Thai tourism risks missing Indian visitor target due to visa delays, taxes

Tourism operators catering to Thailand‘s Indian market have expressed concerns over the potential impact of slow visa application processing, high airfares, and an increase in outbound tax rates from India on visitor numbers to Thailand. These factors could contribute to the Thai government failing to achieve its target of attracting 2 million Indian tourists this year.

Enchantive Asia’s chief executive Rajesh Nair highlighted that despite the strong demand from Indian travellers, several obstacles are impeding their arrival in Thailand. Among these is the Indian government’s proposal to raise its Tax Collected at Source (TCS) for overseas tour packages from 5% to 20%, effective from July 1.

Nair explained that the higher tax rate could deter tourists from travelling abroad or encourage them to opt for domestic trips instead, even though they can reclaim TCS on annual income tax returns. Additionally, tourist visa applications now take up to 15 days to process, compared to less than a week before the pandemic.

As a result, many tourists have switched to obtaining visas-on-arrival at the airport, leading to terminal congestion. Nair suggested that the Thai government could support Indian tourists by subsidising visa costs, offering incentives for groups to offset high airfares, and improving visa procedures.

Despite these challenges, the Tourism Authority of Thailand (TAT) remains committed to its target of 2 million Indian tourists in 2023. However, Siriges-a-nong Trirattanasongpol, TAT director of the New Delhi office, acknowledged that the most likely scenario is 1.5-1.6 million arrivals based on current airline capacity.

During a webinar hosted by the Thai Hotels Association, Trirattanasongpol revealed that flight resumption between Thailand and India last month had recovered to 60% of 2019 capacity. However, Go First, a major Indian airline that recently went bankrupt, has ceased flying to Thailand.

To encourage airlines to increase flights between India and Thailand during the cool season, TAT will collaborate with them to develop marketing promotions, Trirattanasongpol added.

Tanes Petsuwan, TAT deputy governor for Asia and the South Pacific, confirmed that the Consular Affairs Department is working to streamline the visa approval process, particularly for large groups. Petsuwan also stated that TAT’s offices in India have been tasked with monitoring the impact of the TCS increase over the coming months.

Between January and May this year, over 580,000 Indian tourists visited Thailand, while 1.9 million people arrived from the country in 2019.