Tourism confidence low amid sluggish economy
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Tourism confidence low amid sluggish economy

Protracted heat wave in second quarter also deterred some travellers

Tourists prepare to board a boat at the Tha Tien pier in Bangkok on June 7. (Photo: Apichart Jinakul)
Tourists prepare to board a boat at the Tha Tien pier in Bangkok on June 7. (Photo: Apichart Jinakul)

The tourism confidence index remained below the benchmark in the second quarter, hampered by stagnant economic growth, though it improved from last year, according to the Tourism Council of Thailand (TCT).

The index for the second quarter was 79, lower than the benchmark of 100 recorded before the pandemic.

Although the index fell from 81 in the previous quarter, it improved from 72 in the same period last year.

The reading was based on a survey by the council of 740 tourism operators nationwide between May 30 and June 10.

Council president Chamnan Srisawat said the delay in fiscal budget disbursement and the low tourism season resulted in a lower reading.

He said an extreme heatwave also left some tourists reluctant to travel. Many operators in the southern provinces faced a water shortage.

In the second quarter, hotels reported a 55% occupancy rate, down from 60% in the previous quarter.

Deflation and recession risks still remain, said Mr Chamnan, noting that the revenue of all tourism businesses has recovered to only 48% of the 2019 level.

In addition, many factories have closed, causing more unemployment.

However, the employment rate in the tourism industry rose from 87% in the first quarter to 99% in the second quarter, implying more workers from other industries and new graduates have joined the services and hospitality sectors, he said.

Despite the growing workforce, Mr Chamnan said the industry still lacked skilled workers, such as those fluent in foreign languages or having skills for specific jobs, such as hotel receptionists or spa therapists.

For the next quarter, he said the index should drop to 75, attributed to the low season and fewer public holidays that could attract tourists.

Falling domestic consumption and a stagnant industrial sector would also affect tourism, while geopolitical risks continue to impact overall travel sentiment, said Mr Chamnan.

He recommended various incentives be extended to support tourism, including the 60-day visa-free policy for 93 nations, and tax deductions for travel and meetings in second-tier cities.

The TCT predicts tourism revenue of 2.7 trillion to 3 trillion baht this year, well short of the government’s target of 3.5 trillion. To bridge the gap, the government needs to attract 40 million foreign tourists, increasing their spending to 56,000 baht per trip, as well as pump up domestic trips to 220 million, according to the council.

The Tourism Authority of Thailand (TAT) said earlier this week that domestic tourism spending was expected to miss its ambitious target of 1.2 trillion baht as local tourists are concerned about the economy and high travel costs.

Mr Chamnan said strategies that should be quickly implemented include increasing tourists’ length of stay and promoting events and joint campaigns during the low season. He said the government should also develop upskilling programmes for tourism operators, such as foreign language training and management and technological learning.

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