Thailand’s ‘Bold Move’ to Revive Tourism to Take Years, Analysts Say
Thailand’s ‘Bold Move’ to Revive Tourism to Take Years, Analysts Say
(Bloomberg) -- Thailand’s plan to end quarantine for vaccinated visitors is “a fight to win foreign tourists,” Tourism and Sports Minister Phiphat Ratchakitprakarn said Tuesday. But analysts and industry executives see it as a long road to recovery fraught with risks of periodic virus resurgence and unpredictable travel trends.
A return to the pre-pandemic levels of tourist arrivals and spending will likely take a few years, according to Marisa Sukosol Nunbhakdi, the president of the Thai Hotels Association. It’s unlikely that large groups of visitors will immediately head to Thailand given the volatile nature of global travel and the coronavirus situation, she said.
“The light at the end of the tunnel is here, but at the same time it will be a slow climb back to the levels seen before the pandemic,” Marisa said. “Travel is still so volatile so we have to manage our risks. Keeping costs low will still remain a key strategy for all the hotels in Thailand.”
Thailand will end quarantine for vaccinated visitors from low-risk nations from Nov. 1, joining a growing list of nations reopening to cross-border travelers ahead of the year-end holiday season, Prime Minister Prayuth Chan-Ocha said Monday. The surprise announcement saw the nation’s currency surge the most in more than two weeks, and stocks of airport operators, hotels and airlines rally to lift the benchmark index to a one-month high.
Ekasit Kunadirekwong (analyst, Krungsri Securities)
- With the “bold move,” tourism recovery is expected to accelerate in the fourth quarter along with rising vaccination rate and roll-out of booster shots
- Thailand’s low vaccination rate of 32% could lead to a spike in new cases upon reopening for inbound travelers and easing of restrictions for business activities
- Krungsri expects Thailand’s population to reach 70% vaccination rate by year-end with tourist arrivals forecast maintained at 300,000 this year, 14 million in 2022, 34 million in 2023 and a rebound to pre-pandemic levels of 40 million by 2024
Phiphat Ratchakitprakarn (Minister for Tourism and Sports)
- Thailand’s reopening plan coincides with many other nations’ efforts to allow easier cross-border travel and is a fight to win foreign tourists in the next few months
- Ministry wants to attract travelers from China the most, and may seek travel bubbles with Asean nations if they are low-risk countries and travelers have been fully vaccinated
Sunthorn Thongthip (analyst, Kasikorn Securities)
- This will help remove the barriers preventing tourists from coming to Thailand and to stimulate economic activity during the New Year festive period
- Sees upside to Bank of Thailand’s 2022 GDP forecast of 3.9% which is based on tourist arrivals estimate of 6 million next year
- Every 3 million tourist arrivals in Thailand to create 1% upside to GDP growth
- Expects baht to rise to 32.75 vs U.S. dollar by end-2021
- Kasikorn Securities is positive toward the Thai equities market as the reopening should benefit domestic, tourism related sectors. Brokerage sees upside to its 12-month forward SET Index target of 1,680
Kampon Adireksombat (deputy managing director, SCB Securities’ Chief Investment Office)
- The reopening may be positive for Thai stocks in the short term but upside is limited as market has partially digested the news
- The economic recovery still faces many downside risks and we need to monitor how many tourists actually come in, especially from China, the biggest source of visitors pre-Covid
Supant Mongkolsuthree (chairman, the Federation of Thai Industries)
- The reopening is necessary to boost the Thai economy as tourism accounts for more than 10% of GDP
- Thailand needs to reopen to gain more income and benefit from global economic recovery. If not, the nation will only suffer from higher costs due to rising oil prices
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