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Bangkok Post - Sluggish spending delays tourism recovery
Sluggish spending delays tourism recovery
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Sluggish spending delays tourism recovery

Operators pin hopes on fourth quarter

Tourists relax on a beach on Koh Tao in Surat Thani. A poll by the Tourism Council of Thailand found that the tourism index for the fourth quarter was still below the normal level. (Photo: Supapong Chaolan)
Tourists relax on a beach on Koh Tao in Surat Thani. A poll by the Tourism Council of Thailand found that the tourism index for the fourth quarter was still below the normal level. (Photo: Supapong Chaolan)

Despite 20 million foreign arrivals in the first nine months of the year, the tourism index has still plunged below the regular rate as operators witnessed sluggish spending due to global economic concerns and a high level of household debt, according to the Tourism Council of Thailand (TCT).

Chamnan Srisawat, president of the TCT, said the high level of household debt remained the most critical concern in the third quarter, which was reflected via the tourism confidence index of 69, dropping from 91 in the same period of 2019, and 74 and 72 in the first and second quarters of this year, respectively.

As a "normal" level of confidence is benchmarked at 100, the current index indicates that the country's tourism industry has yet to return to normal and would have to wait until the fourth quarter to see the visa-free scheme for the Chinese create positive momentum in order to secure 25-30 million tourists as TCT projected for this year.

As of Oct 1, the number of foreign visitors tallied roughly 20 million, growing 250% year-on-year, with Malaysia claiming top spot with 3.28 million tourist arrivals, followed by China (2.5 million) and South Korea (1.19 million).

In the third quarter, operators had a recovery rate of revenue at only 54% of the 2019 level. The majority (76%) said their income was still worse than 2019.

The tourism index, which polled 740 operators nationwide, also found the fourth quarter index being upgraded to 75, but it was still below the normal level of 100 and lower than the 88 recorded in the corresponding period of 2019.

Mr Chamnan said tourism operators agreed that the sector in Thailand has recovered only in terms of arrival numbers, but not in spending, as both local and international travellers were being careful with their money.

The situation in the final quarter might gradually pick up due to sluggish exports for more than 10 months in Thailand, while the slow economic recovery in China has affected overseas spending, said Mr Chamnan.

According to the TCT survey, only a quarter of Chinese visitors had high purchasing power with average spending of over 70,000 baht per trip, with most of them spending less than 70,000 baht.

Some of those high spenders paid around 3 million baht, or over 100,000 baht per trip, as they purchased assets like condos or luxury brand items to diversify and mitigate economic risks they encountered in China.

To attract high purchasing power from China and other countries more effectively, TCT suggested the government consider other measures on top of the visa-free scheme, such as special tax incentives for foreigners who want to buy properties or luxury items in Thailand.

Mr Chamnan said that due to the uncertain recovery, 22% of operators were putting new hiring on hold as they want to see the market gain more of a positive momentum before employing more workers.

Only 4% of operators intend to hire more workers in the fourth quarter, which is equal to 160,000 positions.

The overall tourism employment in the third quarter was still 16% lower than in 2019, when the sector had a workforce of around 4.4 million.

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