In 1H19, inbound tourism slowed due to various factors; whereas, the overall number of tourists and slowing growth rate were as expected (party due to high base effect in 2018), in spite of some differences in details in each market. For example, the number of Chinese tourists is lower than expected partly because of the cooling Chinese economy as a result of the US trade war with China, and the Thai Baht has gained strength versus Chinese Yuan currency. At the same time, Chinese tourists have more tourism destination choices to choose from now while other countries are trying to appeal to international tourists, especially the Chinese, by highlighting their attractions as well. An extension of the fee exemption for visa on arrivals has also promoted the growth of international tourists from other countries as there has been a surprising surge in the number of Indian tourists coming to Thailand
KResearch expects that inbound tourism in 2H19 will slightly improve from 1H19 due to seasonal factors. Nonetheless, the issues related to the economic situation, currency, changing tourist behavior, the competition to attract international tourists as well as severe weather may pose a challenge to inbound tourism in Thailand.
KResearch views that in 2H19, the number of international visitors coming to Thailand may reach 20.1 million or up 7.0 percent YoY versus 19.7 million tourists in 1H19 or up 1.6 percent YoY. KResearch therefore keeps our projection that, for the whole of 2019, around 39.0-39.8 million international visitors will be visiting Thailand or up 2.0-4.0 percent YoY. The tourist receipts are estimated at 1.94-1.97 trillion Baht. The estimate has taken into consideration the government's revisions of the number of inbound tourists in 2018 (downward revision). Additionally, in 2019, tourists' behaviour has been changing. Their spending in some categories is decreasing partly because of the growth of e-commerce worldwide. Moreover, the duration of their stay may be shorter because the new generation of tourists prefer to have more trips in more countries than in the past. Moreover, pricing competition among domestic hospitality operators and the battle among tourist destination countries are also challenging factors to the growth of the industry. The government may thus encounter a daunting task in attracting quality inbound tourists with higher spending per head as stated in the government's policy amid such changing trends.