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2 Jul 2009


Tourism, 2H09…Year-end Revival Likely (Current Issue No.2167)

In 2009, Thailand's tourism, especially the foreign tourist market, has been plagued with numerous negative factors, both domestic and external. They included –
- An unprecedentedly poor image toward safety and security for foreign tourists, especially those from short-haul Asian markets due to domestic political unrest and airport seizures by anti-government protesters late in 2008 and Songkran riots early this year.
- The global economic crisis that has discouraged international travel, especially tourists from Europe and America.
- The outbreak of H1N1 flu that first erupted in Mexico and then spread swiftly to the rest of the world including Thailand, being a major hindrance to airline travel, especially to the affected countries.
As a result, tourist arrivals to Thailand have dropped drastically since late 2008. The number of foreign tourists in 1H09 is thus expected to total some 6.53 million – down 17 percent YoY from the 7.88 million during 1H08, when there was a 13 percent growth YoY.
Of this number, 50.5 percent came from short-haul markets in East Asia that saw a contraction of more than 20 percent YoY, compared to the 16-percent growth last year. This was followed by European tourists, accounting for 28.5 percent, which posted a decline of 10 percent YoY, versus the 10-percent growth recorded in 2008.
Notably, tourist arrivals from almost all regions experienced decreases, except those from South Asia and the Middle East - accounting for some 5.5 percent and 3.5 percent of the total visitors, respectively - that showed increases of 2 and 10 percent.
Previously, the foreign tourist market had been widely projected to see an improvement in 2H09 with growth resuming in the final quarter of this year. However, tourist arrivals are now expected to deteriorate until 3Q09 before experiencing revival later this year. Among the negative factors would be –
- The Songkran riots that severely affected confidence toward personal safety and security among foreign tourists.
- The H1N1 flu that has hampered international travel since 2Q09.
- Unfavorable economic conditions in major tourist markets, especially Europe and America, despite positive signs toward recovery.
Thailand's tourist arrivals in 2H09 are therefore expected to slow at a decelerating rate, and may start to see a turnaround later this year. The number of foreign tourists in 2H09 is projected to total around 6.0 million, a YoY decline of 10 percent, compared to 6.6 million recorded in 2008, when there was an 11 percent contraction YoY.

KASIKORN RESEARCH CENTER (KResearch) therefore forecasts that tourist arrivals in 2009 may total 12.53 million, a decrease of 14 percent YoY, compared to 14.54 million seen in 2008 which recorded growth of 0.5 percent. This would generate some THB400 billion in tourism-related income, dropping 23 percent – or over THB100 billion – from the estimated THB520 billion earned in 2008.

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