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Chinese Travel Woes Squeeze Thai Economy as New Virus Spreads

Chinese Travel Woes Squeeze Thai Economy as New Virus Spreads

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Thailand’s economy faces a new hurdle: A virus in China that threatens to squeeze its key tourism industry during a peak travel period.

As hundreds of millions of Chinese prepare to travel for the Lunar New Year holidays this weekend, concern is mounting that China will not be able to slow the spread of the pathogen -- part of the coronavirus family -- that first emerged in the city of Wuhan. It has since been detected in people in Japan, Thailand and other parts of China.

Chinese Travel Woes Squeeze Thai Economy as New Virus Spreads

Thai authorities have set up temperature detectors at airport arrival gates for flights from Wuhan. Preventing a wider spread that would spook holidaymakers is crucial for the Asian nation, since tourism accounts for about a fifth of its economy.

Eager to travel as their incomes rise, Chinese tourists have become the biggest spenders in Thailand, accounting for about 30% of tourist receipts last year, according to government data through November. For its part, Thailand has eased visa rules for Chinese tourists, making applications available on arrival and online, and cutting the price.

Chinese Travel Woes Squeeze Thai Economy as New Virus Spreads

The number of Chinese visitors typically spikes for at least a week in January or February, coinciding with the Lunar New Year. Any drop in Chinese tourism will be keenly felt across the economy.

Chinese Travel Woes Squeeze Thai Economy as New Virus Spreads

On Tuesday, the Health Ministry said it was screening passengers from Wuhan at Thailand’s international airports and would closely monitor tourist areas.

“Thai authorities have tightened and closely monitor the situation of coronavirus because the Chinese New Year is approaching,” the ministry said in a statement.

The World Health Organization’s emergency committee will meet Wednesday to discuss “whether the outbreak constitutes a public health emergency of international concern, and what recommendations should be made to manage it,” according to an emailed statement.

Hotel shares reflect the concern. The Thai Tourism & Leisure Index fell 4.5% Tuesday to its lowest level since 2014. Airports of Thailand Pcl, a bellwether for sentiment toward the tourism sector, fell 3% to the lowest since September last year.

--With assistance from Anuchit Nguyen.

To contact the reporter on this story: Lee Miller in Bangkok at lmiller@bloomberg.net

To contact the editors responsible for this story: John Liu at jliu42@bloomberg.net, Michael S. Arnold, Sunil Jagtiani

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