Increasing Competition Healthy for Thailand DMC Sector

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The constant addition of new players entering into Thailand’s established DMC scene has many questioning if the market is facing saturation, but players in the field are contending that the pie is growing bigger – and has a slice for everyone.

A newcomer is HG Travel Thailand, launched this April as a joint venture led by managing director Andre van der Marck. Thailand forms part of HG Travel’s wider expansion strategy into the region, adding to the Hanoi-based DMC’s presence in Vietnam, Laos, Cambodia and Myanmar.

Van der Marck sees a gap still in the small- to medium-sized grounds for bespoke operators like HG Travel Thailand, whose focus on the high-end, tailor-made sector will put it in a better position to customise “complicated itineraries spanning two to three weeks for demanding customers” than counterparts going after the mass market.

“Established DMCs in Thailand are either the small mom-and-pop variety or the big boys on the other spectrum,” said van der Marck. “We are not going up against the big boys like Diethelm or Destination Asia; we don’t want to fight against Goliath.”

Exo Travel group managing director Hamish Keith perceives it as a “very normal” development for operators that have been successful in neighbouring countries to set up in Thailand, owing to growing interconnectedness and cross-border travel in the region.

“Moreover, a client expects consistent service and usually prefers to deal with one DMC for each file rather than handle several relationships. This leads to more regional DMCs or satellite operations, which of course increases competition and can lead to some saturation in the marketplace,” said Keith.

Noting that competition is inevitable with a more crowded marketplace, Destination Asia (Thailand)’s managing director Pornthip Hirunkate also thinks that new DMCs will keep the incumbents “on their toes” and push them to “think out of the box and engage clients at even more creative levels”.

Keith agreed: “We believe that good operators who develop interesting products and are ready to invest in resources to promote the destination will help attract additional interest and attention to the region, which in turn helps to increase the size of the cake and ultimately benefits everyone, especially the destination.”

While new DMCs in South-east Asia have come knocking on the doors of Easy Tours Belgium with the lure of lower fees, managing director Antoine Noens argues that it’s not a simple price proposition when it comes to partnerships. “We don’t often change DMCs. Good times, bad times, we don’t change DMCs just for five dollars less,” he commented.

But if new players are able to “bring something new to the market” and “add value to relationships”, Karen Sales, senior event producer at Xyhyr Brand Experiences Australia, would consider switching partners in markets where existing ones have become complacent and lack product ingenuity.

It seems like the trade generally thinks the Thai DMC playing field is wide enough to accommodate newcomers.

“Arrivals are always rising in Thailand, with over 20 million real visitors each year. There is still room for niche players (like us),” van der Marck stated.

“Thailand is a stepping stone for anyone visiting South-east Asia, especially for emerging markets like Poland which is starting to explore this region. (More DMCs in Thailand) will (benefit) both buyers and sellers alike,” said Noens.

On the contrary, he suggests that Indochina is seeing a saturated DMC sector as emerging destinations like Laos and Cambodia do not have (sufficient) visitor volume yet to justify an expanding pool of DMC players.

See original article at http://www.ttgasia.com/article.php?article_id=28190

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Founded by two travel and technology professionals with years of experience in Asia, Representasia specialises in sales & marketing representation throughout Southeast Asia for travel/hospitality technology providers and travel-related startups, as well as providing marketing consultancy services for hotels and travel businesses in the region.

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