Southeast Asia’s biggest tourism hub is fully open to travelers again - and the stakes for success are high. The Tourism and Sports Minister of Thailand recently said foreign tourism could bring in 3 trillion baht ($87 million USD). That’s 18% of the country’s GDP.
International tourism is the main driver of Thailand’s tourism economy. Travelers from other countries typically make up a smaller percentage of tourism overall, but account for much more overall tourism spend. McKinsey research shows that in 2019, international travelers made up 33% of overall travelers in Thailand, but accounted for 60% of total tourism spending. International tourists spent $1,543 per traveler on average, compared to $152 by domestic travelers, according to the research.
That money quite obviously can’t come into the Thailand economy if travel providers, many of whom are in the adventure travel industry, can’t get paid – a problem travel providers are working hard to head off.
That’s because regulations around financial services and payments are changing in Thailand and moving fast. Some incumbent payment providers and processors based overseas aren’t yet measuring up to the country’s complex and stringent regulatory requirements. Thailand attracts visitors from all over the world, and travel providers know they risk losing business if they can’t accept the payment method the traveler prefers to use. For instance, taken as a whole, digital payments in Thailand are four times more frequent than they were before COVID-19, according to Reuters. And globally, travel payment preferences have changed since COVID-19 as well. Our data shows that some 90% of international travelers prefer to pay for trips in their own currency, and 70% say ease of payment actually influences their choice of tour operator.
We’re seeing many adventure travel providers act now to head off potential issues with international payments, taking advantage of the time before the busy cool and dry tourism season (the best time to visit Thailand) between November and March.
Thailand’s evolving financial services and payment landscape reinforces a few things when it comes to travel payments, and stresses the importance of:
- offering travelers choices when it comes to payment methods and currencies
- offloading the complexities of payments to best-in-class providers to ensure payments processes are secure and in compliance with local regulations
- offering options with clear fee structures and competitive rates in light of macroeconomic issues
First, we see from Thailand something that is applicable to lots of international tourism hubs – the regulatory environment is evolving and new payment methods and preferences are changing quickly. The last thing a travel provider wants is to lose potential business because they can’t accept the payment method or currency a customer wants to pay in – or can’t accept payments in multiple currencies at all. By working with providers that ensure access to many different types of payment methods and offering options in local currencies, redundancies ensure international payments can be made, processed and received even in regulatory environments that are in flux.
The situation also shows how important it is to work with payment providers that are deeply knowledgeable of local banking regulations and local laws, as well as have the highest levels of certifications when it comes to ensuring payment security and data privacy.
What’s more, just as the global travel economy kicks into gear, inflation threatens to dampen the impact. The good news is that so far, travelers seem bullish on spending on international travel – but we expect that minimizing and clarifying fees for both clients and your own business when it comes to accepting payments will matter. As one example, when accepting international credit card payments, some payment gateway providers bundle fees and pass them on to the merchant as a flat one. Unwinding exactly what’s in there – and how much more it increases the overall cost of the transaction both for you and your customers – can be challenging. It’s crucial to understand the total cost of payment so that you’re picking a payment provider with the most competitive processing rates.
Adventure travel and accommodations providers in Thailand know that having the right payments infrastructure is one of the many keys to Thailand’s travel international resurgence and the revitalization of the economy – where 11% of the workforce is employed in the travel industry (4.5 million jobs from a workforce of 38 million people).
Need help with travel payments in Thailand or another market with evolving regulations? Request a free travel payments assessment from Flywire.