Bill Barnett, managing director of C9 Hotelworks, said yesterday that in the year following the 2004 tsunami, guest arrivals in Phang Nga fell sharply to fewer than 300,000. But in a remarkable sustained upswing, the figure rose to 962,020 last year and is expected to break the 1-million mark this year.

C9 Hotelworks says the key drivers of this upsurge are Chinese and Australian visitors, adding to the European guests who still dominate the market with 80 per cent of arrivals, resulting in a new wave of hotel development.

Khao Lak has 104 registered accommodation units with 7,822 keys, which pales in comparison with neighbouring Phuket with close to 50,000 rooms.

However, over the past five years, the destination has grown 16 per cent a year, a performance not gone unnoticed by both Thai and foreign hotel developers, which are putting 1,213 guestrooms into the pipeline.

Barnett said the upcycle in tourism was highlighted by the planned return of Bill Heinecke’s Minor Hotel Group and the coming onstage of more international brands such as IHG’s Holiday Inn.

“Geographically within Khao Lak we are seeing the push north for the newest and larger resorts, with Bangsak in particular seeing a number of large-scale properties.”

Winter visitors from European countries, especially German-speaking nationalities, have been the legacy market. These tourists in fact the main drivers of the destination in the period after the tsunami.

By 2006, foreign visitors eclipsed domestic demand for the first time and the trend has grown ever since.

“Over the past few years, Khao Lak has attached itself to Phuket’s fast-rising airlift and China and Australia in particular, with strong arrivals in the traditionally lean summer months, driving the growth and market maturity as it becomes a year-around market as opposed to the disruptive seasonality it used to be known for,” Barnett said.

Other key emerging markets such as Japan, South Korea, Malaysia and Singapore are key catalysts of change.

“Khao Lak has been able to attract an increasing number of visitors from nearby Phuket who have destination fatigue and are disconnected by the widespread urbanisation of the island’s resort atmosphere.

“Though the destination is firmly connected to the bigger Greater Phuket infrastructure including the soon-to-open expanded airport, in the long term Phang Nga will have to develop its own gateway airport in order to control its own tourism destiny.”

Currently, Invest Hong Kong operates 29 offices worldwide, covering all major economies.

“For Thailand, we aim to boost investment [in Hong Kong], especially in agricultural products and food processing as the country is a global food production base. Hong Kong can be a regional hub of for the import and export of food products from Thailand,” he said.

Meanwhile, hospitality is another potential investment sector in Hong Kong, as the Kingdom is the biggest tourism market in Southeast Asia.

Ho said that when the Jakarta was opened for business in the final quarter of this year, it would bring huge opportunities for trading and investment from the largest country in Southeast Asia.

Invest Hong Kong recently signed a memorandum of understanding with Indonesian companies to expand their cooperation with the special administrative region, he added.

For Indonesia, the investment promotion agency is targeting e-commerce business in particular due to the country’s plethora of islands, plus the fact that the Indonesian government announced the promotion of small and medial-sized businesses supplying overseas markets with products made across the archipelago, he explained.

Invest Hong Kong also aims to attract foreign investment to mainland China, on the back of Beijing’s “One Belt One Road” initiative to draw investment from around the world, he said.For China, potential investment sectors include services, finance, trading, logistics and high-technology businesses.

“We will help foreign investors to negotiate with the central government [in China]. We are also teaming up with alliances in Hong Kong such as the stock exchange, logistics and shipping companies, banking and financial institutions to facilitate new investment,” the associate director-general said.

Vivien Lau, executive director of Hong Kong Air Cargo Terminals, said the company’s Hong Kong International Airport terminal currently utilised 4.3 million tonnes of its full capacity of 7 million tonnes, meaning it had plenty of room to provide more cargo services to customers from around the word.

The terminal served more than 100 air-cargo customers last year.

She said Hong Kong would start building a third terminal at the airport in August, with completion scheduled for 2023 or 2024.

Moreover, Hong Kong is constructing a bridge to link it with Zhuhai in mainland China.

“Hong Kong has already become the gateway into China for both shipping and air access. In the future, there will be a new bridge to help facilitate land transportation. These infrastructures will help Hong Kong and China attract more investment from overseas,” Ho added.

The Hong Kong Stock Exchange, meanwhile, is promoting its strength as a global financial hub and one-stop service centre for new investors eyeing investment in China, he said.

The Hong Kong government recently announced additional lower-tax schemes and the relaxation of regulations in a bid to boost investment on the mainland.

The forum aims to bolster cooperation among the 77 member countries and promote the sufficiency-economy model in the private sector.

Prayut said it was necessary to tackle the current problems of developing countries such as the widening income gap, exploitation of natural resources and pollution of the natural environment, social injustice, labour shortages and ageing populations.

“The Thai government has formulated a national reform strategic plan for the next 20 years to achieve |its 167 targets. The public is welcome to participate |in shaping Thailand’s future once reforms to tackle |political and social conflicts and disunity are in place,” |he said.

“We cannot have a true democracy on the founda-|tion of political and social conflicts that impede our |collective efforts to tackle political, economic and social problems. Thus, it is necessary for us to work within the military government’s framework, which will be a platform to achieve sustainable growth and development in all areas.

“It is important that G77 member nations move in the same direction together in turning policies and plans to realities,” he said.

“Inflation looks like remaining positive for the remainder of the year. Inflation in the third quarter is expected to be 1 per cent, and in the fourth quarter is projected at 2 per cent, resulting in a full-year inflation rate of 0-1 percent,” Somkiat Triratpan, inspector-general at the ministry and director of its Policies and Trade Strategies Bureau, said yesterday.

Inflation for the first five months of the year was negative-0.2 per cent.

Somkiat said the ministry would maintain its full-year inflation prediction at 0-1 per cent as factors influencing inflation, including oil prices, economic growth, and the exchange rate are expected to be the same.

This is based on an assumption that gross domestic product will grow by 2.8-3.8 per cent, the baht will range between 36 and 38 against the US dollar, and the price of Dubai oil will be $30-$40 per barrel.

In May, among the 450 items in the inflation basket, the prices of 193 products increased, 70 declined, and 187 were unchanged.

Last month, core inflation – excluding volatile fuel and food prices – was slightly positive, at 0.78 per cent year on year and 0.05 per cent month on month.

Core inflation in the first five months was 0.72 per cent, well under the average of Bank of Thailand’s estimate of 0.5-3 per cent for the full year.

“This rule limits airlines’ potential investors, thereby increasing the cost of capital,” it said at the opening of a two-day WEF-Asean conference in Kuala Lumpur.

“It also denies airlines the opportunity to use transnational mergers or foreign subsidiaries to achieve efficiencies of size and scope, to fully integrate their networks in order to offer passengers expanded route selections, and to benefit from knowledge transfer between management groups,” it said.

The rule, generally written into national law with variations among countries, usually limits foreign ownership of airlines to about 49 per cent. The majority of shares should be owned by nationals of the country where the airline is based.

Unlike airlines, airports in many countries have been successfully liberalised, allowing foreign ownership, the WEF said.

“Over the past few decades, countries have increasingly allowed their airports to be transformed from cash-starved, state-owned monopolies to privatised entities open to global investors,” it said.

“The change has brought in much-needed capital for infrastructure investments and allowed airports to reap the benefits of world-class management expertise and efficiencies of scale, resulting in improved financial performance.”

Tony Fernandes, chief executive officer of Asia’s largest budget airline AirAsia, said that allowing 100-per-cent foreign ownership of airlines would boost global travel and tourism.

Strict ownership regulations have led to AirAsia’s complicated business structures. The airline operates separate units for Thailand, the Philippines and Japan.

The European Union has taken the lead in opening up airline ownership, he said.

Meanwhile, Thailand is showcasing to the world market its potential to be a stronger economy and ability to become the centre of Asean during the WEF-Asean conference.

Commerce Minister Apiradi Tantraporn said that after the full integration of Asean late last year, the global community had paid much attention to the region.

“As part of the regional integration, thus, we will show our potential to become the centre of doing various businesses and investment.”

Not only government officials from each nation are taking part in the meeting, but also leading investors and businesspeople in the region.

Topics for discussion include “Shaping the Asean Agenda for Inclusion and Growth”, which will be divided into three subjects – driving sustainable growth, Industrial Revolution 4.0, and the strengthening of regional relationships.

Apiradi said the meeting would also discuss the future of Asean, the role of economic integration, innovation and the “digital economy”, energy, the revolution of manufacturing structure, and accessibility of sources of funds.

The ministry has amended the conditions for the double deduction, allowing projects that might not be completed this year to get the incentives, in order to ease worries over project construction periods and encourage the private sector to inject money into the economy, said Somchai Sujjapongse, Finance Ministry permanent secretary.

Speaking at a “Krungsri Business Forum”, Somchai said the government had attempted to drive gross domestic product through fiscal policy for the past six months, including investment in small projects, would attract private investment to follow suit. However, so far, that has not happened as much as the government expected.

The government will be kicking off mega-projects in the second half of this year, so the private sector should speed up their investment if they want to get tax incentives, especially the double deduction for expenses.

“They have no need to complete their projects this year but they must start them before the double deduction ends this year,” he told the forum, mostly attended by entrepreneurs.

GDP in the first quarter expanded by 3.2 per cent year on year thanks to the short-term measures of the government, he said, but this was only quantitative growth. Thailand should shift from quantitative to quality growth, starting from the second quarter.

He said the current policy interest rate and the flexible inflation-targeting framework helped ease worries for the government in preparing to implement such quality growth.

But to shift to the quality growth, the country needs help from private investment, he stressed.

“That is why we are going to ‘Thailand 4.0’ and selecting 10 key industries, because the government wants the country to exit from the middle-income trap by 2032,” he said.

By that year, monthly income per head should be Bt40,000 and low-income earners should earn at least Bt15,000 a month, while the Corruption Perceptions Index ranking should be in the top 10 and the Global Competitiveness Index score in the top 15, he said.

Dr Veerathai Santipraphob, governor of the Bank of Thailand, told the forum that the central bank was still embracing the flexible inflation-targeting framework to support the country’s growth.

Even though inflation is turning positive, he believes flexible targeting is the suitable tool right now to tackle market volatility. The BOT has other tools to tackle foreign-exchange volatility if the financial markets become more volatile from the expected US interest-rate increase, he said.

To support private investment, the BOT has embraced the second phase of capital-account liberalisation, he said.

Luxmon Attapich, Thailand senior economist at the Asian Development Bank, told the forum that the clear signal of government investment would bring in private investment, making the outlook for Thai economic growth in the second half better than in the first half.

The ADB has forecast Thai GDP growth this year of 3 per cent and 3.5 per cent next year. However, both are below the country’s potential of 4.5-per-cent growth.

The country’s failure to reach its growth potential is due to weak human-resource productivity, she said.