Thailand's inbound tourism during 1H14 was adversely affected by many factors, including: 1) anti-government protests since late last year; 2) natural disasters, e.g., earthquakes and aftershocks in Chiang Rai that undermined tourism in nearby Chiang Mai – being the most favored tourist destination in the northern region – plus heavy tropical storms along the southern Andaman coast; 3) bomb blasts in Hat Yai; and 4) martial law imposed by the Army on May 20 and subsequent seizure of power. With the establishment of the National Council for Peace and Order (NCPO) on May 22, several countries issued safety warnings to their citizens in Thailand. We at KResearch are of the view that those factors were responsible for the decline in the number of foreign tourist arrivals to Thailand during 1H14 by approximately 4.4 percent YoY to only 12.5 million arrivals.
However, it is expected that Thai tourism will improve during 2H14 after the NCPO lifted the curfew nationwide on June 13, helping to restore tourist confidence over the rest of the year. If relevant parties join hands in clarifying what is happening in Thailand along with organizing promotional activities in potential tourist markets, it is expected that the number of short-haul tourists visiting Thailand will begin to pick up during 3Q14. If there are no other factors affecting Thai tourism during 2H14, it is expected that long-haul tourists – especially those from Europe– will likely return to our popular seaside resorts during the high travel season in 4Q14. Such destinations can be conveniently reached by regular and charter flights.
These factors, coupled with other efforts by relevant agencies, should help to quickly restore tourist confidence toward Thailand. Among them include: 1) clarifications by Thai ambassadors to respective foreign ministries/international organizations toward the situation in Thailand; 2) reports on the situation in Thailand to travel agents in our key trade partners; and 3) production of various media explaining the situation and safety measures to foreign travelers and businessmen, plus intensive marketing activities in target markets, especially those with high purchasing power in Asia and elsewhere.
KResearch expects that the number of foreign tourist arrivals to Thailand during 2014 will reach approximately 26.6 million, up only 0.2 percent YoY (versus our previous forecast of 4.7 percent), helping generate THB1.2 trillion in revenues, up 2.4 percent YoY in cash flows to various businesses.
Notwithstanding this, the recovery foreseen in our inbound tourism during 2H14 could be undermined by internal and external factors, especially political issues here that will have to be closely monitored. External factors include economic performance in foreign tourist markets, e.g., Russia, and instability in many countries that may have psychological effects toward decisions to travel abroad by their citizens.
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