As countries in Southeast Asia aim to attract higher-quality tourists, premium food and beverage (F&B) options are proving essential to raise tourist spending, as highlighted by a recent survey conducted by Oxford Economics.
The “Capturing High Quality Tourism for Southeast Asia” study revealed specific aspects of the F&B experience significantly influence prospective tourists’ choices when selecting a destination.
Remarkably, tourists considering Southeast Asia are 2.5 times more inclined to choose a location that offers premium F&B experiences over one with more conventional service options, assuming all other factors remain the same.
Rise of Premiumisation
Premiumisation is gaining momentum in the global alcoholic beverages market, and Thailand is well-positioned to capitalise on this trend, said Nik Jhangiani, chief financial officer of Diageo Plc, a British multinational alcoholic beverage company.
“Thailand is blessed with natural beauty and a welcoming culture, while offering high-end shopping experiences that are sure to draw in more high-spending tourists,” said Mr Jhangiani.
He said consumers now prioritise quality over quantity when it comes to their drinking choices.
Mr Jhangiani said the super-premium segment is expanding roughly 1.5 times faster than the rest of Diageo’s product offerings, with nearly 60% of the company’s portfolio classified in the premium plus category.
In Thailand, Mr Jhangiani sees a surge in both premium and mainstream drinks, highlighting the shift among conscious consumers who are seeking greater value when making a choice.
To enhance the appeal of premium products, understanding consumer preferences is crucial, such as their consumption habits and the best channels through which to serve alcoholic beverages, he noted.
“Experiential and exploration are key,” he said, adding that Thailand’s robust tourism market provides an opportunity to enhance premium offerings linked to unique channels and special occasions.
He also emphasised the growing trend of pairing drinks with food.
Unlocking challenges
Mr Jhangiani said he had observed significant progress in Thailand’s tourism sector and expressed his appreciation for the government's initiatives to ease restrictions on alcohol sales
and advertising, which are currently undergoing review. He believes these changes will significantly enhance Thailand's attractiveness as a destination for international travelers.
The Oxford Economics survey highlighted that a diverse range of easily accessible food and beverage options is vital for tourists when selecting a destination. This includes numerous venues offering a selection of premium alcoholic drinks, with convenient opening and closing hours.
Moreover, Mr Jhangiani noted that there is further opportunity boost tourism through appropriate taxation changes on imported products. Last year, Thailand eliminated import tariffs on wine and champagne and there are growing calls for this to be expanded to imported spirits.
“Actually, reducing the tariff could drive increasing volumes of alcoholic beverage sales which not only supports market expansion but also enhances government revenue by stimulating greater consumption and tax collection - an effect already observed in categories like wine and champagne,” said MrJhangiani.
Promoting responsible drinking
Mr Jhangiani highlighted the importance Diageo puts in actively promoting responsible drinking all around the world through programs, partnerships and advocacy. For example, DRINKiQ.com is an industry-leading online resource dedicated to educating the public on making informed choices about alcohol and promoting moderation for those that choose to drink.
Furthermore, in collaboration with the British Embassy Bangkok and a local theatre, the Smashed initiative aims to educate young people about the risks associated with underage alcohol consumption.
Diageo Moët Hennessy (Thailand) or DMHT, a leading importer of premium alcoholic beverages, demonstrates unwavering commitment to responsible and ethical business practices by ensuring all product sales comply with Thai legislation. Through this conscientious approach, DMHT strives to foster a culture of positive and responsible alcohol consumption within Thai society , he said.
Contributions to tourism
Regarding Thailand’s tourism sector, Mr Jhangiani highlighted the challenges posed by the pandemic, which forced many hospitality workers out of the sector.
As tourism has recovered, he believes there is a need to reskill and upskill existing workers while also training new personnel.
His perspective aligns with the Oxford Economics survey, which emphasises the importance of having skilled restaurant and bar staff, as well as qualified mixologists and sommeliers in terms of delivering high-quality food and beverage experiences to tourists.
To bolster the industry, DMHT has partnered with government agencies and business owners to provide training for hospitality staff, including bartenders.
For over a decade, the company has hosted Diageo World Class Thailand, a national bartender competition to identify the best Thai bartender to represent the country on the global stage.
This recent initiative also supports the Tourism Authority of Thailand’s Ignite Thailand tourism policy, enhancing the country’s reputation as a premier tourist destination while advancing the skills of the local bartending industry.
In addition, he said the company offers skills development training through its Learning for Life programme, aimed at individuals facing barriers to employment, including students and those seeking careers in tourism and hospitality.
Through collaborations with organisations such as Kenan Foundation Asia, the Office of the Vocational Education Commission, the Thai Hotels Association, Khao Yai Tourism Association, and several universities, the programme aspires to reach at least 1,500 individuals a year, with the goal of impacting 15,000 lives by 2030.
