The tourism confidence index for the first quarter is lower than normal, according to the Tourism Council of Thailand (TCT), attributed to lower revenue for tourism operators and deflation risks.
The index for the quarter was 81, lower than the standard of 100, though it improved from 77 and 74 in the fourth quarter and first quarter of 2023, respectively.
TCT surveyed 740 tourism operators nationwide from Feb 10 to March 5.
Chamnan Srisawat, president of the council, said the high season in the first quarter led to an uptick from the previous quarter.
Many domestic tourists travelled during the New Year holiday and Children's Day. Arrivals from short-haul countries also flooded to Thailand during Chinese New Year, including from China, Hong Kong, Singapore, Taiwan and Malaysia.
Steady growth of long-haul visitors pushed total foreign arrivals to 9.4 million in the first quarter, compared with 8.1 million in the fourth quarter of 2023.
However, domestic demand slowed because of deflation risks, as people exercised more caution spending than before the pandemic, he said.
Delays to fiscal 2024 budget disbursement and a high household debt-to-GDP ratio also hampered tourism confidence, said Mr Chamnan.
Operators across all regions reported an improved confidence index in the first quarter, with southern provinces securing the highest level at 86.
Tourism revenue totalled 53% of the 2019 level, down from 58% in the fourth quarter because of ongoing deflation, while the nationwide hotel occupancy rate was 60%, according to the TCT.
He said the hotel business tallied the highest revenue recovery at 59% of the 2019 level, while souvenir and spa businesses are at 45% of 2019 revenue.
Mr Chamnan said negative factors will continue to hamper the confidence index in the second quarter, including the end of the diesel price cap at 30 baht per litre, high domestic airfares, rising non-performing loans and weak purchasing power.
The northern region has the lowest sentiment, particularly during the Songkran holiday, at 85 compared with an average of 92.
With a 21-day Songkran celebration, school holiday and disbursement of fiscal budget, the index should rise to 83 in the second quarter, he said. The TCT forecasts 35.7 million foreign arrivals this year generating 1.68 trillion baht in revenue.
The council wants the government to offer funding to small enterprises in major tourism provinces with government agencies acting as guarantor, while collecting the 300-baht tourism fee to distribute money to improve tourism sites.
