Election uncertainty affects Thai tourism, domestic spending slows down

As the Election Commission validates candidates for MP-elect roles this week, tourism operators express concern about a slowdown in domestic spending. Travellers appear to be delaying their plans, whilst local businesses hesitate to reinvest until a government is established.

“There will still be a vacuum period until the government is formed,” said Sanga Ruangwattanakul, president of the Khao San Road Business Association.

Sanga highlighted that domestic tourists seem reluctant to spend on travel due to the ongoing political uncertainty, particularly if protests arise.

Khao San Road businesses rely heavily on domestic tourists, especially during weekends and the low season for European market visitors, while the short-haul market has yet to return to its 2019 levels, Bangkok Post reported.

Sanga commented that the economy is at a standstill, with not much the caretaker government can do about it, adding that the Tourism Authority of Thailand should enhance promotional campaigns in partnership with airlines.

Several hotels along Khao San Road require an increased number of visitors to raise the occupancy rate, which is currently stagnant at 40-50%.

Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association (THA), observed that the MP candidate endorsement is merely the first step towards government formation.

Marisa explained that hotel operators are troubled by a decline in the meetings, incentives, conventions, and exhibitions (MICE) sector, as some local businesses have postponed their plans, consequently impacting revenue from food and beverage services.

According to the THA, the nationwide occupancy rate this month is at 48%, falling behind the 65.2% reported in 2019.

Marisa anticipates improvement in the rate during July and August, as more flights resume. She stressed that a smooth transition from a caretaker government to the new one is vital for expediting industry growth, which is still behind the 2019 pace.

Adith Chairattananon, honorary secretary-general of the Association of Thai Travel Agents, mentioned that operators adopt a wait-and-see mentality due to lacking confidence in investing until the House speaker and prime minister are appointed, with established government policies in place for the tourism sector and economy.

Adith also noted that the industry requires more demand to reassure operators planning to reinvest.

Furthermore, he added that both the caretaker administration and the new government should address the e-visa application issue for Chinese tourists urgently, as the current waiting period of 10-15 days is excessively lengthy.