluting its meaning and efficacy (López-Guzmán et al., 2011). Additionally, enforcement of land use regulations and the management of grey market activities continue to pose significant challenges. Increases in tourist activity inevitably exerts pressure on local environmental resources, which future research should prioritise measuring and quantifying these impacts to inform mitigation and adaptation strategies (Gössling, 2002). The perceptions of tourists themselves were not incorporated into this research. Future research could incorporate quantitative and qualitative approaches and assessments of tourists’ motivations and awareness of their environmental and socio-cultural impacts may present insights for future sustainable tourism planning (Pearce, 2005). Identifying reasons for tourists visiting KYN and their own perceived influence may alleviate cultural tensions by attracting visitors whose values align more closely with the values, expectations, and norms of KYN.

              The sustainable development of tourism on KYN requires a nuanced understanding of both its economic and socio-cultural effects in addition to a comprehensive evaluation of environmental impacts. This, therefore, presents promising areas for future research in an ecologically sensitive yet economically and culturally important destination that is experiencing growth in its tourism market. Engaging all relevant stakeholders including religious leaders, tourists, and companies, is imperative for the successful management of the island’s long-term sustainability prior to unsustainable practices taking hold.

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How Ecotourism can go wrong: The Cases of SeaCanoe and Siam Safari, Thailand

Shepherd, N. (2002) Current Issues in Tourism, Vol. 5 Nos 3 & 4, Channel View Publications

Shepherd, N. (2002) Global Ecotourism Policies and Case Studies, Channel View Publications

Abstract

In 1989, two ecotourism operators started business in south Thailand. SeaCanoe, running kayaking trips in Phang Nga Bay, and Siam Safari, running nature tours in Phuket and South Thailand. Both companies have received international awards and recognition for their work in promoting environmentally sensitive tours yet their efforts seem to have been thwarted by the growth in mass tourism within South Thailand. This chapter looks at the relationship between mass tourism and ecotourism and questions whether the two are compatible or mutually exclusive.

Background

Phuket, Thailand’s largest island is promoted by the tourist industry as the ‘Pearl of the South’. Through the 1980s and 90s, Phuket has developed into Asia’s top tourist resort. Phuket lies 7 degrees north of the equator and has a varied terrain with sandy beaches and limestone cliffs. Inland is found forested hills and rubber plantations plus a huge variety of tropical vegetation. The island is one of South East Asia’s main yachting destinations with full marina facilities and a deep sea port that is used by cruise ships.

Phuket was a destination for Thai tourists and backpackers until the start of mainstream tourism in the mid 1980s with the development of major hotels including Holiday Inn, Le Meridien and Club Med. Phuket International Airport receives hourly flights from the capital Bangkok, and daily scheduled international flights from around the region. With the advent of charter flights in the mid 1990s, the airport now handles 20,000 arrivals and departures a year. The island is connected to the mainland by two bridges, with bus services from Bangkok and the south of Thailand. There are 20,600 licensed hotel rooms on the island ranging from five star international resorts to small bungalows plus a large number of unlicensed guesthouses. Tourism has achieved a meteoric growth in the 1990s. Official arrival figures have doubled over a ten year period to 2.6 million in 1998. (1) More recently, Thailand’s tourism arrival figures have been boosted by three factors – The Tourism Authority of Thailand’s (TAT) Amazing Thailand 1998 – 1999 campaign, the Asian financial crisis and political instability in Indonesia. (2,3)

The area surrounding Phuket is a nature lover’s paradise. The dramatic Phang Nga Bay, a UNESCO World Heritage site, is situated to the north east of the island and contains over 150 limestone islands, with stunning cliffs, pockmarked with caves that are home to swiftlets, bats and other tropical wildlife. Mazes of mangrove forest line the estuarine bay. Once in the bay, whilst only an hour or so from the mailnland, the experience is like being in the wilderness. Caves link the outside of limestone sea stacks to internal rooms, open to the sky known in Thai as a ‘hong’.

Within the caves and caverns swiftlets make nests that are harvested by the Birds Nests Monopoly. The nests that are sold for prices up to $US 1,000 a kilogram and are used in such delicacies as Bird’s Nest Soup. Traditional methods, are used whereby bamboo scaffolding is erected in the caves and workers scale the poles precariously to hand pick the nests from the walls of the caverns.

John Gray founded SeaCanoe, initially as an extension of his kayaking operation based in Hawaii. Gray had specialised in multi day kayaking tours in the South Pacific Islands with a customer base almost exclusively of US tourists. Gray had planned to expand his operating territory to the South East Asian region and in 1998 ran his first survey trip to South Thailand.

In exploring Phang Nga Bay, Gray found that it was possible to take inflatable kayaks through the caves to the inner rooms or ‘hongs’ within the islands. Whilst these caves were known by local fishermen, their exploitation for commercial tourism had never been considered.

The tourist market at that time whilst growing, was at a transition stage. Wealthy tourists, staying at luxury resorts were beginning to force out the backpacker market that had moved on to other destinations such as Ko Samui in the Gulf of Thailand. Phuket was growing as an up market destination, with some rooms in luxury resorts sold for several hundred dollars a night. There was certainly no real charter or package tourism market at that time, most of the tourists in hotels being FIT travellers, purchasing mix and match packages from specialist Asian destination travel brochures.

Gray found several local partners and the fledgling company started day trips to visit Phang Nga Bay. Gray’s plan was to establish Thailand as a destination for multi day trips sold abroad, but cashflow was essential and he decided to run day trips into the bay to build up the business.

Initially, SeaCanoe sold tours from the Diethelm Travel hotel tour desk at Le Meridien Hotel, near the resort town of Patong Beach. The tour was in stark contrast to others offered to tourists in Phuket. Phang Nga Bay’s ‘James Bond Island’ made famous by the film The Man with the Golden Gun was visited by many other tour operators. These tours sold for less than 1000 Thai Baht (then $US40) and included a boat trip to the island, with a stop for lunch at the stilted Muslim village of Ko Panyii in the North of the bay. The trip Gray offered was initially viewed by many as bizarre and expensive. Starting with a local ‘long tail’ boat, the vessel traditionally used by local fishermen, Gray and his colleagues took four people at a time into the bay. The boat was  

loaded with inflatable kayaks and a cook who would prepare lunch for the guests. In the bay, the guests would board the kayaks, and be taken, when the tide was just right, through the caves in the islands, to the hongs in the middle of the islands, where wildlife could be stared in the eye. The hongs were like stepping back in time and remain to this day a marvel to tourists. The tour was very popular with guests, and sold for double that of any other tour offered around Phuket

One of the key points to SeaCanoe’s day trip tours was that the caves and hongs could only take a limited number of kayaks at any one time. Furthermore, the time factor was crucial, because the caves could only be entered at certain tide levels. Too many kayaks would mean congestion with subsequent burdens being put on the environment itself (something that SeaCanoe felt very strongly about). Safety was also major issue – too many kayaks with untrained guides could (and would) result in dangerous situation. For these reasons, SeaCanoe decided to limit the number of tourists that it would handle in one day – enforcing a no drinking, smoking, eating, talking or taking of souvenirs policy for its customers. Guide staff amazed customers by paddling off to collect floating garbage and taking it back to the escort boat for proper disposal.

The company had developed a statement of purpose, which claims that:

“SeaCanoe develops sustainable business opportunities with local people that promote environmental conservation by providing high quality recreational adventures specialising in natural history and cross-cultural education.” (4,5)

SeaCanoe’s business ethics, training and approach to the environment are not in question, on the contrary, there are very few businesses within the tourism industry in Thailand that are as passionate about environmental protection and rural development as SeaCanoe. Moreover the company had involved locals in its share structure, thus embodying the principles that were widely becoming accepted by the fledgling ecotourism movement.

In 1992, SeaCanoe experienced its first taste of competition, started by an ex partner. The tours offered the same destinations as SeaCanoe and used a network of the now extensive tour counters on the resort beaches of Phuket to sell their trips. At the time, it was widely recognised by the travel business that SeaCanoe was by far the better operator in terms of trip quality, staff training, equipment used and responsibility to the environment. However, bigger commissions to tour counters and a cheaper selling price helped to promote the growth of the fledgling competitor.

In many ways, SeaCanoe has been more successful in its overseas marketing than locally. By 1998, the company had received five tourism accolades, the first, in 1995 was a regional winner in the British Airways Tourism for Tomorrow Awards. This was followed by a commendation by Green Globe (1996); a Gold Award for ecotourism by the Pacific Asia Travel Association (1996); an environmental/ecotourism award from the American Society of Travel Agents / Smithsonian Magazine (1997) and Best Inbound Tour by the Tourism Authority of Thailand (1998). The SeaCanoe management was experienced in marketing and promotion of its activities and over the years has been written about in dozens of newspapers and travel magazines as well as receiving extensive television coverage.

By 1996, the term SeaCanoe had more or less come to mean ‘sea kayaking tours in Phang Nga Bay’. The number of competitors had grown, and tour counters, and respectable travel agents tour operators and representatives were selling any of the now three other company’s products as ‘SeaCanoe’. In many cases, a SeaCanoe logo and sales brochure was shown on display, but the actual product sold was a cheaper imitator. Over the years, SeaCanoe hosted overseas tourism students for internships. The students were routinely sent to Patong Beach, the main resort town in Phuket to pose as potential customers. In nearly every case, when contacting tour desks to buy an original SeaCanoe trip, they were presented with other operators as better options, or indeed as ‘the original’ company. Names like ‘Sea Cave Canoe’ and ‘Sea Safari’ confused tourists, many of whom thought they were taking a trip with the company that they had seen on television. (6)

Nick Kontogeorgeopolous’ unpublished Ph D thesis (7) is probably the most thorough documented study of SeaCanoe’s business activities. In 1996, Nick made a survey of other kayaking operators and his field notes were published on the SeaCanoe web site to the annoyance of the other companies. In this report, Nick referred to other companies’ unappealing and sometimes disgusting food, decrepit escort boats, and noted that some companies ignored safety and natural history information. He also reported that some companies had minimal english language skills . (8)

Perhaps the most poignant statement made in Nick’s unedited field notes is:

“It basically seems to me that the passengers are all the exact same thing on all 4 companies. They all think the Thai guides are wonderful, friendly, etc., they all believe the food is good (whether it actually is or not), they all say how wonderful and fun and adventurous the trip is, etc etc. The only difference where the tourists are concerned is that some are FITs and some are not. The actual differences come 100% from the actual companies (supply side)” (8)

This final comment, in referring to the type of customer was key to the major problems that SeaCanoe were to experience in the latter part of 1990s.

There are several sales channels that can be, and were exploited that lead to the increase in SeaCanoe’s problems in the latter part of the 1990s.

Within the tourism industry, at a resort level, the overseas holiday company representative is a key figure. Many of the larger operators employ their own staff, smaller operators often use the services of ground handlers. The travelling customer’s point of contact with the overseas operator is the representative who can be a mine of information for their clients as well as a sales point for tours. In most cases, the operator such as SeaCanoe will make a contract with the holiday operator or their wholesaler and will pay a commission for all sales made. In many cases, the representative will be salaried, and their company will pay a commission to them for all sales that they make. However, quite often, the representative will contract directly with a tour supplier, who will pay a full commission directly to him ‘under the table’. That representative is then free to sell whatever he pleases to his customers, much like a tour counter, with his own captive market.

As the number of charter and package tours increased in the late 1990s, so did the number of sea kayaking companies. Holiday companies, under continual pressure to increase bottom line profits found themselves in a position where they could contract with other companies for higher rates of commission. Their customers, who were, in many cases, because of the budget nature of the package tour, less selective than the more up market travellers, did not really care about who they went with, as long as the price was right, and they had a good time.

At about the same time, the Asian market started to take an interest in sea kayaking. In 1997, the contract price to agents for a SeaCanoe day tour was 2,000 baht plus sales tax. Some contractors demanded a net rate of 1,000 baht (or less) per customer which was something that SeaCanoe could not, and did not want to offer despite the promised number of tourists. The Asian travel business, with tourists especially from Korea and Taiwan moves people around in caravans of 54 seat coaches, from tours, to restaurants, to commission paying souvenir shops. The smaller kayaking companies, with their lower standards were happy to take up the offer of large numbers of low paying customers. Shuttle services into the caves became the norm, with escort boats that were licenced for 20 people (including crew) being loaded with sometimes double that number of people on board. In 1997, the first death at sea occurred, when a boat captain of a ‘Sea Safari’ vessel outside a cave reversed over one of their own guides who was sitting in a kayak and he was mashed by the boat’s propellers.

During the high seasons (December – March) of 1997/8/9 the situation in the bay, in and around the caves and hongs became nothing short of a disgrace. Quite literally, dozens of kayaks form traffic jams and queues which give the impression of Bangkok’s ‘floating market’ rather than a back to nature experience. Many of the kayak operators with no conservation policy and guests and guides were often seen getting out of their kayaks in the hongs, climbing mangrove trees, collecting coral, playing water fights and scaring off the wildlife such as monkeys which are rarely seen in the hongs nowadays. Despite much lobbying to the TAT and the Forestry Department, nothing was done by the authorities to improve the situation in the bay. What was once an exclusive nature experience had become a nightmare. The onus of responsibility was thrown back to the kayaking companies themselves by the authorities to sort out their own problems.

By 1998, there were some 11 sea kayaking companies operating in Phang Nga Bay, who formed a cartel known as the ‘The Paddle Club for the Protection of the Environment’. Within Thailand, trade associations are quite powerful and are looked to by the authorities to provide the lead in many aspects of business. Several years earlier, at the suggestion of SeaCanoe and the TAT, an attempt was made to form a club to try and regulate the number of kayaks in the bay, but this was unsuccessful. SeaCanoe had advocated a system whereby time slots would be allocated to operators to reduce the number of kayaks in the caves at any one time. The agreement fell apart, and the fledgling association never got off the ground. The role of the new Paddle Club however was far more sinister. A partnership was made with the Bird’s Nest Monopoly who, under an old Thai law, had the right to harvest the swiflet’s nests found in the caves. The agreement was simple – kayak operators had to pay the club 100 baht per guest for the right to enter the caves, this money would be passed to the Monopoly who would restrict the overall numbers of kayaks in the caves. This position was, and is still in question legally and the right of the Monopoly to impose a charge has gone as high as the Prime Minister’s office. SeaCanoe refused to pay the charge arguing that the bay was a National Park and that the Monopoly only had the right to collect nests, not to derive income from tourism. In not paying, they were denied access to the caves by the Monopoly. SeaCanoe attempted to enter the caves, to the displeasure of the Monopoly’s armed guards and the dispute allegedly lead to one of SeaCanoe’s managers being shot and injured outside the company’s office in Phuket Town in October 1997. (9)

As a result of SeaCanoe not being able to enter the caves, bookings dropped off dramatically and the company suffered considerably by a lack of sales in the 1998/9 high season. In 1999, a deal was made directly with the Monopoly, avoiding the paddling club and SeaCanoe can now enter the caves in the late afternoon.

It has been argued by some operators that farang (western) managed companies are not beneficial to Thailand. These arguments are usually based on xenophobia rather than economics. Much of the actual revenues, especially where Asian tourists are involved end up overseas, not in Thailand. SeaCanoe retains 90% of revenues within Thailand, (10) but a survey comparison of trip revenues by cheaper operators shows a far different picture. In 1998, SeaCanoe charged 2970 baht for a one day tour. Almost all of their sales were made to local agents, which meant that effectively, all of the revenue remained in the country. One of their competitors however, sold its trip for 500 baht net rate. This trip was then resold to a Taiwanese operator for 1000 baht which was then offered as an optional tour for 4,000 baht equivalent – only 25% of the actual trip selling price found its way into Thailand. (11)

Robert Greifenberg moved to Thailand in 1989 after an agricultural background in Britain and Saudi Arabia. Greifenberg’s approach to starting the business was different to Gray’s. Whilst Gray had experience of the travel market from his time in Honolulu, Greifenberg had none. Starting with a small plot of land, together with his wife Srivilai, he ran a small bungalow complex catering to backpackers and FIT clients. Greifenberg offered his Siam Safari nature tours to his guests in the form of trekking and jeep safaris around Phuket as well as off the island to places such as Khao Sok National Park. Greifenberg also took interest in showing tourists southern Thai lifestyle, by visiting rubber and other plantations and showing tourists a slice of village life. At that time, Phuket was nothing like as developed as today and Greifenberg used his four wheel drive jeep to take tourists to hidden parts of the island. It was not however until 1992 that tour agents began to take interest in his products and Siam Safari took off. (12,13)

It is often suggested that tourism is responsible for over development and in many cases, this is true. However in Thailand, whilst tourism development is now a major contributor to the country’s GDP, much of Thailand’s post war growth has mainly been fuelled by agricultural exports. As a result of Thailand’s increased wealth as a developing nation an infrastructure has been put into place that accommodates tourism well. (14) One of the benefits to farming and rural development in Phuket especially, has been the road infrastructure on the island. Previous dirt tracks and paths have given way to paved roads as part of Thailand’s accelerated rural development project, which meant that safari tours became less exciting as the island became scarred with asphalt trails.

In 1989, commercial logging was banned in Thailand. Elephants, previously used for logging purposes had in effect destroyed their own natural habitats as Thailand’s forests had reduced from 95% of the land area 150 years ago to about 15 – 20% today. Their mahouts, now out of work, took the elephants into cities like Bangkok where they were used for begging. Baby elephants were also found in major hotels where they were shown off as tourist attractions. (15)

At the end of 1994, Siam Safari was the first company to introduce elephants in Phuket providing trekking tours for tourists. Elephants are expensive to keep, eating 250kg of food and drinking 200 litres of water a day. As with the case of SeaCanoe, imitators sprung up all over the island. Many elephant camps were set up along the picturesque mountain roads in Phuket, which relied on passing trade as well as paying commissions to tour guides. At times of drought, it was been reported that many of the elephants were not given enough water to drink or bathe and many incidents of abuse have been reported. In 1998, Siam Safari, together with the Dusit Laguna Resort Hotel founded Elephant Help – the Thai Elephant Welfare and Conservation Project. Despite the efforts of Greifenberg and Elephant Help to support elephant welfare in Phuket, the introduction of treks brought many problems.

Siam Safari set up a camp on Phuket from which they runs elephant treks and multi experience one day and half day trips. Trip options are numerous with opportunities to also see working monkeys picking coconuts; visit rubber plantations; see traditional Thai food being prepared in the jungle; short kayak trips in mangrove estuaries and trekking in the jungle.

As with SeaCanoe, imitators, using similar logos, itineraries and generally passing off as Siam Safari have set up in business. Mass tourism has driven prices down and Siam Safari have experienced similar problems to SeaCanoe with unscrupulous tour operators and competitors. By 1999, there were 17 elephant trekking companies in Phuket with a total of 170 elephants of which Siam Safari had 23.

A different problem in the field of Jeep Safaris took place in Phuket with the advent of illegal operators. One company – and there are no doubt more – operates exclusively during the high season using all foreign guides (which is forbidden under Thai law) using rented Suzuki Jeeps. Package tour representatives sell the tours directly to German tourists. Such activity, apart from being completely clandestine and illegal does incredible damage to potential tourism income. All of the revenues are taken without paying any tax, no locals are employed and much of the money leaves the country.

Siam Safari was honoured by the TAT as the Best Tour Programme in 1996; in 1997, the company received the British Airways Regional Tourism for Tomorrow Award and in 1999, PATA awarded Siam Safari a Grand Award for Ecotourism and Thai Elephant Conservation.

Greifenberg tries not to use the word ‘ecotourism’ in his marketing, not because he does not apply those principles to his business, but because he feels that the word is far too abused. Recently, he has been at pains to ensure that his jeep safaris, treks and other activities have no impact whatsoever on the environment by completely avoiding sensitive areas.

The problems that Siam Safari has experienced in Phuket are less complicated than those experienced by SeaCanoe, but nevertheless the problems are real. With a fleet of 25 Land Rovers, over 20 elephants and the capacity to handle 150 people on a one day trip, Greifenberg is not happy with the way his company has grown. He feels that he has been forced into catering to mass tourism as the only means to survive. He claims that competition has forced the product into the mass market from its humble beginnings, which was never his intention. He sells at prices that are similar to those charged 10 years ago, despite considerable inflation, especially as a result of the Asian currency collapse in 1997.

Conclusion

What then is the future for ecotourism operators faced with a market of mass tourism? It is clear that the principles of ecotourism embodied in the two companies discussed are diametrically opposed to large numbers of tourists, bottom line profits of international tour operators and unscrupulous business practices. But what are the options? In both cases, the authorities are rather powerless to help. The Thai government has a rather laissez faire attitude to business and the government’s agencies and departments are rather powerless to help. The Tourism Authority of Thailand has a role of promoting tourism in the Kingdom, regulation is more a matter of registration of a business as a tour operator and there are no real laws to control what could be seen as esoteric principles of tourism activity. Whilst the overall control of the National Parks falls under the Forestry Department, the rules and regulations do not relate to overcrowding. As long as trees are not being felled, and wildlife is not being damaged, there is little that the authorities can do.

It is easy in the west to talk about rules and regulations within the tourism industry. Despite central government rhetoric, in developing nations, understanding and principles of environmentally sensitive tourism at a local level is very hard to get across, especially in the light of potential business opportunities. Industrial development, especially in the Gulf of Thailand and dam construction for the country’s electricity demand imposes far more environmental damage than dozens of kayaks, jeep safaris or elephants in a discrete area. The new Thai constitution of 1997 includes such provisions, as “a person’s ultimate right to work to provide support for the family”. Ultimately, Thailand is a sovereign nation, and the authorities have the right to govern the Kingdom in whatever way they see fit, as long as International laws and human rights are not abused. Taking this into consideration, whilst ecotourism professionals and environmentalists may lament at such a tragic situation, maybe our efforts should be directed more to the mainstream tourism industry itself. The west is beginning to take the problems of child prostitution in Asia on board in an interesting way – offending nationals involved in sex with minors overseas can now be prosecuted back home in some countries. European Union laws make tourism operators responsible for the welfare of their customers whilst overseas. Maybe the west should be doing more to influence its own tour operators to be more responsible with what they offer to tourists.

References:

Tourism Authority of Thailand, Statistics Department, Bangkok

Bangkok Post 1998 Economic Review, Bangkok 31^st December 1998

Bailey, M. (1998) “Asia’s Tourism Market: The Ups & Downs”, Issues and Trends – Pacific Asia Travel Association, Bangkok

SeaCanoe Brochure (1997/8), SeaCanoe Thailand Co., Ltd., Phuket, Thailand

SeaCanoe Website (1998), http://seacanoe.com

Unpublished Survey of Phuket Tourists – (1998) Faculty of Hotel and Tourism Management, Prince of Songkla University, Phuket, Thailand

Kontogeorgopoulos, N. (1998) “Roughing it in Phuket, but the Jones’ Haven’t Been There (Yet): Reconceptualizing Tourism and Community Development inSouthern Thailand.” Unpublished PhD Dissertation, Department of Geography, University of British Columbia, Vancouver, BC, Canada.

Kontogeorgopoulos, N (1996), Unedited Field Notes

Rome, M (1999) “Shooting to Kill”, Action Asia February/March, Hong Kong Lindberg, K (1998), “Economic Aspects of Ecotourism”, Ecotourism – A guide for Planners and Managers, Vol 2, The Ecotourism Society, Vermont, USA

Lindberg, K (1998), “Economic Aspects of Ecotourism”, Ecotourism – A guide for Planners and Managers, Vol 2, The Ecotourism Society, Vermont, USA

Shepherd, N. (1998) “Ecotourism in Thailand – Where Does the Money Go? Tourism revenues in the light of the Southeast Asian Economic Crisis”, Institute of Ecotourism, Srinakarinwiroj University, Thailand – Third

International Conference – ‘Community Based Ecotourism” July 13 – 14 1998, Bangkok, Thailand.

Siam Safari (1999) Sales Brochures

Siam Safari Website (1999) http://www.siamsafari.com

Phongpaichit, P. and Baker, C (1996) “Thailand’s Boom”, Silkworm Books, Chiang Mai, Thailand

Greifenberg, R. et al (1998) “Nature Guide – Thai Elephants, Siam Safari, Phuket, Thailand

I presented this paper at a tourism conference in Laos in 2000. The contents are still relevant.

Keywords:  Leakage, Laos, marketing, Internet, revenues, LDC

Abstract

The paper examines how ecotourism operators can maximise revenues to host nations.  

A growing number of developing nations are promoting ecotourism as an alternative to mass tourism.  Most of the ecotourism operators are small to medium sized businesses whereas traditional tourism operators are much larger. Many National Tourism Authorities are promoting the sale of ecotourism products through traditional channels that are normally used for the sale of mass tourism. However, the traditional sales channels are not that successful at selling ecotourism products.  For example, wholesale / travel agent channels only allow about half of the customer’s money to stay within the host community. By using the Internet and other methods of communication, small ecotourism operators can deal directly with their own customers and gain the opportunity to keep much more revenue within their host community using. In doing so, ecotourism operators can avoid traditional agents and sales chains and can stick to one of the generally accepted principles of ecotourism – the involvement with and the benefit to local people. This presentation will outline the process by which small ecotourism operators and NTOs can use alternative marketing, to gain direct access to their customers and enhance their financial viability.

This case study relates to tourism promotion in the Lao People’s Democratic Republic (Lao PDR).  Laos is a landlocked country surrounded by China, Vietnam, Cambodia, Thailand and Myanmar (Burma).  The mountainous country has the Mekong River as its lifeline, a population of approximately 4.5 M and is one of the poorest countries in the world.  Laos represents one of the last corners of unspoiled Indochina.

Tourism is a relatively new concept in Laos.  Years of secretiveness and suspicion of the west followed the communist takeover of the ex French colony in 1975.  Tourism was rare in Laos until the opening of the Friendship Bridge in 1994, the first bridge to span two countries across the Mekong River.  Before this time, regulated tour groups were allowed, but Visa complications and a very poor infrastructure remained a big barrier to tourism.  By 1998, the Lao government had relaxed visa requirements, introducing ‘Visa on Entry’ at Vientiane’s Wattay Airport and the Friendship Bridge.

The Lao government views tourism as a foreign currency generator and official statistics put tourism as the country’s top export earner (WTO/UNDP,1998).  The Lao Government’s Board of Investment encourages investment in tourism and to date, there are a few joint venture programmes in the country.  The approach of the NTO (The National Tourism Authority of Lao PDR – NTAL) and tour operators has been fairly typical of less developed countries – approved itineraries and programmes marketed to wholesalers and an NTO whose role is more administrative than proactive.  Destination marketing is not well organised, indeed the role of the NTAL is more one of registration of tour operators and hotels than actively marketing the country.  The ‘Visit Laos Years 1999 – 2000’ are hardly known outside the country and fall as a dim shadow to neighbouring Thailand’s highly lavish Amazing Thailand 1998 – 1999 campaign.

Laos received approximately 500,000 tourists in 1998.  (NTAL, 1999) Of those, 370,000 or so were border tourists, most from neighbouring Thailand – probably as day trippers and visits to relatives.  Of the remaining 130,000, possibly half of those were business travellers, aid workers and people traveling to Laos to renew visas for other countries.  This left approximately 65,000 ‘real’ tourists.  The total tourism revenue for Laos was $75M for 1998 (NTAL, 1999).  Laos is a charming country that is rich in culture, nature and has specialist interest as an ex French colony.  Having no beaches, it is not a Sun, Sea and Sand destination.  There are no package tours, and most visitors seem to be highly educated, professional and managerial although no data has been compiled to support this.   Most of what Laos has to offer falls within the areas of nature based, ecotourism, adventure travel and cultural tourism.  In this respect, the entire country could be viewed as an excellent ‘ecotourism’ destination.  On the negative side, there is little infrastructure and a limited number of arrivals by air.  The Friendship Bridge is not always convenient for international tourists.  The reputation of Lao Aviation is not good, having been the victim of travel warnings from a number of overseas governments (UNESCAP, 1999).  Whilst the claims of the airline being unsafe have yet to be proven, the reputation of the airline has been seriously damaged and some operators will not book internal flights.  In 1997Discover World Inc, a major subsidiary of the Japanes giant JTB suspended tours to Laos based on the Japanese Ministry of Foreign Affairs warning on travel to Laos (Iiad, 1999).  The biggest problem however, is that very few people have even heard of the the country – recent research showed that few Australians, for example knew of the country, many thought it was in Africa. (King, 1999)

The resources of the NTAL are very limited.  The staff is not very experienced in marketing to overseas customers, however the situation is improving.  A WTO / UNDP plan for marketing has recently been completed, but the plan relies on advertising and promotional budgets that the country simply does not have. (WTO/UNDP, 1999)

Traditionally, NTOs in the Greater Mekong Subregion (GMS) have used the normal routes to promote their products – trade shows and wholesalers.  In itself, not so much a problem, especially in developed nations, but with Laos, as with other GMS destinations there are several problems associated with this approach.  

1. There is little knowledge of the product down the supply chain from wholesaler to high street travel agent.
2. High street travel agents have a fear of selling the unknown.
3. There are very few specialist high street agents.
4. There is a long time factor of about 18 months in bringing the product to the marketplace.
5. Products can be turned on or off instantly by wholesalers.
6. There is a lack of control – all the power is in the hands of the wholesaler.
7. Financial leakage can be great.

The paper concentrates on these last two points, control and leakage.  Leakage is the amount of money generated overseas from a sale that does not reach the host community and can be as high as 90% (Lindberg, 1998)  A typical example from Laos follows and is based on published tariffs:

Hotel in Vientiane, rack rate (walk in/book direct) $25 /room / night

Bangkok based wholesaler sells this room to travel agents overseas for $41 / room / night

Overseas travel agent marks up this room, say 15% to $47.

Leakage is 47%, based on the rack rate, however we do not know the rate at which the hotel sells its allotment to the wholesaler.  We can safely assume that the leakage in this case would be well in excess of 50%.

Within the business of selling packaged tours, the problem is similar.  A typical one week tour retailing in the US for $1,200, would be sold from Laos for about half that figure.  It is, of course, fair to argue that the wholesaler and travel agent supply chain does the job of destination marketing, and promotes the product in markets that the host nation operator is unable to do.  However, there remains an option whereby operators can deal directly with FIT customers, resulting in the reduction of leakage.  As long as the operators do not undercut the high street travel agents this option is fair to the wholesalers.  The collapse of the supply chain can have a number of advantages to LDCs:

1. Less may equal more – fewer tourists, spending more with local operators will allow greater revenues, whilst handling less individuals.
2. There is far less demand on an often non existent, or unsophisticated infrastructure if there are less travellers.
3. Empowerment – the local operator has more control of his destiny.
4. Badly needed cash is put directly into the community.  
5. Rate of exchange fluctuations become less of an issue.  In 1997, one major Thai wholesaler claimed that he made more from currency devaluation than from trading (Shepherd, 1998).  This method of doing business has no part in the development of tourism in LDCs.

The local operators and NTOs in LDC have a number of options to collapse the supply chain.  Firstly, dealing directly with independent travellers (FITs), through direct marketing, advertising and the use of the Internet -synergy between the parallel growth in ecotourism and the Internet is well documented (Mader, 1998).  Second, FITs such as backpackers can be encouraged – backpackers often put more money directly into the host community although cultural sensitivity has to be treated with care (Luther et al, 1998).  In Laos, backpackers will stay in locally owned guesthouses, eat local food, and travel on local buses.  Finally, specialist agents can be identified and dealt with directly, without the need for wholesalers who traditionally package hotels and ground transfers and tours that are easier to promote to mass markets.

The promotion of Laos, by the NTAL and tour operators / hotels has been encouraged by the establishment of a Visit-Laos website and associated promotion.  The website is provided by the private sector at no cost, but endorsed by the Lao government as the ‘official’ website.  Funding comes from sponsorship and advertising.  A number of low cost strategic marketing points have been established and are many are currently being implemented to help promote tourism.  All of this work is provided by the private sector and attempts to push enquiries to both the website and individual operators.  These strategies include, but are not limited to:

1. The website itself, and associated website Laos-Travel.net, acting as a pointer to the Visit-Laos.com website.  Search engines, whilst often good are only as successful as the data that is entered for a search.   A recent report showed that ‘international leisure travellers use a website after they decided where to go’ (PATA, 1999)- bearing in mind that the country is relatively unknown, search engines may well not be the best method getting to the information for the end user.
2. A postcard campaign has been launched to media that covers Indochina and South East Asia.  The postcard – a full colour image of the website’s home page encourages media and other recipients to visit the website and find out more about the country.  Publicity in traditional print media and television will educate the traveling public about the destination.
3. Links from other non commercial sites covering travel in Asia have been encouraged.
4. Press releases are planned from the website, informing media, agents and other interested parties of tourism activities in Laos.
5. Targeted email lists are being established.  These lists will be compiled from people who have visited the websites and other travellers who have registered at other websites for information about travel in Indochina.  Purchasing email lists from organisations in being investigated, but the danger of ‘spamming’ is also being seriously looked at.
6. The country and its websites are being promoted through specialist private subscriber only newsgroups.
7. Specialist tour operators and adventure clubs are being contacted to make them aware of tourism potential in the country.
8. In the US NGOs can in some cases, offer tours to tourists that are tax deductable – this option is also being investigated.  The conditions of such a tax deductible holiday is only that locals should benefit directly from the tour.

Internet access in Laos is a relatively new thing and most operators have little understanding of the power of the Internet.  To this end, it has been proposed by UNESCAP, that training in the use of the Internet be encouraged in Laos.  Currently, a proposal is being prepared that will set up private sector and donor agency sponsorship of such courses to be held at the Mekong Institute in Thailand.

Conclusions

The empowerment of the NTAL and local tour operators and hotels will help to encourage tourism, especially ecotourism in Laos – such tourism may well result in greater revenues with less of an impact on the fragile infrastructure.  Operators should be encouraged to be more independent of agents and wholesalers through intensive training in the use of not just the Internet, but also other methods of marketing tourism.  

References

Iida, Y (1999) Approaching the Japanes Market, UN-ESCAP Seminar on Tourism Promotion in Lao PDR.  UNESCAP, Bangkok

King, B. (1999)  How to approach Major Travel Markets – Australia, UN-ESCAP Seminar on Tourism Promotion in Lao PDR.  UNESCAP, Bangkok

Lindberg, K (1998)  Economic Aspects of Ecotourism, p 105, in Ecotourism – A guide for Planners and Managers, Vol 2, The Ecotourism Society, 1998

Luther, HU., Faltin, G., Erber, G  (1998)  Backpackers: A Niche Market, in Entrepreneurship and Development, Lao-German Economic Training and Advisory Project, Vientiane.

Mader, R (1998) Marketing Ecotourism on the Internet. 8th Annual World Congress for Adventure Travel and Ecotourism, held in Quito, Ecuador, October 1998.

NTAL (1999) 1998 Statistical Report on Tourism in Laos, NTAL Statistics, Planning, Marketing and Cooperation Division

PATA (1999) USA Report (pp 26 – 28), Menlo Consulting Group, USA

Shepherd, N (1998) Ecotourism in Thailand – Where Does the Money Go?  Institute of Ecotourism Third Conference, Bangkok, 1998.

UNESCAP (1999) Seminar on Expansion of Tourism in the Greater Mekong Subregion Through Improved Air Transport, Vientiane

WTO/UNDP (1999)  Support for Tourism Development and Ecotourism, National Tourism Marketing Plan for Lao PDR.  UNDP, Vientiane

WTO/UNDP (1998)  National Tourism Development Plan for Lao PDR.  UNDP, Vientiane

Institute of Ecotourism, Srinakarinwiroj University, Thailand – Third International Conference – ‘Community Based Ecotourism”

July 13 – 14 1998, Bangkok, Thailand

Noah Shepherd, Faculty of Hotel and Tourism Management, Prince of Songkla University, Thailand

Governments view tourism as a practical source of foreign currency earnings. In the case of developing nations, these invisible exports can form a considerable proportion of a nation’s export revenue. In the case of Thailand, tourism is the nation’s largest single source of foreign currency. The nature of the tourism industry gives operators an ideal opportunity to channel revenues directly into local communities, however, this is not always the case.

Examples of ecotourism operators in South Thailand are used to show how in some cases, revenues remain overseas and in others, how revenues are retained in the host nation through niche marketing. The role of the travel agent and wholesaler is discussed and the nature by which these middlemen are responsible for a considerable reduction in host nation revenues.

The paper focuses on activities in the tourism industry from the time of the Asian financial crisis (July 1997) to July 1998. During this period, the Thai Baht collapsed from a fixed rate of 25THB:$US to a relatively stable level after about six months of 40THB:$US. At its worst, the Baht was trading at almost 60THB:$US. At the same time as the start of the currency crisis, the Tourism Authority of Thailand (TAT) launched its Amazing Thailand campaign for 1998/9 (1).

The campaign, planned in advance of the financial crisis, aimed to attract 17 million visitors to the kingdom and generate 600 billion Baht in revenues. This target related to a 7% increase in visitor numbers on 1997. Of those visitors to the kingdom 60% were from Asian countries – almost all of which had been hit by the currency crisis. By the end of quarter 1 of 1998, Malaysian arrivals were down 6% (2). The significance of this was that whilst Malaysians visit the kingdom for shorter periods of time than Europeans, the Malaysian marketplace, in terms of tourist arrivals is bigger than that of Germany, Austria, Switzerland and Scandinavia combined. Similarly, the Japanese market, down 7%, represented arrivals equal to that of the UK, USA, Australia, New Zealand and Canada combined. In this case, however, the length of stay by Japanese in Thailand was much longer than that of Malays and the drop in arrivals was extremely significant. Worst affected was the Korean market, which was down 80%.

The TAT was in an impossible situation, because of the financial crisis, it faced massive budget cuts of a billion baht, which would certainly affected promotion of the Amazing Thailand campaign. The reality was that following the collapse of the baht, a 60% increase in tourism arrivals was required to stand still in true US dollar terms – something that was completely unrealistic.

The start of the high season was marred by bad publicity. The smog from Indonesian farmers ‘burning off’ scrublands in Sumatra hit south Thailand for just three days. CNN reported severe smog in the region despite the fact that this was confined to Indonesia and peninsular Malaysia. Several wholesalers reported initial bookings as down for the season as a result of these reports (3).

By January, arrivals from Europe seemed to be higher than the previous year. This, in the initial stage was not due to the cheap baht, but to an increase in package holidays and charter flights, especially from Scandinavia. As, an example, Swedish holiday companies had run a massive ‘Thailand’ campaign that autumn which had been very successful.

At the beginning of 1998, the Bangkok Post (4) suggested that the cheaper baht was not affecting interest in travel to Thailand. However, as far as Phuket was concerned, there certainly was a considerable increase in tourism numbers based on the following evidence in advance of official figures from the TAT:

Local travel agents, hotels and ground handlers were reporting a very busy high season.

Overseas travel agents were selling Thailand as a “value for money” destination, although prices of package holidays had not dropped.

A considerable increase in the number of charter flights at Phuket Airport was noted.

A survey of 250 western tourists was carried out on Patong Beach, the major resort town of Phuket (5) on 14^th January 1998. Of those surveyed, one third said that the cheap baht was a deciding factor and almost all said that they found Thailand to be “cheap” or “reasonable”.

Ten of south Thailand’s more experienced ecotourism operators were also surveyed and reported between a 30 – 40% increase in revenues. However, in these cases, some were charging in Dollars, some in baht. The increase was not clearly as a result of numbers, but in some cases as a result of prices quoted in dollars, and revenues received in baht at a different rate of exchange to the previous high season. What made many of these operators different however, was that several of them did not use wholesalers or travel agents to market their products.

The TAT ran a campaign in January to the travel trade to take advantage of the cheap baht. The campaign referred to “Sunny clear skies… warm smiles…hot discounts…47 baht to the US Dollar – Amazing Thailand, Amazing Value” (6). To the public, the TAT’s Value for Money ll campaign

promoted “Happy Hour in Thailand – Your pound now buys 59% more in Thailand” (7)

The Thai hotel industry, which is highly leveraged, was very badly hit by the devaluation. Room bookings may well have been up, but costs of electricity, directly linked to the dollar and oil prices were hitting their bills for air conditioning, in one of the hottest countries in the world. Imported goods, cost of foreign staff and overseas marketing costs were also badly affecting margins. These increased overheads were nothing compared to the cost of servicing their loans.

The first problem that hotels had to face in mid 1997 was the increase in VAT from 7% to 10% as part of the government’s austerity measures. Wholesalers insisted that the hotels absorbed this tax increase. The hotels held contracts with wholesalers, which used the previously stable Thai baht, negotiated in 1996 and early 1997, long before devaluation. The 1997/8 catalogues of holiday companies, showed prices in overseas currencies that related to old exchange rates. The wholesalers insisted that rates remain in baht, with no savings passed on to customers – who were paying in Pounds, Marks and Francs.

Many hotels announced that they would negotiate future contracts in US dollars (8), a point that angered the large wholesalers. One Bangkok wholesaler, in early 1998, claimed that his company was making more from the currency spread, than they were from trading. Others, trying to justify their position, claimed that they had bought currency forward to pay for their contracts.

The issue of charging in hard currency was introduced to the public by some hotels who introduced a ‘walk in’ rate in US$. Reports in the press suggested that the traveling public were not pleased with being charged in two currencies (9), however the trade argued that this was standard practice in many countries such as the Philippines, Indonesia and Vietnam. Some shops also started quoting prices is $US, but this was short lived.

On a smaller scale, some of the local ecotourism operators had an advantageous position because of the demographics of their own customer base. In 1997, 74% of frequent travellers who took active or nature based holidays in Asia possessed one degree or more, had a mean income of $82 K and more than three quarters of them took more than one holiday a year (10). This was a very similar profile to that of the earlier computer nerds who were the initial users of the Internet, and such people were more likely to be independently seeking their own holidays, taking an active part in the selection of destination and operator. The key was that those customers dealt directly with the operator, and paid in hard currency.

The Adventure Travel Society reported a 12% per annum growth in outdoor/adventure/eco type holidays (10). The Society attributes this growth to many factors, including more women travelling; people living longer; people travelling further afield and more frequent air services. Other sources (11,12,13) refer to growth in this field claiming opportunism and the greenwashing of nature based tourism. Whatever the reasons, this type of tourism is certainly gaining increased popularity.

In Phuket, ecotravel operators reported a definite trend of increased business, that seemed to be linked to increased general travel. It is fair to assume that this was as much a result of the increased popularity of the destination as anything else.

A WWF survey in Malaysia in 1995 (13), showed that ecotourists spent more cash in country than any other form of tourism. As a niche market, it is possible for ecotourism to capitalise on this by dealing directly with the client and avoiding the middlemen.

Agents and wholesalers may take 20% commission for booking tours although in some cases, this may be as high as 40%. Whilst, in most cases, sales tax or VAT is not payable for holidays taken overseas, this commission percentage is actually increased by the true costs of marketing to agents. Free inspection or familiarisation trips (FAM trips) are expected, not only for the buyer from the agency, but for many of their staff. Whilst this is sensible for agent education and product knowledge, the travel industry is built on a reputation of favours and expectations of free trips. This rubs off on the smaller operators, especially those who organise small groups who frequently experience unreasonable demands for FAM trips from wholesalers for friends, family and staff not directly involved in the selling of the programme. In addition to this, exhibiting and travelling abroad (all of which are hard currency costs) are expensive, but necessary to market to the traditional agency/wholesaler chain.

Considerable financial leakages can arise when comparing a tour product sold locally with another tour product sold overseas, the picture can be quite frightening. In the case of sea kayaking in Phang Nga Bay, Thailand, one tour operator sells its product locally to agents and tour representatives which are sold to mainly European tourists already ‘on island’, the other sells their product locally which is resold overseas in Taiwan

	Operator 1	Operator 2
Gross selling price to end user	2970 Baht	4000 Baht
Money received in	Phuket	Taiwan
Net selling price to wholesaler/agent	2376 Baht	500 Baht
Local agent net revenue	594 Baht	500 Baht
Retained in Thailand	2970 Baht	1000 Baht

Operator 1 manages to sell a tour locally, retaining all revenues in country. Operator 2 sells cheaply to a local wholesaler, who, after adding on his markup, sells the product to an overseas agent, who charges the end user 4,000 baht (in Taiwan). This is an extreme example of such a case, but is very common, especially in the Asian group tour market.

Direct marketing of ecotourism products to end users is not an easy task, and in many cases, may require specific skills training. The use of specialist direct marketing, Internet web sites, mailing lists and PR may is alien to many ecotourism operators. There may be little knowledge of overseas market places and language too may also be a barrier – a product will often be sold a different way in each different market. There are also the problems of dealing with remittances from overseas which can be complicated. Taking all of these points into consideration makes the apparent simplicity of using a wholesaler immediately clear.

In conclusion, niche market products, such as ecotourism can benefit from selling directly to end users because of the affinity between operator and traveller. Selling directly allows the operator to dictate selling price, in whatever currency he chooses. Such a direct sale will reduce leakage and benefit the host nation far more than dealing through an overseas wholesaler. In the case of the Asian economic crisis, operators, through niche marketing of niche products can successfully ride out the recession.

References

Janarat, Jutamas and Williams, Lesley, Preconditions for Successful Collaborative Tourism Marketing: The Critical Role of the Convener, Third International Conference – Tourism and Hotel Industry in Indo China and Southeast Asia, Phuket, June 1998.

Phuket Gazette, International Arrivals Post Gain June 1998, p 3

Bangkok Post Economic Review Year End 1997, January 15^th 1998, p 10

Bangkok Post, January 2 1998, Business p 1

Unpublished survey of Phuket tourists – 2^nd year students of the Faculty of Hotel and Tourism Management, Prince of Songkla University, Phuket Campus.

Tourism Authority of Thailand Advertisement, Travel Trade Report, January 12, 1998, p12

Value for Money Campaign, Tourism Authority of Thailand, Bangkok Post, June 30^th 1998, p 7

Travel Trade Report, Thai Hoteliers falter over decision to quote dollars, January 12^th 1998

Bangkok Post, Dollar Change Irks Tourists, 19^th January 1998

Rosci, Frank; Soft or Hard Adventure, ASTA Agency Management, December 1997, p 40

The Economist, How Green Can You Get? A Survey of Travel and Tourism, January 10^th 1998, p 16

Gray, John; How Green is your Ecotour, Sawasdee January 1998

Shepherd, Noah; Educating the Traveling Public and the Investor, Proceedings of the 9th PATA Adventure travel and Ecotourism Conference, Kota Kinabalu, Sabah, 12 – 15 January 1997