Time to act now on AEC 2015

Travel companies in Thailand need to build partnerships and network with their counterparts in ASEAN to prepare for borderless trade that will emerge through the ASEAN Economic Community 2015 initiative.

That was the conclusion of a panel discussion held last week, “AEC: the Turning of Thai MICE,” and organised by the Thailand Convention and Exhibition Bureau.

Panalists said business experts should look beyond the definitions and statements surrounding AEC 2015 and focus on how to take practical steps such as securing partnership agreements with companies in neighbouring countries that have similar corporate DNAs.

TCEB president, Akapol Sorasuchart, argued that Thailand was ready to be a regional hub of tourism and MICE business stating the country had the advantage of hospitality, service mind, business venues and tourism products.

But similar ambitions are shared by other ASEAN nations such as Malaysia, Vietnam and Indonesia all claiming they can be successful hubs or gateways.

To gain a competitive edge, TCEB conceded the government would have to study the AEC policy in more detail.

The government is proposing a minimum wage of Bt300 a day for labour and Bt15,000 for university graduates and this might impact on the country’s ability to compete and gain business hub status, the TCEB president argued.

According to Destination Asia chief executive officer and group managing director, James Reed, the solution for travel companies was to build a strong network with other operators in the region. To achieve it, Thai operators also needed international certification to build confidence and raise competitiveness to open doors in other countries.

“AEC 2015 will usher in tough times for single operators and small boutique hotels. They will need to create identify in the market, while the events business will have to concentrate on training and improving standards,” Mr Reeds said.

Tourism Council of Thailand vice president, Pornthip Hirunkate, said AEC will challenge family business to build alliances to survive competition.

“They will need to build business alliances in other countries to maintain markets or they will lose out to foreign competitors,” Ms Pornthip warned.

Meanwhile, Bangkok Bank executive vice president, Kobsak Pootrakool, suggested that the events business still needed government support.

“The government needs to find ways to attract international firms to establish head offices in Thailand and this would bring more events to the country,” Mr Kobsak indicated.

AEC 2015 fact file:

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

Significance: Tourism is a priority service industry at 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 completed by next year, there are 32 positions in six labour divisions available for workers from all member countries almost with the freedom attained in the 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 - ttrweekly