The increase in consumer loans and rising mortgage defaults are concerns for the domestic tourism market through next year, meaning that short-term promotions such as those for festivals and events might not help, according to tourism operators.
In its third-quarter report, the National Economic and Social Development Council issued a warning about the increase in personal loans, while mortgage defaults on loans of less than 3 million baht indicate sluggish household income.
Udom Srimahachota, vice-president of the Thai Hotels Association's western chapter, said the economic uncertainty left many Thai tourists, particularly the mass market, with little budget for travel and leisure activities.
Domestic tourists tend to travel less and restrict their budget to focus only on necessities, such as hotels and transport, spending less on shopping.
Meanwhile, consumers in the upper-market have opted for destinations overseas during the winter months, heading to Japan, Europe and China, which granted Thais visa-free entry.
He said some Chinese trips only cost around 20,000 baht per package, competing with popular domestic destinations, such as Pattaya and Hua Hin.
As a hotel operator in Hua Hin, Mr Udom noticed that hotels in the area had gained only a few domestic bookings recently, as many Thais seek cooler climes in the north.
Mr Udom said the government's initiative to promote events throughout the year has not fully enhanced the domestic market as people are still concerned about spending and are choosing to travel only during certain periods.
He said the government should prioritise economic stimulus and help people increase their income with effective financial measures, such as debt restructuring and interest rate reduction, rather than distributing 10,000-baht cash handouts.
Kantapong Thananerngroth, president of Thai Tourism Promotion Association, said the government's three-year suspension of interest payments for mortgage, vehicle loans, and small and medium enterprises as a part of its economic stimulus should at least alleviate sluggish domestic tourism over the coming months.
He said Thai tourists would still allocate some of their budget for domestic trips despite the economic concerns.
During the Loy Krathong festival earlier this month, hotels located near related events were fully booked, especially high-end properties.
With more intense competition in the tourism sector, the government should plan and promote events next year in advance, while formulating efficient income distribution for local operators and communities, said Mr Kantapong.