Thai tourist numbers set to soar with anticipated visa exemption for China
The Thai tourism industry is poised for a significant boost, as an anticipated visa exemption for Chinese travellers could trigger a surge in foreign tourists, according to Chinese government-owned Thai brokerage, CGS-CIMB Securities (Thailand). However, the firm predicts that the arrival figures for tourists from China will still lag behind the 2019 statistics due to the economic challenges faced by the mainland.
The slow visa application process has been identified as a primary barrier to Thailand’s tourism recovery this year by the brokerage, which is 75% owned by China Galaxy International Financial Holdings.
The firm suggests that eliminating the visa requirement may prompt a large influx of foreign tourists, particularly group travellers. The brokerage stated in a research note that now is the time for action.
“As regional competition intensifies, it is an opportune time for the new government to introduce measures to sustain Thailand’s economic recovery.”
China lifted its restrictions on outbound tour groups to several countries, including South Korea and Japan, last month. Meanwhile, next month, the Indian government will hike the outbound remittance tax from 5% to 20% for overseas tours, encompassing payments for air tickets and hotels, reported Bangkok Post.
The brokerage foresees a swift increase in tourist arrivals from China and India if a visa exemption scheme is introduced by the new government. In 2019, the combined markets of both countries comprised almost a third of Thailand’s total foreign visitors.
Based on the Tourism and Sports Ministry’s data, Thailand has welcomed 15.4 million foreign tourists in the first seven months of 2023. The securities firm forecasts tourist numbers this year will more than double last year’s totals.
“We’re projecting foreign arrivals in Thailand to reach 28 million this year, a significant rise from 11 million in 2022.”
For 2024, the firm envisions 35 million arrivals, which would account for 85% of pre-Covid levels.
However, the brokerage predicts only 6 million Chinese arrivals this year, a sharp drop from the 11 million in 2019 said Patcharamon Cheevakrianggrai, CEO of CGS-CIMB Securities.
“Given the economic deceleration in China, primarily due to the property sector’s turbulence, Chinese tourists may have a reduced budget for overseas travel,”
Nevertheless, the brokerage anticipates Chinese tourist arrivals to rebound to 80% of pre-Covid levels by early next year. At the end of July, tourist arrivals from China were at 40% of the corresponding period in 2019.
This figure is expected to recover to 50 to 60% by the end of the third quarter and reach 60% in the final quarter as group travellers return and the visa process is simplified.
The securities firm suggests that companies with significant business exposure to foreign tourism in Thailand, such as Erawan Group, Central Plaza Hotel, Airports of Thailand and Minor International, are likely to benefit the most from this development.
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