Thailand'S Hospitality Business And Culture.

Opening a business is neither easy nor difficult. So many things to be considered, including about where to open. It is very important because not only we should understand about the rules and regulations but also how the people in that area live, perceive, and believe. Understanding a culture makes us easier to predict someone’s behaviour, understand why someone does what he/she does, avoid causing offence, unite, create policies with standards, and aware of neatness and order. By understanding those aspects, we can decide what are the best ways to offer the products and services as they are one of the target markets that are easier to approach. Furthermore, it would be easier to communicate with the people in the workplace without causing problems as well as reaching an agreement in a suitable manner.Considered as 50th largest country in the world, not to mention 12th in Asia, Thailand is very popular among tourists. It is located in the centre of Southeast Asia and borders Myanmar, Laos, Cambodia and Malaysia to the northwest, northeast, southeast and south respectively.

Historically, Thailand was known as Siam and was an agricultural country until in 1960 more people started to move in and since then Bangkok, the capital, became a metropolitan area. However, situated in the tropical monsoon zone, it is surrounded with diverse ecosystems and therefore nature is still considered as one of the most important aspects. Besides ecosystems, Thailand is also full of temples as the majority of the people’s belief is Buddhism. It affects their educational system that emphasizes more to moral excellence, generosity and moderation. Officially called as The Kingdom of Thailand, it is a constitutional monarchy with monarch, in this case a king, as the head of state and prime minister as the head of government.

Looking at the tourism sector, it gives a great contribution for Thailand as according to World Travel & Tourism Council (2018) the national GDP breaks into more than20% as per 2017. Its chain is spread across Thailand and is extended not only in accommodation business but also in food & beverage and transportation sectors. Moreover, the number of people in Thailand who counts their lives on tourism reaches 5 million citizens as indicated by Ministry of Tourism and Sport. Based on those statistics, tourism is considered one of the important sectors in Thailand and the country itself is considered one of the top leading tourist destinations because of the variety of tourist attraction it offers as well as its competitive accommodation pricing that are more considerable and valuable compared to other Asia-Pacific countries.

Thailand is in the 4th place of being the most tourism-friendly out of 7 other South-East Asian countries. Main Factors that boost Thailand competitiveness ranking, based on The Travel & Tourism Competitiveness Report 2017 conducted by World Economic Forum (2018) are its low-priced accommodation options, natural resources, and tourist service infrastructure as it is ranked 18th, 7th, and 16th respectively out of 136 countries. Moreover, Thailand offers good choices of air transportation that are ranked 20th, as well as tourism prioritization and cultural resources and business travel with the rank of 34th and 37th respectively.

As indicated by Krungsri Bank of Ayudhya Public Company (2017), the demand of hospitality industry in Thailand tends to be high especially because of foreign visitors which is around 65% of the total tourist receipt. This gives more benefits to the country as the people from other countries contribute more on spending and on the period of time they are staying. From the total number of the visitors, Chinese tourists contribute more than a quarter number and is considered increasing compared to the year before. This is caused by the previous restrictions regarding travel overseas that are changed and are more relaxed as well as the number of low-priced direct airlines from China to Thailand and vice versa that are increasing. Another reason is that the number of middle-class societies in China is expanding that affects the demand for foreign travel. Looking at the European market, Russia shows the biggest number for the first time since 2011 reaching up to 1 million visitors. It also defeats United Kingdom which has been the most important tourist source for many years. As for the domestic tourism, there is an increase in the number of arrivals, although it is not as high compared to the foreign one. Moreover, it doesn’t give too much contribution as the domestic tourist spend lower and stay for a shorter period of time.

As for the supply, Thailand focuses more on what tourists from overseas prefer due to the number of visitors that are mostly international tourists. Previously, the main focus of tourist accommodation is in Bangkok which is the hub of tourism and travel. However, as there is a policy to build international airports in other most popular tourist areas in Thailand including Pattaya, Phuket, Chiang Mai, Krabi, and Koh Samui, Hotel businesses are following this issue and are expanding throughout those areas. This results an increase in tourist accommodation from slightly less than 300,000 rooms in 2000 to double number within the next year, both for accommodation operated by local people such as Centara, Erawan, Dusit, Onyx, and Mirror hotel brand and by people from overseas for example the brand Accor, IHG, and Starwood.

There have been some issues in the hotel industry in Thailand regarding oversupply during 2001 to 2014 because of the mis expected demand and supply. There is a fluctuation in the occupancy rate during the period and it tends to be in the lower side with the average of more than half of the percentage. On the other hand, investors built more and more accommodation not only hotels but also the ones offering daily rental such as apartments and condominiums because of a large number of tourist arrivals in the previous years. This happened regardless the law enforcement because Thailand is considered higher in corruption as it is ranked 96th in the Corruption Perception Index as per 2017 according to Transparency International. Furthermore, there was a slow movement in the economic side of the world in addition to the political conflict in the country during 2008 to 2011 affecting the growth of visitorw number coming to Thailand. However, in the following years Thailand managed to recover from the issues and the tourism sector achieved a large number of occupancy rates in the most popular tourist destinations including in Bangkok, Chonburi, and Phuket.

The national culture of Thailand is described by Hofstede (2001). As any other Asian countries, Thailand tends to be slightly higher in power distance with the score of 64. It means that the people expect and accept that power is distributed unequally between the less and more powerful members within an organization. The people in Thailand are more collectivist as shown in the index with the score of 20 in individualism. They value loyalty and strong, long-term relationship as they take care of fellow members of their group, not only the closest ones. They also tend to avoid losing face of each other as it is considered negative. In doing business, they put personal relationship first rather than discussing the business on first occasions. Furthermore, Thailand is considered the lowest in masculinity among other Asian countries with the score of 34, meaning that the people are less assertive and competitive as they value more of the quality of life. This also shows that, as a feminine society, the people are more traditional in terms of role in the population. In terms of facing the unexpected, Thai people are less open as they score 64 in the uncertainty avoidance. They tend to minimize it by adopting strict rules, laws, policies, and regulations in for the better of in group. Thai people are more of a normative society as it scores 32 in long-term orientation which tends to be low. It means that they value and respect traditions more while change in a society is considered as a suspicion. They also focus more on the present to achieve quick results.

As for the indulgence, Thailand can’t be determined as it scores 45 which means they are not too indulgent nor too restraint.Thailand’s cultural dimension is also explained by Trompenaars and Hampden-Turner (2012), stating that a country can be assessed into four additional dimensions such as universalism vs. particularism, affective vs. neutral, specific vs. diffuse, and achievement vs. ascription. Thai people are more of a particularistic, meaning that they value relationships and apply it to determine whether something is true and good and vice versa. This is applied also between employee and employer, as this kind of society is more loyal and committed. They are also more to be a neutral society that tends to avoid showing their feelings because it is considered to be unacceptable. A highly diffused society like Thai people don’t separate private and professional life as they treat their boss the same way at work and outside. Moreover, Thailand is more of an ascription-oriented, which means they refer status and hierarchy as “being” and prioritize who and what someone is.

In terms of working in an organization, Thai people are considered to be reactive. This means that they are more introvert, patient, calm, silent, caring, honest, thoughtful, and respectful. They listen more than talk, react more to other people’s proposals and timetable, avoid losing face of each other, confronting, and interrupting, and tend to have subtle body language. They work with flexible hours, tend to be not punctual and sometimes make slight changes in the planning. Reactive society is more people-oriented and considers all departments, counts on networks as well as delegates to reliable people. In terms of planning, they organize slowly, summarize well, and get information both from first-hand (oral) and statistics as well as reference books. They like to connect social and professional life.

Talking about doing business in Thailand, it is considered easy as it is ranked 26th out of 190 countries according to World Bank Group (2018). The easiness is given for the ones who want to start a business and should take care of electricity, registration of the property, need to get credit, pay taxes, enforce agreement, and resolve insolvency. The minority investors are also protected (Ibid, 2018).

In conclusion, there are great opportunities for expanding business in Thailand especially in tourism sector because it is one of the most profitable industries. The demand tends to be high especially from the international market, followed by the supply that is increasing. Even though there had been some economic and political issues affecting hospitality industry in Thailand, they had succeeded to solve the problems and now the sector is growing rapidly. It also offers easiness and protection for investors and business people. Expanding a business in Thailand would be a good choice, however a strategic planning is needed in order to fit the culture.

Applying an ethnocentric approach would be beneficial because Thai people is more of a reactive society that tend to adapt to partners as well as particularistic which means that they would be committed to either both the leader and the organization and parent company. Moreover, an additional polycentric approach would help in suiting Thai culture as the society tends to avoid uncertainty and changes. In addition, adapting to the culture would help in attracting domestic tourists as the number of arrivals coming from the country is considered low. Combining those approaches would be beneficial in expanding a hospitality business in Thailand. In addition, international investors that are planning to expand their business in the country have a good chance to compete in the industry as the most arrivals are coming from overseas, and therefore they must already have a better understanding about the market.