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18 Jun 2020


Domestic stimulus packages after easing of the lockdown encouraging Thais to travel domestically to generate income of around THB 41 billion (Current Issue No.3118)


              The COVID-19 situation in Thailand has improved to the extent that the government has eased lockdown measures on interprovincial travel, public transport systems, airports and tourist destinations, allowing services in these sectors to return to normal. On June 16, 2020, the Thai cabinet approved three packages to promote domestic tourism, with an implementation period from July until October 2020. KResearch views that the government's domestic tourism stimulus packages will have a positive effect on businesses in the tourism sector that have been severely affected by the COVID-19 outbreak, as these packages have been designed to assist businesses in the tourism supply chain, both directly and indirectly – including hotels, travel agencies, logistics companies and local businesses like souvenir shops and restaurants, to name but a few. These packages are also expected to have the psychological effect of spurring the general public into action, thereby generating more tourism and higher spending at tourist destinations. Consequently, the aforementioned positive factors would further benefit domestic tourism trends for the remainder of 2020 – even more so than KResearch's earlier assessment which also saw a better outlook for domestic tourism in 2H20 than during 1H20, provided that the COVID-19 situation has been resolved by then.

            One of the reasons supporting the aforementioned optimistic view can be found in a survey conducted by KResearch, in which around 47.7 percent of respondents said that the tourism stimulus packages that require citizens to register through an electronic system have influenced their decision to travel. At the same time, 60.1 percent of the sample group has plans to travel domestically in the next 1-3 months (after relaxation of lockdown measures). KResearch assesses that these government-initiated  packages would likely encourage more Thais to act upon their travel plans, which will generate an additional THB 41 billion in incremental revenue for the domestic tourism market, compared to a scenario in which no such packages were introduced.

           ​    Nonetheless, given the weakened purchasing power prevalent in current economic conditions and the 'New Normal' challenges that businesses are facing, the tourism market is not expected to make a positive turnaround in 2H20. Taking into account the heavy impact of 1H20 on the market, and under the assumption that a second outbreak does not happen in Thailand, KResearch projects the number of domestic tourists throughout 2020 to be around 89.5-91.5 million person-trips, or a 45.2 to 46.4 percent decline from 2019. Meanwhile, the income from Thais who travel domestically is expected to amount to THB 545-567 billion, or a contraction of 47.5 to 49.5 percent from the preceding year – though these projections are better than previous estimates.