Tourism confidence in Thailand plummets amid economic jitters
The tourism confidence index in Thailand has taken a hit, with figures sliding from 91 in the same period of 2019 to 69 in the third quarter of this year, according to the Tourism Council of Thailand (TCT).
The third quarter’s number also represents a decline from 74 and 72 recorded in the first and second quarters of 2021 respectively. Despite welcoming around 20 million foreign visitors from January to September, the tourism industry is yet to see a significant economic boost, largely due to global economic jitters and high household debt levels.
TCT’s president, Chamnan Srisawat, stated that household debt was the most significant factor affecting tourism confidence in the third quarter.
A confidence level of 100 is considered “normal.” The current index implies that the industry has not yet returned to normalcy. The TCT is hopeful that the visa-free scheme for Chinese tourists could create positive momentum in the fourth quarter.
In terms of arrival numbers, Malaysia topped the list with 3.28 million tourists, followed by China with 2.5 million and South Korea with 1.19 million. Despite the increase in arrivals, the tourism sector’s revenue recovery rate was just 54% of the 2019 level in the third quarter. A significant 76% of operators reported income levels lower than those of 2019.
The TCT survey, which gathered data from 740 operators across the country, also revealed an upgrade in the fourth quarter index to 75. However, it remains lower than the normal level of 100 and 88 recorded in the corresponding period of 2019.
Spending Patterns
Operators believe that the sector has only recovered in terms of arrival numbers, not spending. Both local and international travellers have been cautious with their expenditure.
The sluggish export scene in Thailand and the slow economic recovery in China have reportedly been impacting overseas spending.
Interestingly, only a quarter of Chinese visitors demonstrated high purchasing power, with an average spend of over 70,000 baht per trip. Some high spenders even spent around three million baht, purchasing assets such as condos or luxury brand items to diversify and mitigate economic risks.
In light of the uncertain recovery, 22% of operators have put on hold new recruitment until the market shows signs of a stronger positive momentum.
Only 4% of operators plan to hire more workers in the fourth quarter, equating to approximately 160,000 positions. The total employment in the tourism sector in the third quarter was still 16% lower than in 2019 when the industry employed around 4.4 million individuals reported Bangkok Post.
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