Thai Tourism Recovery Needs At Least Three Years, Stanchart Says
Thai Tourism Recovery Needs At Least Three Years, Stanchart Says
(Bloomberg) -- Thailand’s tourism industry will take at least three years to bounce back to pre-pandemic levels even as it prepares to ease restrictions on vaccinated travelers starting next month, according to Standard Chartered Bank Plc.
The slow recovery for the sector that accounts for about 15% of Thailand’s gross domestic product means growth in Southeast Asia’s second-largest economy will remain weak over the next two years, Tim Leelahaphan, an economist at Standard Chartered’s Thai unit, wrote in a report Friday.
“The Thai economy will struggle to recover without an improvement in the tourism sector,” Tim said. “This may keep economic growth weak in 2022-23, although a low base should provide support.”
Thailand plans to end a mandatory quarantine for visitors to holiday destinations including Bangkok from Nov. 1 as it seeks to jump-start its economy and transition to a “living with Covid-19” strategy. The reopening plan may be disrupted if the ongoing improvement in the pandemic situation in Thailand changes course, Tim said.
Thailand saw foreign tourist arrivals plunge to 73,932 in the first eight months of this year, from almost 40 million visitors in 2019 who generated more than $60 billion in revenue. Standard Chartered said 6 million tourist arrivals are needed to erase the current account shortfall that stood at $8.5 billion in the eight month through August.
Next year, arrivals of 4 million could help generate revenue equal to 1% of GDP as overseas visitors often spend about $1,500 per person during a trip to the Southeast Asian nation, Tim said.
Travelers from China, who made up 28% of Thailand’s foreign arrivals in 2019, are unlikely to return in large numbers soon due to travel restrictions, while arrivals from India are expected to increase next month during the Diwali festival, though they’re unlikely to match number of Chinese holidaymakers, Tim said. The Bank of Thailand in August cut its forecast for tourist arrivals to 150,000 visitors this year and 6 million in 2022.
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