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Wake up call on AEC 2015

posted Aug 26, 2011, 8:26 PM by Dong Travel   [ updated Aug 26, 2011, 8:30 PM by Mickey Dong Hoang Thinh ]
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Business experts say the emergence of the ASEAN Economic Community by 2015 will seriously challenge Thailand’s tourism operators, while offering opportunities for those already prepared to expand their business regionally.

During a seminar AEC: Trends for Thailand Tourism, held Wednesday, Tourism Council of Thailand Policy and Planning president, Kongkrit Hiranyakit, warned it would seriously challenge tour company owners who would need to upgrade staff to a higher level of competence to compete.

“AEC 2015 will allow more foreign companies to invest in travel here, while facilitating the flow of skilled labour across borders in the hotel and travel segments. That alone will mean company owners will have invest more in skilled labour and be prepared for more competition,” Mr Kongkrit said.

He presented five ways to strengthen the country competitiveness:

Improve quality and standards of the products;

Establish better investment data and information;

Create more man-made destinations and products;

Create alliances with related associations throughout ASEAN;

Build contacts with government agencies to tap resources and support.

TCT academic board president, Paradej Payakawichean, said hotel services would gain more opportunity than the travel services division once there is a free flow of skilled labour.

It will make it easier to employ skilled executives in the hotel business resident in ASEAN countries and will further weaken the reliance on hiring western executives.

Skilled hotel executives from Singapore are most likely to benefit as they are already working in top hotel posts.

“Hotel services division can exploit the advantages of Thailand’s renowned hospitality, while travel service division will have to focus more on management skills,” Mr Paradej said.

But the problem for Thai hotel staff is that most of the top posts are still held by expatriates so they are not gaining experience at the top level, making it more difficult for them to apply for top hotels posts in other ASEAN countries once the community rules come into play in 2015.

According to ASEAN Common Competency Standards for Tourism Professionals (ACCSTP), there are 32 positions that will open after 2015. There are 23 in the hotel sector and nine in the travel services sector.

Thai Hotels Association Western Chapter vice president, Udom Srimahachota, said Thailand will face stiff competition as investors from richer ASEAN countries move in to buy assets.

“International companies with home-bases in Europe and US will set up a base in ASEAN and use that to expand take advantage of the community era,” Mr Udom indicated.

For example under the AEC and as early as 2012, the shareholder percentage for foreign investment will increase from 49% to 70% across the region for certain categories including travel and hospitality, he warned.

“The government has to project our tourism and hospitality segments and ensure that there are opportunities for us to expand,” he said.

Association of Thai Travel Agents acting president, Sisdivachr Cheewarattanaporn, said there was a lack of clear knowledge on AEC and language skill will be another issue when compared with Singapore and the Philippines.

“Thailand is not ready right now for free trade as there are few people who understand AEC in depth. We have to develop skills in third languages particularly from ASEAN as it is not enough to rely on English,” Mr Sisdivachr said.

AEC 2015 fact file:

The promise: Free flow of goods, services, investment, capital and skilled labour.

Significance: Tourism is a priority service industry in the threshold of the AEC plan on investment. It will mean that foreign shareholding in ASEAN-based companies will be able to increase from 49% to 70% across the region and this could begin to challenge Thai companies as early as 2012.

Labour: Under the ASEAN Mutual Recognition Arrangement on Tourism Professionals, scheduled to be complete by next year, there are 32 positions in six labour divisions available for workers from all member countries almost with the freedom attained in EU. But the work permit conditions will remain valid in each country as a concession to national interests.

The six labour divisions cover: four in hotel services including front office, housekeeping, food production and food and beverage services; two in travel services comprising of travel agencies and tour operators.

Source: TTRW
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