Domestic travel is imperative in driving Thailand's tourism in 2021. Unfortunately, it has slowed down again since the beginning of 2021 due to the resurgence of COVID-19. As a result, the Center for COVID-19 Situation Administration (CCSA) has reimposed stringent COVID-19 restrictions, especially in the provinces classified as high-risk zones. The CCSA has also sought cooperation from the general public to avoid or delay inter-provincial travel until January 31, 2021. Additionally, inter-provincial passenger transport services have been cut and many tourist attractions have temporarily closed. KResearch assesses the 2021 outlook for domestic travel in two scenarios in order to clearly show that its recovery hinges on a number of conditions, in particular the impact of COVID-19, which will affect business planning and require adjustments to brace for various incidents that may occur.
First scenario: If the new wave of COVID-19 pandemic in the country can be brought under control over the next few months, and there is no resurgence of COVID19 during the remainder of 2021 or no new clusters of infections are found, which would have otherwise affected domestic travel. In addition, if COVID-19 vaccinations can begin as scheduled (between February and April 2021, according to the Ministry of Public Health), thus helping boost public confidence nationwide and various incidents are in accordance with our assessments above, we at KResearch view that Thais are expected to make 120 million domestic trips, an increase of 39 percent YoY (albeit below the 172.7 million domestic trips reported in 2019), and domestic travel spending may reach THB660 billion.
Second scenario: If the new wave of COVID-19 can be brought under control during the first three months of 2021 and COVID-19 vaccinations can begin as planned by the relevant authorities, but there is no end in sight for the COVID-19 pandemic abroad, meaning that there is still risk of finding infections in Thailand during 2021. Therefore, if another wave of COVID or new clusters of infections are subsequently found in Thailand, the recovery in domestic travel might be disrupted at certain times during the remainder of 2021. Nevertheless, since we are of the view that the severity of COVID-19 will likely be moderate, and the government may not reimpose restrictions like those seen during 1H20, it is expected that domestic travel will grow slightly over that reported in 2020. Given this, KResearch views that Thais will likely make 90 million domestic trips in 2021, a 4.3 percent increase YoY, and their spending may reach around THB500 billion.
In any case, KResearch views that the government will likely be able to combat the new wave of COVID-19 during 1Q21. However, as many countries are experiencing a resurgence of the pandemic, and there are limited COVID-19 vaccine supplies, risk of finding new cases in Thailand is high. For this reason, measures to prevent the new wave of COVID-19 are still necessary during the remainder of 2021 and a concerted effort from all parties is needed to prevent its resurgence, which would help mitigate any impact on Thai tourism and related supply chains.