Confidence craters in tourism sector
text size

Confidence craters in tourism sector

Calls for a larger stimulus grow louder

Listen to this article
Play
Pause
Tourists relax on a hop-on, hop-off boat cruising along the Chao Phraya River on Tuesday, as air pollution from dust particles returned to Bangkok. (Photo: Pattarapong Chatpattarasill)
Tourists relax on a hop-on, hop-off boat cruising along the Chao Phraya River on Tuesday, as air pollution from dust particles returned to Bangkok. (Photo: Pattarapong Chatpattarasill)

The tourism confidence index in the third quarter plunged year-on-year and remained below the benchmark, hampered by sluggish spending from factory closures, unemployment, rising non-performing loans and severe flooding in both Thailand and abroad, according to the Tourism Council of Thailand (TCT).

The TCT is meeting with the board chairman of the Tourism Authority of Thailand on Thursday to discuss increasing subsidies for the next phase of the proposed co-payment travel scheme from 40% in previous phases to 50%, with a focus on second-tier provinces, said TCT president Chamnan Srisawat.

He said a minimum budget of 5 billion baht should help generate at least 5 million room bookings and encourage local travellers to book 3-4 room nights on average during the scheme.

If possible, the government should not wait until the next low season to implement this scheme, as about 30 provinces were heavily affected by floods, said Mr Chamnan.

According to the TCT, the tourism confidence index for the third quarter was only 68, lower than the benchmark of 100 recorded before the pandemic.

The index fell from 79 in the second quarter and 69 in the corresponding period last year.

The future tourism index for the fourth quarter was 80, up slightly from 77 year-on-year, attributed to the high season.

The reading was derived from a survey of 740 local operators between Aug 10 and Sept 15, according to the TCT.

Mr Chamnan said the sluggish economy played a critical role in the index declining for the third quarter, mainly attributed to six months of easing inflation. The situation was worsened by severe flooding in many provinces last month, he said.

Mr Chamnan said the ongoing wars in the Middle East and Ukraine, as well as a strong baht, were critical factors to watch in the next few months.

The 10,000-baht handout for vulnerable groups should help to lift the economy, but only for a short period, he said.

Other than in Bangkok, the southern and eastern portions of the country, the third-quarter index declined year-on-year.

On average, tourism operators reported their revenue was at 47% of 2019 levels, while 82% were still recording lower revenue than during the pre-pandemic period, far worse than 54% in the corresponding period of 2023, according to the TCT.

The employment rate in the tourism industry was registered at 84% of the 2019 level, down from 99% in the second quarter, as workers travelled back to their hometowns during the harvest season.

Struck by floods in September, hotels recorded a 54% occupancy rate in the third quarter. Only large and international hotels exceeded the industry's average occupancy rate, Mr Chamnan.

"I'm more worried about an uneven tourism recovery across the supply side," he said.

Do you like the content of this article?
COMMENT (30)