Travel packages mired by pricey airfare, slowing tourism recovery

Many that have been eagerly awaiting the full reopening of Thailand and the return of tourism, did not anticipate the severe cost of airfare and travel packages that has come with it. Now, tourism recovery in Thailand is threatened by the staggeringly high cost to fly, pricing many would-be travellers out of the trip.

The president of the Thai Travel Agent Association says that tour packages are skyrocketing in price, mainly as a result of expensive flight tickets driven in part by higher fuel costs worldwide, and higher operational costs. Long-haul flights such as those from the US and Europe are most severely affected by the high fuel costs, as well as shortages of workers as most airlines and related industries constricted severely during the Covid-19 pandemic and are now struggling to balloon back up to meet rising demand.

“Tour companies are promoting Scandinavian packages starting from 150,000 baht or around 170,000 baht per person on average, double the rate in 2019. Only 3% of outbound travellers can afford such pricey outbound trips.”

Some airfare prices doubled from the cost they were in 2019, before the pandemic, and travel agents putting together tour packages are finding increased operational costs across the board. Agents, therefore, have to shift their target demographic to just their top-tier clients who can afford the sharp increase in travel prices and who are less severely affected by the baht’s weak buying power and global inflation. Custom high-end packages and exclusive travel options are their aim to attract travellers wealthy enough to afford the rising prices.

Regional travel may be the one sector that can attract middle-income travellers in and out of Thailand. Trips to nearby destinations are on average 1000 to 2000 baht more expensive, while travel to Europe averaged about 5,000 to 6,000 baht more per traveller. Packages for travel within Southeast Asia are about 8 times cheaper than those Scandinavian packages at 20,000 baht on average.

Outbound tourism operators are looking to grow the short-haul outbound tourism sector in neighbouring countries like Vietnam, Laos, and Malaysia where travel can still be affordable, according to the TTAA president.

“Most Thai travellers, both clients of tour companies and individual tourists, refrained from taking long-haul trips as prices are too high. Meanwhile, there were 10% that had to cancel their trips as the visa process for Schengen countries takes 3-4 months instead of the 15 days it normally takes.”

There are still only about 50% of the number of flight routes travelling in and out of Thailand as before the pandemic, but the frequency of those flights is still below 30%. Industry experts fear that the travel surge in July, where load factor rates hit up to 90%, was just a short burst of travellers who have been dying to go abroad jumping on the full reopening on July 1, and that sales will sag as we enter the low season.

SOURCE: Bangkok Post