Thailand’s tourism confidence slides amidst global economy concerns

The second quarter of this year saw the Tourism Confidence Index remaining subdued, sliding from the previous quarter. The contributor to this drop was a blend of Thailand‘s low season and decreased earnings from tourism.

The president of the Tourism Council of Thailand (TCT), Chamnan Srisawat, announced that the second quarter’s score was two points lower than the prior quarter at 72. This noticeably fell short of the identical period in 2019, which recorded 100, inferring weakened optimism. The findings came from a survey conducted from April 20 to May 30, comprising 740 operators.

A pressing concern was the cost of electricity, scoring 3.94 out of 5, yet only a meagre 14% of surveyed participants decided to transfer this expense onto their patrons. The shortage of labour had a mild score of 3.11 as the employment rate climbed to 90% of the rate in 2019.

In relation to revenue earned from tourism operations, 68% of companies are still earning less than in 2019, with most of them only acquiring 60% of earnings made prior to the pandemic, Bangkok Post reported.

From a regional perspective, tourism operators situated 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.

Chamnan revealed his belief that this quarter’s results reaffirmed that international arrivals this year might hit 29.4 million. This is a minimal decline from the 30 million target set by the TCT.

The industry concerns continue to center on the global economy. The possibility of a recession in Europe could impact Germany and the escalating cost of living in the UK.

Chamnan highlighted that the short-haul market could be affected by various factors, including a weak yen and an unhurried approval procedure for Chinese e-visas for those wishing to travel to Thailand.

Despite the study indicating strong domestic travel for the initial four months of this year, surpassing the rate of 2019, business revenue lacks behind earnings made before the pandemic.

Due to the sluggish economy and high household debt, Thai tourists remain reluctant to spend. Chamnan mentioned that the industry anticipates the formation of a new government to enable the disbursement budget for the high season in the final quarter.

However, the prevailing political instability and anticipated protests could adversely impact the tourism industry.

On a positive note, TCT celebrated the announcement from the Interior Ministry outlining an easing of laws which will permit more accommodations to register as a hotel business. Chamnan noted optimistically that licensing over 50,000 small accommodations should provide a greater capability to accommodate more tourists.