Thailand Tourism

Introduction

Located amidst a booming region, Thailand boasts one of the fastest growing Economies in Southeast Asia. Known as the “Land of Smiles,” Thailand has Enjoyed an abundance of good fortune as both domestic and foreign businesses rush to invest. From 1988 to 1994, Thailand’s Gross Domestic Product (GDP) grew at an average rate of 10%, and Thailand hopes to maintain a similar level of growth into the twenty-first century. Thailand has transformed from a traditionally agrarian economy to one focused on capital-intensive manufacturing, with an emphasis on promotion of advanced technology.

The volume of tourists coming to Thailand may not compare to the 27 to 50 million people travelling to France, Italy or Spain every year. Yet, when compared to other high-volume tourist destinations around the world, the growth and development of the tourism industry in Thailand is impressive. Egypt receives approximately 2.6 million tourists per year, while India annually draws in approximately 1.8 million tourists. By comparision, Thailand now accommodates approximately 5 million tourists per year, one of the highest figures for Southeast Asia.

WORKFORCE COMPOSITION

The formal economy now rests on a mix of agriculture, heavy and light industry, tourism, and services. Thailand also has a large illegal and informal economy; prostitution is a major element of this world. The informal sector possibly comprises over five million workers.

With a population of roughly 63 million, Thailand has 13.9 million agricultural workers and 17.4 non-agricultural workers. About 1.2 million are unemployed, and 13.1 million persons older than 15 are not attached to the labour force. In addition, many Thai have moved abroad to seek employment in other East Asian countries. Contributing to the poor employment prospects of many Thai is the fact that many companies in Thailand have begun to rely on illegal immigrants, who are willing to accept less than minimum wage. Thailand currently employs more than one million such immigrants, 90% of them Burmese. There are about three million illegal workers in Thailand, 10 percent of the labour force.

SOCIAL ISSUES

Like many other Asian societies, Thais are accustomed to a paternalistic hierarchical system. They have great respect for age and authority, preferring obedience and tolerance to conflict. This respect is expressed through face, or haikiat. At home, work, and school, they avoid correcting their superiors for fear of insulting them. Thais expect face to be given to subordinates as well. Direct criticism, visible loss of temper, and refusal to compromise are all considered rude to a much greater degree than in the West. Superiors are expected to be considerate and polite, even when reprimanding an employee. Although this is the ideal, Thai managers traditionally have an authoritarian attitude, and show little respect for their employees’ ideas or opinions. Thai business culture is vastly different from contemporary Western business management theory. Managers typically give orders and a deadline, and the employee is expected to not bother him or her with questions or comments. Until recently, employees were not fired for incompetence or laziness, only for actually committing a crime at the workplace. Thais often do not discuss or ask questions to clarify their instructions, but nod and appear to understand, and then are unable to do their work. They prefer to talk about issues in an informal way, such as at lunch, rather than at a meeting.

Although female industrial workers in Thailand experience more socio-economic independence, they do so in a gender-biased labour market that favours single young women for certain types of jobs. Internal migrant workers are a result of regional imbalances created by national development policy. Migrants move to the BMA because they can not find adequate jobs or incomes in the rural areas. Although women make up half of Thailand’s labour force, they have been incorporated in gendered roles in order to drive profits. There is scant economic incentive for employers to comply with labour norms, and compliance rates are low. The availability of cheap, often illegal, and hence utterly unprotected labour is so high that there is a concrete and powerful economic incentive to avoid legally mandated labour costs. The existence of a labour surplus, the trade in women and girls, and the surfeit of Burmese and rural Thai migrants all serve to marginalise traditional labour and employment law mechanisms and institutions. Courts provide no counterweight to these raw economic forces; other enforcement agencies are largely ineffectual. Legal resources are heavily skewed in favour of employers; few lawyers wish to represent trade unions or workers. Yet there are several legal aid institutions and law firms that counsel worker groups.

LEGAL ISSUES

In Thailand, the government has reevaluated its laws to provide better protection for its labor force. Thailand has four main labor laws: the Labor Protection Law of 1972, the Labor Relations Act of 1975, the Social Security Act of 1990, and the State Enterprise Labor Relations Act of 1991 (SELRA).

The Labor Protection Law sets the requirements for the minimum and maximum number of working hours, holidays, sick leave, maternity leave, military leave, and business leave for an employee. It also sets the standard for minimum wage, overtime, and severance pay. The law provides guidelines for working conditions, female and child labor, and the factors for terminating employment.

The Labor Relations Act of 1975 authorizes the establishment of unions and employer associations for Thai nationals and provides guidelines for negotiating an employment contract . The Act authorizes the establishment of unions and employer associations for Thai nationals and provides guidelines for negotiating an employment contract. Although it is still evolving, the Social Security Act passed in 1990 provides benefits to employees or family members of employees who have suffered from illness, disability, pregnancy, or death. Until enactment of this law, it was each individual company’s prerogative to cover these circumstances . The Social Security Fund is financed through monthly payments by employees, employers, and the government, which each contribute 1.5% of the employee’s monthly wage. The workweek for Thai nationals ranges from the typical 44 hours to 48 hours for a factory workweek and 54 hours per week for certain commercial employeesWorkers cannot be forced to work overtime. If an employee chooses to work overtime, that individual may not work for more than four additional hours per day, and overtime may not occur for more than five consecutive days. Employers calculate overtime pay at 1.5 to 3 times the normal wage rate. Management officials are not subject to overtime pay unless stated in the employer-employee contract.

ECONOMIC IMPORTANCE OF HOSPITALITY

The Thai Government’s Sixth National Economic and Social Development Plan (1987-1991) gave particular focus and attention to the development of tourism; the result was a substantial boost to tourism revenue–from 50,000 million baht in 1987 to 123,135 million baht in 1992. This was partially caused by the government’s promotion of “Visit Thailand Year” in 1987, a marketing exercise which increased national tourism income by 34 percent in 1987 and by 58 percent in 1988. By 1991, income from tourism was equivalent to two-thirds of the country’s agricultural export earnings, and was nearly the same as the country’s income from textile and garment exports. The number of tourists coming to Thailand remained constant in 1991, despite the Persian Gulf Crisis and a military coup in Thailand. Although the industry initially suffered from the political turmoil in May, 1992, it soon recovered.

In order to develop the labor force, the Thai government has developed a number of programs to stimulate the national educational system. In 1995, it launched a seven-year program to improve the skills of Thai nationals. Thailand has also eased restrictions on the establishment of private high schools and universities. In fact, the only requirements for such private schools are that 80% of the students are Thai nationals and that English is a mandatory subject. More recently, the Thai government emphasized the importance of higher education by lengthening compulsory education from six to nine years.

It is important to note that the increase in tourism revenue since 1981 has mostly derived from greater numbers of tourists coming to Thailand, and tourists extending their stay, rather than from higher daily expenses. Thailand is in the midst of an economic boom that will continue well into the 21st century. Although it has faced political upheaval in the recent past, its economy has not faltered. The government has continually been future-oriented in helping to advance the economy and simultaneously improve its human resources. The Thai government and Board of Investment have welcomed foreign investment and promoted the private sector by offering such incentives as multiple tax breaks and import duty exemptions. The overall quality of human resources is improving and the conditions that govern them are becoming more sophisticated.