High travel costs and weak flight capacity challenge Thailand’s domestic tourism targets

The Tourism Authority of Thailand (TAT) revealed that the government’s target of accruing 1.08 trillion baht (US$30.9 trillion) in revenue from domestic tourism this year may be challenging to achieve due to high travel costs and weak flight capacity.

The target set by the TAT for the domestic market is 200 million trips this year, matching the 2019 levels. However, last year, the domestic tourism industry could only manage 185 million trips, generating just over 900 billion baht (US$25.8 billion), said Somradee Chitchong, the Deputy Governor for Domestic Marketing at TAT.

“To mark a full recovery, seat capacity on flights has to improve to 46.5 million from 36.5 million recorded last year, while economic conditions should be more upbeat than in 2023.”

Somradee also highlighted that increased airfare costs, particularly for last-minute bookings, coupled with the country’s delayed fiscal budget, pose significant challenges this year, reported Bangkok Post.

The domestic market was allocated only 400 million baht (US$11 million) from the proposed budget of 1.19 billion baht (US$34 million) due to the fiscal budget delay, with the remainder expected in May. Another issue is the incomplete resumption of cross-regional flights, such as those connecting the northeast of Thailand with the south of the country.

Chiang Mai remains a central hub, providing 18 cross-regional flights per week connecting the northern city to various other locations. However, many airlines have reallocated aircraft from their fleet to international flights to attract foreign tourists, said Somradee.

“If the TAT received a sufficient budget, it could incentivise airlines to offer promotions to encourage more domestic tourists to travel.”

Due to the current limited budget, the agency is focusing on promoting domestic tourism among the 15 million customers in their databases by collaborating with 12 public and private sector partners.

Somradee reassured that the reciprocal visa-free scheme between Thailand and China is unlikely to negatively impact domestic tourism. She stated that the travel industry typically ensures mutual benefits for tourists from each participating country.

TAT estimates show that domestic spending is approximately 4,000 baht (US$115) per trip, below the level recorded in 2019. Post-pandemic, Thai tourists are travelling more frequently but spending less per trip, particularly on shopping as many prefer online platforms.

“With pent-up demand expected to dry up this year, we should have more quality products to lure higher spending and develop sustainable programmes to cater to changing demand as people are looking for environmentally friendly tourism.”