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13 Feb 2015


Domestic Travel, 2015: Spending Expected to Reach THB772 Billion (Current Issue No. 2591 Full Ed.)

Domestic tourism is a key contributor to the Thai economy because it generates handsome income via various tourist attractions. Looking back, it also supportedThai tourism business in times of crisis that caused steep declines in international tourist arrivals.
On the outlook for domestic travel during 2015, we at KResearch foresee that several factors will induce more Thais to travel internally, whether such trips are with families, friends or companies for seminars/training. These factors include airline promotions in conjunction with business partners, e.g., hotels and financial institutions, as well as online social media that have played an important role in promoting tourist attractions via pictures and stories shared by users.
Aside from that, domestic tourism should be boosted by the government's “2015 Discover Thainess” campaign targeting both international and local tourists, as well as promoting 12 new provincial destinations that should not be missed, e.g., Lampang, Nan, Phetchabun, Buriram, Loei, Samut Songkhram, Ratchaburi, Trat, Chanthaburi, Chumphon, Trang and Nakhon Si Thammarat. We expect that this campaign will generate additional revenues for travel-related businesses in those provinces by perhaps THB3.5 billion on more arrivals and greater spending.
In addition, domestic travel will continue to be supported by the government's tax relief on travel expenses, whereby individuals are allowed to deduct up to THB15,000 for the costs of domestic package tours or accommodation from personal income tax assessments. Companies or juristic partnerships will be able to claim up to twice the cost of seminars, accommodation, transport and related expenses.
Given this, we expect that Thais will take about 148.5 million travel excursions during 2015, rising 7.0 percent YoY, versus the 5.0 percent YoY growth reported for 2014. That would help generate THB772 billion in travel-related revenues, increasing 9.4 percent YoY, bettering the THB705 billion reported for 2014, rising 7.0 percent YoY. Such increase would be largely attributable to more excursions to the northern, northeastern and southern regions, which account for almost half of the total domestic tourist market this year.

The popularity of each region will differ wherein the cooler climate in the northern region should attract more travelers towards the end of the rainy season during 3Q15 through to 1Q16. However, the current high cost of living may affect certain traveler segments, forcing them to make short day-trips or seek out promotions on domestic air tickets and accommodation.

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