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25 Aug 2017

Tourism

Inbound Tourism showing Bright Prospects in 2H17 Earnings from Foreign Tourists Likely to Reach THB1.81 trillion (Current Issue No. 2862 Full Ed.)

 The Ministry of Tourism and Sports has reported that during the first seven months of 2017 (7M17), 20.41 million tourists came to Thailand, up 4.5 percent YoY, contributing THB1.03 trillion in earnings to tourism and related businesses, up 6.1 percent YoY.

Over the remainder of 2017, KResearch expects that inbound tourism will continue to expand, thanks to our tourism-friendly environment and the proactive marketing plans of Thai government agencies. Chinese tourists are expected to continue to boost Thai tourism receipts, raising growth relative to a low 2016 base of comparison, given the Thai government's crackdown then on cheap “zero dollar” tour packages being offered to Chinese last year. In addition, tensions between China and South Korea have prompted many Chinese tourists to avoid holidays in South Korea, thus choosing other destinations instead, including Thailand.

Due to the aforementioned factors, we at KResearch have revised our forecast on the number of foreign tourist arrivals to Thailand in 2017 to 35.20 million, surging 8.2 percent YoY (up from our original projection of around 34.15 million), who are likely to contribute around THB1.81 trillion to the economy, up 11.0 percent YoY (which would beat our original projection of THB1.79 trillion).

Regarding concern toward the impact of an appreciating Thai Baht, KResearch views that the upward trend of the Thai currency should not affect our tourism sector in 2017 because the currencies used by the majority of inbound tourists are also moving in the same direction as the Thai Baht. We think that tourists generally consider other factors in deciding a holiday destination, too. Also, Thailand has a variety of tourism experiences to offer, catering to the diverse preferences of many travelers; Thai tourism business is also highly competitive, e.g., some operators are using pricing strategies to attract more inbound tourists.

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