News Forum - AirAsia X disagrees with government’s proposed tourism fee

[Thaiger]

AirAsia X’s chief executive is disagreeing with the Thai government’s proposal of a tourism fee on flights. Tony Fernandes, the acting group chief executive of AirAsia X says, instead, that the government should bank on the influx of travellers as aiding the economy. He says the tourism fee would be a smaller impact on the economy than an increase in tourism. Since Covid-19 ravaged the company’s profits, Fernandes says it has rebounded strongly after completing a debt restructuring back in March. “We can restart at the right time as more countries are reopening borders, particularly Japan and South Korea in […]

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[palooka]

Think the Thai Govt is broke and desperate to get anything from anywhere.

[Ramanathan.P]

Mr.Tony....No point in talking when you never pay back all the money that you have collected in advance booking way back before pandemic. Be a responsible person and repay all that first. People are not interested in your credit travel hours.

[longwood50]

  On 9/8/2022 at 4:17 AM, Thaiger said:

Tony Fernandes, the acting group chief executive of AirAsia X says, instead, that the government should bank on the influx of travellers as aiding the economy

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Government never has any business sense.  Businesses run sales, discount coupons, and even sell products at a loss in order to drive traffic into their stores knowing they will make it up with increased volume.   

It is said the average tourist coming to Thailand spends 48,580 baht while visiting.  Assuming all of that is suject to the 7% VAT that is 3,400 baht in lost taxes.  Now I can already hear the cries, oh nobody will mind about only 300 baht.  The point is, the government if it was smart, and really wanted to increase revenue it would be enacting policies to encourage more travelers not discourage them, no matter how small that might be. 

The money spent by the tourist is guess what, spent again, and more VAT, and that in turn is spent again and more VAT.  It is called the multiplier effect.  The policy makers can only see the 300 baht gained, and not recognize the lost VAT because that is invisible. 

 

https://www.thaiwebsites.com/tourism-income-Thailand.asp

[Mazz11]

  On 9/8/2022 at 6:08 AM, longwood50 said:

Government never has any business sense.  Businesses run sales, discount coupons, and even sell products at a loss in order to drive traffic into their stores knowing they will make it up with increased volume.   

It is said the average tourist coming to Thailand spends 48,580 baht while visiting.  Assuming all of that is suject to the 7% VAT that is 3,400 baht in lost taxes.  Now I can already hear the cries, oh nobody will mind about only 300 baht.  The point is, the government if it was smart, and really wanted to increase revenue it would be enacting policies to encourage more travelers not discourage them, no matter how small that might be. 

The money spent by the tourist is guess what, spent again, and more VAT, and that in turn is spent again and more VAT.  It is called the multiplier effect.  The policy makers can only see the 300 baht gained, and not recognize the lost VAT because that is invisible. 

 

https://www.thaiwebsites.com/tourism-income-Thailand.asp

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Longwood50, I agree with your appraisal of the compound effect of tourism dollars spent and VAT.

On a side note, I find it interesting that Oceania (which is basically Australia, New Zealand & Hawaii when you talk about tourists who can afford to travel) has the second highest total expenditure per tourist in Thailand.

I guess that the reason China & India are such sought after tourism markets is the quantity of tourists coming from those areas rather than their spending capacity. 

[longwood50]

  On 9/8/2022 at 7:37 AM, Mazz11 said:

I guess that the reason China & India are such sought after tourism markets is the quantity of tourists coming from those areas rather than their spending capacity. 

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Yes, with both of those countries being relatively close so travel cost is less of a concern and having huge populations.  I know this, when businesses do well, the citizens of a country do well, and the government coffers are filled.  

Now you can tax incoming tourists at 100 baht, 500 baht,  5,000 baht or 100,000 baht the only thing changed is the amount of disincentive.  

Consider they just announced an increase in the alcohol tax and part of their rational was to discourage alcoholism by making it more expensive.  So yes, you subsidize things like electric cars, or wheat  production that you want more of and you tax those things like gas guzzling cars, cigarettes and alcohol you want to discourage. 

So if the government was smart they would be targeting those regions that bring in the most and the highest spending tourists and fill the taxis, hotels, restaurants, bars, and tourist attractions and make every one more money.  All this accomplishes is giving the government some money but forgoing even more from the tourist who doesn't come and punishing the citizens who rely on tourism for their livelihood.  That is why politicians for the most part are never former businessmen.  They think somehow that their policies have no adverse consequences and can not think like a businessperson who knows that volume is good. 

[Guest1]

  On 9/8/2022 at 4:58 AM, Ramanathan.P said:

Mr.Tony....No point in talking when you never pay back all the money that you have collected in advance booking way back before pandemic. Be a responsible person and repay all that first. People are not interested in your credit travel hours.

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But at least they extended the initial 2 years validity to 3. Without you had to ask for it. That is better as some European airlines offers! That should count for something, shouldn't it?

[Guest1]

I actually don't really think, it is Air asia X view that is the real reasin.

Just 300 Baht are easy to hide in the ticket prices of air Asia X flights, usually.

I think the main concern is that if there are more people on one booking, if one only is a Thai or Non Thai, will have spot able different prices for the same journey.

AND Air Asia is making a lot more volume with short haul flights from neighboring countries.

They are hiding (did, pre covid) the 700 departure tax in 1000-1500 baht outbound flights, but now to hide 300 inbounds, too, makes it even more pricey, as it usually would be. And 300 baht on a 1000-1500 Baht price is 20-30%!

Would be easily under 10 or 5% on most X-flights, if I remember that right

So my guess is that Tony has all Air Asia flights / passengers on the display.  But mainly KL / Malaysia to Thailand! 

[Venusianhart]

Guy who knows how to turn a buck shaming the lazy self elected dozy halfwits with bottomless pockets and handfuls of "gimmie".