Ministry postpones levy on foreign visitors
'Psychological deterrence' feared
The Tourism and Sports Ministry has decided to delay plans to collect a tourism levy from foreign visitors.
Last Wednesday, permanent tourism secretary Chote Trachu said the levy could result in psychological deterrence among foreign visitors and further harm the stagnant sector.
In May, Mr Chote announced that the ministry had studied the feasibility of collecting a tourism levy from foreign visitors and using the income to rehabilitate natural destinations. He hinted that the tax amount would be minimal and not affect visitors.
"We do not want to implement the levy this year, as it could worsen Thai tourism, especially when the baht is so strong," Mr Chote said.
He is convinced that tourist arrivals during the last four months of the year will accelerate, pushing the total to 40-41 million baht as projected because the government extended a waiver from visa-on-arrival fees.
Kampon Adireksombat, senior director of economic and financial market research at the Economic Intelligence Center of Siam Commercial Bank, said that apart from the strong baht, tourism will feel the pinch from the escalating US-China trade spat that has developed into a currency war, with Beijing accused of letting the yuan fall to the lowest in a decade to guard against further import tariffs from the US.
The situation's adverse impacts have crept into local tourism and the economy.
Mr Kampon said GDP in the second quarter stood at 2.3%, the lowest point in the past five years.
"The economic stimulus plans put forward by the government could raise GDP growth this year to 3%, instead of 2.7% without the scheme," he told hoteliers last week.
Mr Kampon said GDP growth could rise to 3.2% if negotiations on tariffs between the US and China succeed next year, but fall below 3% if the talks fail.
The strong baht has resulted in Chinese tourist numbers falling by 3.3% to 6.63 million in the first seven months this year.
Mr Kampon said the changes in Chinese behaviour came about from economic factors, as they tend to visit closer destinations such as Hong Kong and Macau or countries with lower costs such as Cambodia.
"But the unrest in Hong Kong may bring about a windfall for Thailand," he said.
He voiced optimism that the baht would remain at 30-31 to the US dollar for the rest of the year and not reach 29 baht. But operators need to prepare for possible currency risks next year, Mr Kampon said.