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Thailand Tourism Industry PESTLE Analysis

Info: 1435 words (6 pages) Essay
Published: 6th Jun 2017 in Economics

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Recently globalisation has been influencing on the business all over the world and many countries have invested and been invested. However, there are many factors that effect on the international business. On this assignment, it will illustrate some external factors by using PEST analysis and some examples that are related to the tourism industries especially Thailand tourism industry due to giving the clear pictures.

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Firstly, political factors are crucial factors towards the stability of industries or organisations such as terrorism, demonstrations, corruption, etc. (Czinkota et al, 2009). Every country has their own law enforcement in particular parts such as corruption, working system, terrorism, immigration, etc. (Brooks et al, 2010b). There are many examples such as the illegal immigration, working overtime without paying money, hazardous waste by factories. Not only does it impact the image of tourism, but it also destroys the beautiful sceneries and environment.

For example, the tourism industry in Thailand has been a detrimental effect by domestic political tension that is the big two groups called yellow-shirt and red -shirt. The main problem is originated from the different believes in politics of Thai people. According to Thaiwebsite (2010), in November 2008 yellow-shirt demonstrated and closed the Suvarnabhumi Airport which was the main international airport in Thailand.

On the other hand, the red-shirt protested at the East Asia Summit that was held in Pattaya. Another unpleasant situation happened in March of this year when the red-shirt closed the main intersection at the centre of Bangkok. Three big department stores and small shops around that area had to close their businesses because of the jeopardy. Moreover, the red-shirt fought with Thai army, bombed and fired the department stores. From these situations, European and Asian Countries warned their own citizens not to come to Thailand because of uncertain situations (CNNGo, 2010). Therefore, the number of tourists was a dramatic declined from last year and it affected Thai economic especially the international investment. The tourism industry ceased growing in a short period of time and then it has steadily recovered.

Secondly, economic factors are the key factor of all businesses. After World War I happened, it affected the economic around the world and it leads to an economic crisis. As a result, all countries were in big troubles such as the loss of consumer confidence, bankrupt, unemployment and the high risk in investments. Moreover, it has been the dreadfully economic cycle. For instance, the bubble economy was one of the most serious economic crises in Thailand in July, 1997. That caused the Baht currency exchange rate to be floated (Petprasert, 2000). Even though Thai Government at that time solved this problem by borrowing money from International Monetary Fund (IMF) (Chalamwong, 1998), many domestic companies went bankrupt and international companies stopped conducting businesses in Thailand due to unstable currency. Additionally, the export businesses and the tourism industry had been the most terrible effects because there were a massive number of unemployed people. Nevertheless, Thai economy has been recovered gradually since 1997 owing to the government policy. Because of it, the domestic economic was activated in order to compensate the international incomes.

Thirdly, social factors which relate to three aspects including the changing of family relationships, the changing lifestyles and health (Brooks et al, 2010a). To illustrate the point, nowadays the healthier lifestyles are becoming popular. In consequence of the trend change, tourism industry should have up-to-date information to enhance the business such as organic food, sport activities and health spa. In addition, it is true that people who live different countries have different lifestyles. Businesses will be highly successful, they should be harmonised with the lifestyle of local people such as cultures, customs, traditions, believes, religions, the ways of lives, environment, etc.

Besides, it is becoming more intended in today s world so as to show the social responsibilities which are more concerned by tourists. Climate change is the main problem that the majority of Thai people has worried about. The latest example of the impact of environmental change is Global warming which is a significant global problem. Nalinee Tongtaem, who works for Biological Centre academic, claimed that the coral reefs were dead twice or third as many as before due to the temperature change in the sea (MCOT online news, 2010). As a result, the number of tourists might be declined and this problem will not only affect the economic, but impact on our lifestyles. ???????????? ?????????????

Another example is the tsunami in 2004 which was the worst phenomena that has been happened to Thailand because a large numbers of tourists and citizens were died. Besides, the surroundings as well as the properties such as houses, hotels and shops were destroyed by the tsunami (United Nations Thailand, 2008). Although Thai government took responsibility for assisting people in their living and their properties, several tourists still concern about the same situation that might occur again.

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Additionally, the target group of Tourism in all parts of Thailand can be divided into 3 groups that consist of European, Asian and America market. It is considered that the number of international tourists has a tendency to decrease which affacts the national income of Thailand. Because of the fact that European countries are facing the economic crisis, European people are liable to economize by travelling in Europe countries rather than other countries. Furthermore, the Asian market which is the most sensitive tourist group is tending not to come to Thailand owing to the uncertain politic situation in Bangkok. However, the unemployed rate in America Market is still high. As a result, the number of tourists will become fluctuated.

Finally, technological factors have an effect on the improvement. If the government chooses the perfect techniques, tourism industry will be successful. In the twentieth century, many countries including Thailand pay attention to information technology in order to enhance and improve their countries. To give some examples, these are online booking, online shopping, online banking, the development of aeroplanes, etc. Recently, the number of tourists that uses online booking has been increased significantly. Thus, some travel agents might be overthrown because of few customers. In addition, there are many airlines that provide their services in the intensively competitive market especially low-cost airlines. This is an advantage for the tourists and it will be a good impact on the tourism industry. However, tourism industry in Thailand has not been well developed because of poor government support. Comparing with European countries, tourism industry in Thailand is underdevelopment. Consequently, it should be improved significantly.


In the next 5 to 10 years, it seems to be seen that tourism industry in Thailand might be a gradual increase. Because these factors as mentioned above will not be able to resolve easily in the short term, they are unpredictable factors such as political and environmental problems that all governments sometimes cannot control. From my prospective, a political factor is the most important factor because it influences on the other factors. For instance, if the government is incapable of controlling the political situations, it will have an adverse impact on the economic causing the domestic and international businesses suffer at the setback. Furthermore, it will lead to social problems which are unemployment, the financial problems, committing a crime respectively. Moreover, in case of the inappropriate policy, technologies might not be developed due to lacking of capital. Although, many people have concerned about environmental troubles, these cannot be solved if the law enforcement is not able to use appropriate owing to interfering in politics. For example, the influential person in politics uses the power arbitrarily to build the hotel near the sea without disposing of waste. The problem is the dangerous household waste from the hotels will destroy the local ecology and have impact on the natural environment. Thus, all these difficulties as mentioned above affact the investment in the Tourism Industries.


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