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27 Oct 2010


Flooding: THB2-4 Billion Loss on Domestic Tourism Expected (Business Brief No. 2228)

The severe floods in many regions of Thailand are likely to deal a blow to domestic tourism in 4Q10. Earlier, KResearch forecast that the domestic tourist market might see brighter prospects then with Thai tourists making domestic trips totaling 87 million trips, a YoY increase of 1.2 percent, thus generating related revenue of around THB395 billion, rising 1.3 percent over-year.
Nonetheless, the flooding that has caused extensive damage across the country since early October will likely hit hard on the domestic tourism market in the final quarter. This would be particularly true during October and November – the peak period for domestic tourism – when major religious celebrations are normally observed in many provinces in the flood-ravaged Northeastern region and the central plain.
KResearch believes that this flood crisis may recede around mid-November. In considering the impact of this natural disaster on domestic tourism over the rest of the year, we see two scenarios:
1) If tourism venues are restored and return to normalcy within November, KResearch forecasts that the flooding may bite into domestic tourism revenue by around only THB2 billion less than our earlier forecast for 4Q10.
2) If rehabilitation process in the flood-hit areas is delayed and tourism destinations only get back to normal by December, KResearch views that that such damage would cost us around THB4 billion (from our earlier forecast for 4Q10).

After the water recedes and repairs have been made, we should launch promotional campaigns to showcase our tourist destinations, including convenient travel routes and facilities to encourage both Thai and foreign tourists to visit them. All Thais should join hands to help revive our tourism industry by undertaking some domestic travel this year, which would certainly help income distribution. This would also be conducive to national economy and help protect our country's coffers, rather than traveling abroad to take advantage of the strengthening Baht.