As Thailand’s tourism confidence reduces with increasing global economic concerns, this report from Thailand’s Tourism Council helps to explain why.
2019 40 million tourist arrivals
2023 30 million targeted
2023 29.4 million forecast
The Thailand Tourism Council’s president (TCT), Chamnan Srisawat, announced that the second quarter’s score was two points lower than the previous quarter at 72. The findings came from a survey conducted from April 20 to May 30, comprising 740 operators. This fell short of the identical period in 2019, which recorded 100, inferring weakened optimism. The Tourism Confidence Index remains subdued, the contributor to this drop was a blend of Thailand‘s low season and decreased earnings.
A pressing concern was the cost of electricity, scoring 3.94 out of 5, yet only 14% of surveyed participants decided to pass this on. The shortage of labour had a mild score of 3.11 as the employment rate climbed to 90% of the rate in 2019. However, electricity, fuel and labour are all leading to rising costs.
Concerning revenue, 68% of companies are still earning less than in 2019, the Bangkok Post recently reported.
International arrivals this year might hit 29.4 million, a decline from the 30 million target set.
Global challenges include the possibility of a recession in Europe which could impact Germany, the escalating cost of living in the UK, a weak yen and an unhurried approval procedure for Chinese e-visas for those wishing to travel to Thailand. Fluctuating exchange rates and their effect on the baht’s value could also hinder recovery.
The study indicated domestic solid travel for the initial four months of this year, surpassing the rate in 2019.
Due to the sluggish economy and high household debt, Thai tourists appear reluctant to dip into savings and spending. The formation of a new government to enable the disbursement budget for the high season in the final quarter will kick start spending if the political instability and anticipated protests don’t materialise. If they do, they could adversely impact the tourism industry.
From a regional perspective, tourism operators in the northeast documented the highest revenue recovery, boasting an index of 64. This can be attributed to their lessened reliance on international tourists, contrasting the East region, which reported the lowest revenue growth at just 54% of the usual rate.
Despite the study indicating domestic solid travel for the initial four months of this year, surpassing the rate of 2019, business revenue lacks behind earnings made before the pandemic.
On a positive note, TCT celebrated the announcement from the Interior Ministry outlining an easing of laws that will permit more accommodations to register as a hotel business. Chamnan noted optimistically that licensing over 50,000 small accommodations should provide an excellent capability to accommodate more tourists.
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